Since 1976, when the Grameen Bank Project was founded by Muhammad Yunus in Bangladesh, microfinance groups (MFIs) have provided credit and bank services to poor women in developing countries around the world. In the classic microfinance program, groups of rural woman are given small (micro) loans, which they repay in installments at weekly group meetings with a loan officer. Is the Yunus/Grameen model of weekly repayment meetings the best — or are there other ways to design an MFI? This is the question raised by Professor Rohini Pande of the Harvard Kennedy School, and explored in a series of innovative studies.
The surprising results are presented in a new paper, “Building Social Capital through Microfinance,” authored by Pande with Benjamin Feigenberg of MIT and Harvard University’s Erica Field.
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