Credit for Alleviation of Rural Poverty: The Grameen Bank in Bangladesh

There is a growing recognition that institutional credit plays an important role in the modernization of agriculture through technological change. It is clear that as those processes of modernization occur, incomes rise and expenditures on locally produced goods and services expand in such a manner as to increase the demand for labor and labor-intensive entrepreneurial activities. The question then arises as to what extent institutional credit can be offered to very poor people to facilitate their taking direct advantage of the developing entrepreneurial activities. Perhaps the most widely admired effort to answer this question is that of the Grameen Bank in Bangladesh. One of the commendable features of the Grameen Bank is its desire to have its experience intensely analyzed for the benefit of others who are considering such effort, as well as for its own improvement. Mahabub Hossain conducted this in-depth analysis as a staff member if the Bangladesh Institute of Development Studies, which undertook a comprehensive research project on evaluation of the Grameen Bank. The International Food Policy Research Institute is pleased to have provided support to him in the writing phase of this study of the Grameen Bank.