Five Cents a Day: Innovative Programs for Reaching the Destitute With Microcredit

This paper was commissioned by the Microcredit Summit Campaign in 2006.The paper evaluates the impact of Grameen Bank's (GB) poverty alleviation interventions. These include:Organizational development at the grassroots level;Safety features in the credit delivery system such as exclusive focus on the poorest, landless people of Bangladesh and on poor women; Microcredit.The paper states that GB's poverty alleviation interventions have had positive impacts on: Rural credit market; Capital accumulation by the poor; Income and employment generation; Poverty alleviation; Family size; Empowerment of the rural poor, particularly women from landless households.The paper discusses the following innovations of GB:The Grameen Generalized System (GSS), whose features are flexibility, borrower-friendliness, tailor-made loans and loans for housing and higher education; The Struggling Members (Beggars) Program that has the following features: No requirement to form groups, have monthly meetings, etc; Collateral-free, interest-free loans; Flexible repayment schedule; Coverage under life insurance without premium; Encouragement to take up income-generating activities.The paper describes the impact of a GB loan on the life of Syman, once a beggar, now an entrepreneur. It concludes by detailing GB's long term vision to help its members move out of poverty and stay out of poverty by providing them with:Microenterprise loans for bigger investment; Information technology; Loans for higher education and the building of assets.