Microfinance and Self-Help Groups in India
The Grameen Idea
Muhammad Yunus's Grameen Bank in Bangladesh showed that poor women could repay small loans, inspiring microfinance worldwide.
Modern microfinance is often traced to Bangladesh.
Beginnings
In the 1970s, economist Muhammad Yunus began lending small sums to poor villagers, which grew into Grameen Bank.
Group lending
Borrowers formed small groups that supported one another and felt social pressure to repay.
Focus on women
Most borrowers were women, who tended to repay reliably and use loans for household benefit.
Recognition
Yunus and Grameen Bank won the Nobel Peace Prize in 2006.
A peer group
Five neighbours borrow together; if one struggles, the group encourages and helps her.
Assuming the model works the same everywhere
Context matters.
Key takeaways
- Grameen began in Bangladesh.
- Group lending uses social ties.
- Women were the main borrowers.
- Yunus won the Nobel in 2006.
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