Women And Microcredit In Rural Bangladesh: An Anthropological Study Of Grameen Bank Lending

The Grameen Bank of Bangladesh has been extending small loans to poor borrowers (primarily women) to promote self-employment and income generation since 1976. The apparent success of the Grameen Bank (that is, recruitment of clients, investment of loans, recovery rates on invested loans and profit margins) has made microcredit a new model for poverty alleviation and sustainable development. Anthropological research results on Grameen Bank lending to women presented in this book, however, illuminates the link between the success of the bank and debt-cycling of borrowers. The priority of earning profits to insure institutional economic viability caused Bank employees at the grassroots level to emphasize increasing the number of loans disbursed and loan recovery. By using the joint liability model of lending, the Bank workers and borrowing peers impose intense pressure on clients for timely repayment. Many borrowers maintain their regular payment schedules, but do so through a process of loan recycling (that is, pay off previous loans with new ones) that considerably increases borrower debt liability. The debt burdens on individual households in turn increase tension and anxiety among household members and produce unintended consequences for many clients.This book examines women borrowers’ involvement with the microcredit program of the Grameen Bank, and the grassroots lending structure of the bank; it illustrates the implications of Grameen lending for the borrowers, their household members and bank workers. The focus of the study is on the processes of village-level microcredit operation; it addresses the realities of the day-to-day lives of women borrowers and bank workers and explains informant strategies for involving themselves in this microcredit scheme. The study is on the power dynamics of everyday lives of informants as they affect women borrowers’ relationships within the household and the loan centers, and bank worker relationships within the loan center and the bank.

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Part2-Lending and Borrowing While Bypassing the Bank

Driven by the power of the Internet, this type of people to people lending allows borrowers to make their case for a loan to put their cards - or in this case, your credit score - on the table. The creditors, who may invest up to $ 50 or $ 25,000, can offer loans in the same way that a buyer can bid on an auction online. Once the auction closes, Prosper.com awards the bids with the low interest rates, consolidates the financing and administering the loan. Borrowers to repay their loans as they would with traditional lending institutions and, by default, the community knows. Lenders can diversify their investments and reduce its credit risk for small quantities of many borrowers.

In such people loans to people, form groups (or communities, as they are often called) to establish a good reputation of the group that will lead to higher interest rates and lower reliability. Registration of a solid payment history, for example, allow a community member for a loan at a lower interest rate of a person who belongs to a group.

In the case of Prosper.com, the most popular group (with about 6000 members) is two millionaires. Started by - you guessed it - two millionaires, the group has contributed more than $ 1.5 million for a wide variety of borrowers.

The concept of social online banking is a natural consequence of the need both for borrowers in the current economic climate and the popularity of social investment. Well by doing good is a strong incentive for lenders who enjoy helping those in need, while getting a return on investment. In the process, lenders and borrowers are bypassing the banking system on the road to prosperity.

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Part1-Lending and Borrowing While Bypassing the Bank

A lack of a better word, "alternative" forms of lending and borrowing power lately largely won in 2006, Nobel laureate Muhammad Yunus, founder of the Grameen Bank in Bangladesh. Yunus discovered that micro loans - sometimes amounting to only a few dollars per loan - could lift entire communities out of poverty. Of course, the situation in the United States is a little different, but alternative forms of credit and loans are gaining weight, and the result is that lenders and borrowers began to prosper.

United States, consumer debt is at an altitude of all time. Many individuals and families have bought homes with unconventional mortgages during the housing boom expensive and have maximized their credit cards on the road. Now that the housing market is cooling, unemployment in some areas, and even Alan Greenspan, predicted the arrival of a recession, consumers are feeling the effects. It is more difficult for people to meet their monthly obligations, which may lower your credit score and start a downward spiral. As a result, many people can not get loans from traditional banks.

While giant banks seem to have a stranglehold on the flow of loans in this country, there is a resurgence of people for loans to people who, before the long tradition of bank loans. A good example of this type of lending and borrowing is Prosper.com, an online service that brings together lenders, who are interested in investing their money and borrowers can apply for funding to consolidate loans, start a business , make a movie, record a CD, or any other company you can imagine.