A Critique of GB II's Means Test for Membership

This briefing note criticizes the Grameen Bank's revised guidelines for determining the eligibility of applicants, stating that the new guidelines:

• Further strengthen the focus on land and asset ownership;
• Specify households that should not be considered for membership using six kinds of criteria: household income, place of occupation, education level, housing type and value, household assets, membership of other MFIs.

The note offers three criticisms of the guidelines:

• The specified levels are set too low, resulting in too restricted a pool of eligible applicants;
• They are unworkable in practice, leading field workers to find ways around them;
• They represent a missed opportunity to construct a useful database on membership.

The note concludes that:

• Grameen's membership means test is:
  • Too restrictive;
  • Fails to take into account regional differences and the dynamic character of poverty;
  • Is generally not well enforced by staff.
• However, collecting the same data as a description of new members, rather than as a prescription for them, would be more feasible, and would yield information of real use to Grameen's business plans and to researchers working for Grameen and for microfinance in general.