The Grameen Bank and Beyond the Millennium Development Goals : Microfinance and Poverty Alleviation

Abstract: Inspired by the precedence of eradicating worldwide poverty and the unresolved discussion how to solve this problem, this paper attempts to illustrate how microfinance by the Grameen Bank can alleviate poverty beyond the Millennium Development Goals (MDG). These goals are arguably limited by the use of poverty lines and may not reflect the true level of poverty beyond quantifications. Microfinance has become a top choice for bottom-up poverty alleviation despite mixed effects over past decades. In this regard, this study seeks to explore how microfinance as a bottom-up approach to development can widen and enhance social opportunities beyond quantifications and the MDG for poor people. Guided by an explorative case study design qualitative interviews with Grameen Bank staff and borrowers were conducted in rural villages in the divisions of Tangail and Manikganj in the surrounding areas of Dhaka. Three primary stakeholders were identified for further empirical enquiry: (1) poor people and households, (2) children and students, and (3) extremely poor people or beggars. The research revealed that microfinance can alleviate poverty and enhance economic as well as social opportunities for poor people to a certain extent. In terms of economic opportunity enhancement microfinance can lead to stimulation of business sectors and village economy, increased purchasing power and general access to financial services otherwise inaccessible for poor people. With regards to social opportunities, microfinance may lead to increased choice to pursue what one desires, women empowerment, instrumental value, change in living conditions, decreased availability of household workers, increased opportunities for beggars and access to healthcare. However, the level of effectiveness of poverty intervention and opportunity enhancement varies among the groups of people explored: (1) poor people and households and (2) children and students can enhance their opportunities relatively more effectively compared to (3) extremely poor people or beggars.