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

This paper analyzes the replicability of the Grameen Bank with case studies from Indonesia, the Philippines and Nepal. It presents some features of the Grameen approach:

• High moral commitment of leaders based on values enforced through training;
• Peer selection and peer enforcement, which preclude adverse selection and moral hazard;
• Rigidly enforced credit discipline.

It also describes some features of successful Grameen replicators which have modified the classical replication:

• Local bank status (rather than NGO or national bank status); Grameen replicators: do they reach the poor and are they sustainable?
• Deposit mobilisation through differentiated products with attractive interest rates;
• Differentiated loan and insurance products which cover all costs and risks;
• Client differentiation through larger-size loan and deposit products for non-poor members.

The paper concludes that the replicators are not sustainable and are not reaching the poor in sufficient numbers.