Conclusion Bang vs india
The village communities of Bangladesh are generally more socially and economically homogeneous and less divided by caste than their counterparts in most Indian villages. Hence, it is easier to form groups that would follow a standardized procedure. This makes it easier to operate with the Grameen system in Bangladesh than in India. It is observed that the Grameen system is better suited for more densely populated areas.
There are parts of India which are as densely populated as Bangladesh, and some of the Northern hill tracts, and some part of the Sundarbans, are fairly thinly populated. The population density in India is a little higher than 1/3rd that of Bangladesh.
In the Grameen system, the groups avail micro-financial services from the Bank, while the SHGs are effectively a microbank carrying out their own savings mobilization and lending.
The basic difference in the approaches of the Grameen system and the SHG model is that the former starts with microcredit and then graduates to micro-savings, while the SHG model is based on the concept of micro-savings leading to micro-credit. Thus, the SHG model is more sustainable from viability point of view. Though both the models are for the poor, yet Grameen system is more suited to the very poor category of people who may not have sufficient fund to generate the initial savings required in the SGH system.
Unlike Bangladesh, India has a good network of commercial banks with almost 70% of the 80,000-odd bank branches located in the rural and semi-urban areas. Policies of the Government to make it mandatory for the banks to extend credit to the priority sector and also support the cause by providing funds to these commercial banks at a reduced rate of interest have helped in the development and support of the SHG model in India. In addition to the banks, India has the advantage of having more than 1,39,000 post offices in the rural areas. Since the post offices are part of the Central Government network, there is the opportunity of utilizing these post offices for microfinancial services for the poor through the SHGs. This would not only increase the reach of the Government system to the poor, but would also improve the utilization of the post offices.