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The New Loan Arrangements

Author: Stuart Rutherford
Published: March 06, 2005

Abstract:

Changes to loan arrangements attracted attention when Grameen II was announced in 2002. The ‘flexi’ loan – a system for quickly rescheduling loans in repayment arrears – aroused concern: Grameen’s loan portfolio was known to have been weakened by floods and other problems in the 1990s, so some worried that wholesale rescheduling of loans would make things worse rather than better. However, this did not happen. This note describes the new loan arrangements and how staff and borrowers have reacted to them. (The analysis of the bank’s financial performance is in another Note in this series, No. 4.)

Tags: Credit , Grameen bank , Loan contract , Weekly repayment , Grameen generalised system , Flexi loan , Mohammad yunus , MFIs , Microfinance institution , Group lending , Bangladesh , South Asia , Microfinance , Institutional change , Stuart Rutherford , Grameen II

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