Grameen Bank vs RDS of IBBL: A Comparative Analysis

Abstract

Interest-based Grameen Bank and Islamic Shariah-based Rural Development Scheme (RDS) of Islami Bank Bangladesh Limited (IBBL) provide micro finance to the rural poor of Bangladesh. The main purpose of this study is to make a comparative analysis of them with a view to enumerating the superiority. It is demonstrated that contrary to prevailing notion, Micro-credit alone can‟t break the vicious circle of poverty unless it is operated under the Islamic Banking System where poor borrower has an opportunity to learn Islamic values and culture and to move from Micro-credit to market through micro enterprise after its successful graduation process. The study is divided into 5 sections. After an introduction in section 1, Grameen Bank model and its weaknesses have been discussed in section 2, while section 3 analyses the RDS model of IBBL. In section 4 a comparison between RDS and Grameen Bank has been made and a conclusion has been drawn in the last section.