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Grameen Foundation (GF) - 2007 Review

We have published a more recent review of this organization. See our most recent review of Grameen Foundation.

In a nutshell

The Grameen Foundation provides a variety of technical support services to microfinance institutions around the world. We named this organization a finalist because of the useful white paper it produced on the existing evidence for microfinance (more here), but were unable to get a clear enough picture of its activities - and the evidence for their effectiveness - to have confidence in it.

The Details

What do they do?

Grameen is broadly dedicated to promoting and supporting microfinance; beyond this, we have only a very broad understanding of its highly varied activities. The following is a summary from its website (which we found to be clearer in this regard than the grant application):

  • Microfinance program support: GF provides funding, technical assistance, training and new technology to distinct partner microfinance institutions.
  • Technology programs: detailed here, GF's technology programs include developing software to assist with microfinance, consulting with microfinance institutions on the use of technology, and bringing telecommunications (particularly cellphones) to the developing world.
  • Capital Management and Advisory Center: GF aims to help microfinance institutions grow by providing financial products (starting with Growth Guarantees).
  • Knowledge sharing: GF seeks to increase awareness of microfinance by releasing publications, including a white paper summarizing the research on microfinance (a paper we drew heavily on in our overview of microfinance).
  • Launching "social businesses": GF develops for-profit (or "no-loss") businesses with the aim of aiding the developing world.

Grameen's grant application provided more detail on two of its programs:

  1. Attachment A-1 provides some preliminary information on the structure of MF programs in Africa, including a budget on Pg 6.
  2. Attachment A-2 describes the Village Phone program, which focuses on "establishing a network of cell phone pay phones in rural areas" (Pg 4). The program involves selling cellphones (on credit) to developing-world entrepreneurs, who then rent them out; the aim is to help both entrepreneurs (by giving them a product to market) and the users of the phone (by improving their ability to communicate and coordinate their business). Attachment A-2 Pg 4-6 gives an overview of the program with figures on phone sales and usage to date, as well as demographic information on Cameroon (targeted for the program's next expansion) and a budget.

This program could help both those who rent out the phones (by providing them with a source of income) and those who rent them (as detailed in [ this New York Times article.

Does it work?

We have very little information about Grameen's activities apart from the high-level overview given above. The only empirical evidence we were sent consists of three case studies of microfinance programs: one client-to-non-client comparison and two new-client-to-mature-client comparisons. We find all of these inconclusive; the general issues that affect these sorts of studies are discussed in depth in our overview of microfinance.


We were not able to get a clear sense of how Grameen sets its organization-wide strategy and priorities; we were not able to get a detailed picture of the activities, expenses, and people served by any of its programs aside from Village Phone (Attachment B-2); and we have seen no convincing empirical case for any of Grameen's programs' past or future effects on life outcomes. We cannot confidently recommend an organization - particularly one that focuses on technical assistance and communication, as Grameen does - without substantially more detail and evidence.


A: Application and response

D: Financials

Response from Grameen Foundation to our 2007 review:

Grameen Foundation is committed to helping the poor, and especially the poorest, access the financial services they need to break the vicious poverty cycle and we were pleased that Clear Fund offered us this opportunity to help expand our support of microfinance in sub-Saharan Africa. We will continue to focus on our two core strategy areas: institutional support and strengthening for microfinance institutions (MFIs) and industry-wide initiatives that help to advance the entire sector.

Our development philosophy is grounded in the belief that local organizations are critical in helping to alleviate poverty in their home countries. We target and support MFIs that share our focus of reaching the poorest people; this network, which now encompasses 25 countries, enables us to reach even more people with greater efficiency. To support the growth, effectiveness and efficiency of our partner MFIs, we provide a wide range of customized services, including financing (loans, grants and loan guarantees), operational and technical support (staff training and capacity-building programs) and technology development. These tailored assistance packages have enabled MFIs like LAPO of Nigeria, a GF partner since 2003, to significantly increase access to loans and other financial services among Nigeria's poor, from 30,000 in 2002 to more than 166,000 in 2007. Their success is evidenced by a repayment rate of more than 95 percent, which is common across Grameen Foundation's network and the industry at large.

We also believe collaboration and knowledge sharing are essential in helping the entire industry achieve the shared goal of defeating poverty. Over the past six years, Grameen Foundation has been spearheading initiatives in technology, capital markets financing and social performance that are geared towards strengthening the capacity of the entire sector. Our Growth Guarantees program addresses one of the most critical issues facing MFIs: the lack of funds for expansion and growth. Since 2005, it has generated more than $130 million in local currency financing in 12 countries through $30 million in guarantees. The Progress out of Poverty Index gives MFIs a simple, effective way to track poverty reduction rates among their clients – another critical industry need. We have completed PPI integration in 20 countries and by 2009 will have an additional 19. And, through our Technology Center, we are helping the rural poor build technology businesses and access information and communications technology that is critical for overall economic development.

Fighting global poverty is an enormous challenge that will take a multifaceted approach and microfinance has proven to be one of the best hopes for matching the sheer magnitude of this problem. According to the Microcredit Summit Campaign, more than 113 million people are already receiving these essential financial services. Because the Grameen Foundation is dedicated to advancing the success of microfinance, we have challenged ourselves to achieve the following three goals by March 31, 2009:

  • Reach five million new microfinance clients.
  • Ensure that 50 percent of clients escape poverty within five years of their first loan.
  • Deliver three innovations that will increase substantially the delivery of microfinance to far more of the world's poorest people.

The Grameen Foundation is committed to helping rapidly scale up global microfinance so hundreds of millions can be spared from living in miserable conditions.