Re: query about grameen

[Padmanabha Rao <kvprao@igidr.ac.in>]

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On Thu, 28 Dec 2000, Cprakash wrote:
 ..cooperative banking help in alleviating poverty. but i do not
 understand how banks, deemed banks, i.e can maintain to give lower
 interest rate than the market.

They don't. In India for example the RRBs offer IRDP loans at about 3-5%.
The Grameen bank's interest rate is almost the market rate, if not higher.
The exact figures should be available from them.

 Grameen... is it sustained by private or government charity ?

Yes. Despite the interest rates. Their administrative costs are high. But
the jury is still out on micro-credit sustainability, as the data from the
grameen-type banks are not available completely. Besides even with the
case such as India's RRBs it is difficult to compare them with
Grameen-types since the institutional structures are different. In
anycase, I think it is commendable *something* is being DONE by the
Grameen-types.

Thanks.

Padmanabha Rao


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