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Grameen II and Portfolios of the Poor

Author: MicroSave, Financial Access Initiative
Published: June 05, 2010


"The Grameen Bank of Bangladesh struggled during late 1990s due to the deterioration of its loan portfolio which got worsened by the devastating flood leading to loan repayments erosion. This Briefing Note explains how the bank responded to the adverse scenario by adopting a new model ""Grameen II"" in 2001. The findings in this Briefing Note are from sets of financial diaries collected from Grameen clients both before and after Grameen II, between1999-2005. The Briefing Note explores the way Grameen II was made flexible by: * aligning repayment schedules with household income, * meeting the demand for secure and reliable savings products, and * acknowledging the varied needs of clients. The Grameen II offered new products such as savings account which allowed clients to deposit and withdraw savings at any time and in any value. Further improving its services, the Grameen II also offered Top-Up loans and Grameen Pension Savings which allowed borrowers to repay during low income seasons and meet their medium to long term financial requirements. This Briefing Note aims at explaining the transition of Grameen Bank from a microenterprise lender into a true retail bank for poor households."

Tags: MicroSave , Grameen bank , South Asia , Grameen II , Business model , Financial diaries , Portfolios of the poor , Stuart Rutherford , Bangladesh , Microfinance , Product development

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