Lessons from the Grameen II Revolution

This briefing note states that:

• Grameen II represents a revolution in the way that Grameen Bank does business;
• Client requirements have evolved with the recognition that credit alone does not meet the needs of the poor;
• With its new range of products, Grameen II reflects and meets many of the diverse needs of Grameen's target market.

The note tracks the achievements of Grameen Bank, examining the growth in:

• The number of customers and in profitability;
• The quantity and quality of loan portfolio;
• The variety and use of products.

The note draws the following lessons for Grameen II replicators:

• They will have to:
  • Develop systems, front-line staff and management capability;
  • Obtain licences from regulatory authorities if they want to offer savings services;
  • Develop new skill sets to complete the necessary market research and product development.
• The news that group guarantee or joint-liability is not to be enforced will challenge the basic operational principles of many replicators.

The note concludes with the following look at Grameen IIs future:

• The spread of product knowledge among Grameen members is putting much greater control into the hands of customers;
• The centre manager may evolve into an officer, who supplies information and financial advice to clients, who themselves determine the products and services they require.