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Grameen Replicators: Do They Reach the Poor and are They Sustainable?


TThe Grameen Bank of Bangladesh is widely considered as one of the world‘s most successful financial institutions banking with the poor. In an effort to alleviate poverty, donors have supported replication programs in 26 countries. This analysis is based on some case studies from Indonesia, the Philippines and Nepal; no comprehensive evaluation has been available. The biggest obstacle in the development of Grameen-type microfinance institutions (MFIs) was found to be donor support: a powerful incentive to substitute external resources for domestic and local savings. This has undermined the institutions’ viability and sustainability. As long as they are not self-reliant, they do not reach the poor in sufficient numbers. The Grameen approach is no magic formula, and no best practice or optimal solution that may be applied around the world. However, it incorporates a number of sound practices which may explain some of its success.

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