Grameen took 27 years to reach 2.5 million members – and then doubled that in the full establishment of Grameen II. Even in Bangladesh’s fiercely competitive environment Grameen continues to grow at a remarkable rate attracting around 140,000 new members each month – a staggering 1.7 million new members every year. In the three years to December 2005, Grameen’s deposit base tripled and its loans outstanding doubled. In the same period the bank has introduced a more conservative provisioning policy and built up a formidable loan provision for its troubled housing loan portfolio. At the same time the quality of the loan portfolio has significantly improved, as did profitability. Drop-outs are returning, and even some old defaulters are repaying and re-joining. Market-led Grameen II is yielding very encouraging results. Grameen customers are using the Grameen II products in a wide variety of ways, to meet the diversity of needs and challenges that face them. This note describes the effects of the new Grameen II efforts on the overall Grameen Bank system and on how clients are responding and provides reflections on what these efforts may mean for Grameen and the microfinance industry in the near future.

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