Scaling Up Microfinance and Its Impacts : A Case Study of Grameen Bank

Abstract

Using more than 30 year data from Grameen Bank, this paper seeks to understand how the bank was able to scale up and if it can still maintain self-sustainability while fulfilling a social mission. By comparing Grameen Bank under the Grameen I and Grameen II systems, this paper shows that Grameen II is more effective than Grameen I in meeting poor people's needs; the development of saving products and insurances for borrowers contribute to the bank's scaling up and increased self-sufficiency. However as the microcredit market becomes saturated, in order to maximize the untapped market of financial services for the poor, more dynamic services matching poor people's cash flows and needs are necessary.