Microfinance in Bangladesh

The model of microfinance in Bangladesh, as it originated at Grameen Bank, involved tiny loans to women with fixed terms and amounts, group liability, weekly meetings, forced payments into a group savings account, and a set of 16 social pledges chanted each week while standing at attention. The Grameen model spawned imitators around the world, involving a large share of microfinance clients in India, the Philippines and East Africa, among other places.
But while many in the microfinance industry and outside it equate microfinance with the Grameen model, Grameen itself, as well as the other microfinance institutions in Bangladesh, have quietly re-engineered their models to pursue an expanded vision. The most dramatic shift occurred in 2002, with the introduction of Grameen II, a thorough re-tooling of Grameen Bank's operations. Throughout the past decade, most of the hundreds of microfinance institutions (MFIs) in Bangladesh have followed suit, experimenting with new lending methodologies, products and support services.
Loans to women? Many MFIs now serve men, too, though loans to women still dominate.
Forced group savings? Most MFIs now offer flexible, individual deposit services to their members. MFIs have become largely self-funded from deposits. (The sector has $2.6 billion in total loans, financed by $2.2 billion in total savings, a a microfinance data aggregator.) And unlike the original forced savings, savers can deposit and withdraw their money whenever they wish.
Pre-set loan amounts and terms? Borrowers can often select the length of loan they need, and loans are now available for small businesses (up to about $15,000). At the same time, many MFIs have developed loan and support programs for the "ultra poor."