Reflection in a Distant Mirror: Why the West Has Misperceived the Grameen Bank's Vision of Microcredit

This paper examines the U.S. fascination for the Bangladeshi Grameen Bank model. It argues that the Grameen model does not have answers to the problem of poverty and that the United States and other countries should not attempt to replicate it. Politicians, the popular press, and development communities assume that the Grameen model will solve structural problems associated with the marginalization of the poor through its solidarity circle, 16 decisions, agenda for social development and focus on women. The paper argues that:

• Conclusions about the Grameen models ability to solve market failure, increase participation by the poor in functioning markets, and incorporate indigenous values are unsupportable;
• Solidarity circle fails to solve problems that contribute to market failure in poor communities;
• Grameen models'  key features encourage the poor to engage in informal behaviors;
• Indigenousness that the Western development community perceives in the Grameen model is in fact a hybridity that fails to incorporate the true values of the target population. 

The paper concludes that the development community must reach a more clear understanding of the market, and incorporate indigenousness into any potential solution.