Evidence on the Social and Economic Impact of Grameen Bank and BRAC on the Poor in Bangladesh

Assessing economic, social and political impact of microcredit programs
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This paper presents research findings on the impact of Grameen Bank and Bangladesh Rural Advancement Committee (BRAC) on the economic and social situation of the poor in Bangladesh.

BRAC began as a support and rehabilitation program that gradually expanded to provide education, skill training and micro-credit. In contrast, Grameen Bank started with the provision of microcredit and later expanded to training and education. Grameen Bank invented a system based on social collateral, which is, in effect, a combination of peer pressure and solidarity. The impact assessment of Grameen bank and BRAC revealed that both models have:

  • Succeeded in reducing members' vulnerability and poverty;
  • Positively influenced their female members;
  • Brought about improvements in women’s status, involvement in family decisions, knowledge and awareness.

The paper states that while the poorest make up the largest group among members of both programs, most of the poorest people in Bangladesh have not been able to take part in a microcredit program. In conclusion, it is not clear what impact Grameen Bank and BRAC have on the wider social, economic and political environment.

About this Publication

By Develtere, P. & Huybrechts, A.