A Cost-Effectiveness Analysis of the Grameen Bank of Bangladesh

26 Pages Posted: 5 Jun 2003

See all articles by Mark Schreiner

Mark Schreiner

Washington University in St. Louis - Center for Social Development

Abstract

Reports of the success of the Grameen Bank of Bangladesh have led to rapid growth in funding for microfinance. But has the Grameen Bank been cost-effective? This article compares output with subsidy for the bank in a present-value framework. For the timeframe 1983-97, subsidy per person-year of membership in Grameen was about $20, and subsidy per dollar-year borrowed was about $0.22. Although the article does not measure consumer surplus for Grameen users, the evidence in the literature suggests that surplus probably exceeds subsidy. The Grameen Bank - if not necessarily other microlenders - was probably a worthwhile social investment.

Suggested Citation

Schreiner, Mark Joseph, A Cost-Effectiveness Analysis of the Grameen Bank of Bangladesh. Available at SSRN: https://ssrn.com/abstract=410969

Mark Joseph Schreiner (Contact Author)

Washington University in St. Louis - Center for Social Development ( email )

St. Louis, MO 63130
United States
314-935-9778 (Phone)
314-935-8661 (Fax)

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