The Poor Always Pay Back: The Grameen II Story » (New Edition)

Dipal Barua is the Deputy Managing Director of Grameen Bank and the Managing Director of the Grameen Shakti in Bangladesh. He has extensive experience in the field of poverty alleviation, microcredit, rural development and people’s participation as a result of being a core founder of Grameen Bank. He serves on the board of directors of 16 sister organizations of Grameen Bank including Grameen Phone, the largest cell phone company in South East Asia, and Project Enterprise, a micro lending program in New York.

Asif Dowla is a professor of economics at St. Mary's College of Maryland. He has published various articles on economics and aspects of microfinance such as leasing, savings mobilization and social capital. In 1997, he received a fellowship to spend a year on sabbatical at Grameen Bank.

Nobel Prize-winning microcredit institution Grameen Bank has financially empowered the poorest families in more than a hundred countries across the globe for over three decades through savings and loans. Recently, Grameen has undergone a complete overhaul of its system, creating "Grameen II" and seeking to make its loan programs more effective.

The Poor Always Pay Back not only uncovers how a major financial institution is able to change its system in response to the needs of its borrowers, but also how Grameen redefined and continues to redefine the basic assumptions of credit worthiness. The immense success of Grameen Bank shows a hopeful trend in the alleviation of poverty.

Grameen Bank II is addressing the frontier issues in microfinance: open access savings, flexible loan products, self reliance and absence of donor dependency for funds, and product development to cater to the needs of the retirees (Grameen Pension Scheme) and their adult children (Higher Education Loans). The story behind these and other innovations show why Grameen has become such an inspiration to those working for social justice everywhere.

List of Figures, Tables, and Boxes vii

Foreword ix

Preface xiii

1 Introduction 1

2 Classical Grameen and Its Impacts 15

3 Loan Products under Grameen II 71

4 Savings Mobilization: From One Taka to 3000 Billion Taka 105

5 Archeology of Grameen II 137

6 Staff Incentives and Implementation of Grameen II 171

7 The Education Loan and a Program for the Poorest 201

8 Conclusion 245

Bibliography 265

Index 279

About the Authors 293