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The Poor Always Pay Back: The Grameen II Story Paperback – November 14, 2006
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Western society characterizes the poor as 'dirty,' 'dishonest,' 'lazy,' and 'incapable of planning.' [This] book provides us with overwhelming, concrete evidence to the contrary. --Journal of International Development
About the Author
Asif Dowla is a professor of economics at St. Mary's College of Maryland. He has published various articles on economics and aspects of microfinance such as leasing, savings mobilization and social capital. In 1997, he received a fellowship to spend a year on sabbatical at Grameen Bank.
Top Customer Reviews
"The Poor Always Pay Back: The Grameen II story" is a comprehensive account of the overhaul of the world's premier micro credit institution and it is suitable for novice students of economics, masters of the field, and everyone in between who may be curious about microcredit. The central tenet of the text is that the poor are bankable--despite the fact that they lack liquid capital, they can be trusted to repay loans and to use money in an enterprising fashion if given a fair opportunity and clear terms.
The book begins with a review of Classical Grameen and its effects on the poor in Bangladesh, focusing on the Bank's structure and clearly explaining the terms of micro loans (such as the "Sixteen Decisions" which are both described and illustrated). However, the majority of this work, as its title suggests, is devoted to explication and analysis of the advanced terms and products of Grameen II. Claims and conclusions are well supported with both quantitative and qualitative evidence, to which the two authors have prime access through their ties to the Bank, granting a great deal of authority to the book. Tables and appendices are nicely tied in with the text, and citations allow readers to conduct their own research on individual aspects of Grameen and microcredit if they so desire.
"The Poor Always Pay Back: The Grameen II story" is a good way to begin study of the growing institution of microcredit and the assumption that there is financial potential among the poorest of the poor.
The Grameen Bank model is currently replicated in more than 100 countries. Those interested in the details of how this works are well served by reading both this book and its predecessor, "Creating a world Without Poverty."
A major reason for the prior failure of credit cooperatives in Bangladesh was that the groups were too large and included people with varied economic backgrounds. Thus, Grameen Bank evolved to a group size of 5, with a maximum amount of land ownership to be eligible for membership. Another limitation was one member per household to prevent a particular family from exerting undue influence. Initially, loans were given to the two neediest members; depending on their performance, two more received loans, and generally the elected chairperson was last.
Income generation and housing, rather than consumption, were allowed purposes. Borrowers were required to save a fixed amount weekly plus 5% from the loan. This created a group fund that paid 8.5% interest. The group fund could be used for multiple purposes (eg. paying school tuition, buying food in lean times). In cases of disaster, the entire amount could be used - normally it was limited to less than half. Borrowers paid only a 5% group tax.
Each borrower must buy one share of the bank (100 taca - $1.47 currently).Read more ›