How does the Grameen Bank operate without solid financial guarantees?

Question

Quizplus · Accepted Answer

The Grameen Bank operates through community building and social collateral instead of solid financial guarantees. This means that borrowers are organized into groups, and they are responsible for each other's loans. This social pressure and support system have proven to be effective in ensuring loan repayments and reducing default rates. The bank has been successful in providing financial services to the poor and helping them create businesses and improve their standard of living.

How Does the Grameen Bank Operate Without Solid Financial Guarantees