Micro Leasing: The Grameen Bank Experience
This paper critically examines the leasing programme of Grameen Bank, introduced about a decade ago. It presents information on the administrative systems and procedures for managing the leasing product, showing aspects of the traditional credit and savings system that are modified for this purpose. The paper looks at ways in which equipment leasing can be successfully included in microfinance. Specifically, it examines the terms and conditions of the leasing program and evaluates its success and failures in terms of outreach, repayment rate and asset ownership. It also presents data on the overall results from a gender perspective, and in some detail describes how one or two individual members have been able to benefit through leasing. It explores:
- Selection of studies which address the types of activities funded by the leasing programme;
- Operational aspect of the Grameen Bank's micro leasing;
- Experience of a Grameen borrower with leasing.
The paper concludes that although this form of financing has many obvious advantages, it has been difficult to integrate leasing products into the range of more familiar loan products usually on offer.
