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From microcredit to microfinance: evolution of savings products by MFIs in Bangladesh
Author(s) -
Dowla Asif,
Alamgir Dewan
Publication year - 2003
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1032
Subject(s) - microfinance , loan , point (geometry) , economics , business , poor people , micro credit , finance , economic growth , poverty , geometry , mathematics
This paper chronicles how the microfinance industry in Bangladesh has evolved from its initial focus on credit, disbursing standardized loan products and collecting obligatory savings to the development of flexible savings products. We describe the process through which the industry gradually moved away from compulsory savings and introduce flexible savings. We provide detailed descriptions of various savings related products used by MFIs in Bangladesh. We point out the numerous problems that can arise when MFIs collects savings especially from non‐members without a proper legal framework. We conclude the paper by suggesting prudent regulation of MFIs to ensure the security of the meager savings of the poor. Copyright © 2003 John Wiley & Sons, Ltd.