Managing credit for the rural poor: Lessons from the Grameen Bank

This paper, based on a detailed study of the Grameen Bank in Bangladesh, suggests that the credit policies of the Bank do not constitute a sufficient explanation for the Bank's success, and that its acclaimed policy of replacing individual collateral with group guarantee is in fact not practiced. The paper presents an alternate explanation for the success of the Grameen Bank. In addition, it explains how the Grameen Bank has been able to overcome typical problems of implementing development programs by sustaining good performance from its large work force, and keeping to a minimum the tendency of a few target beneficiaries to corner program benefits and flout organizational norms for their personal benefit.