Economic Analysis on the Operation Mechanism of Grameen Bank of Bangladesh

The main reasons are explored about the success of Grameen Bank in providing financial services in rural areas from the point of economics and some experience is found out for reference to develop rural microfinance in China.After the analysis of its mechanism by the approach of economic analysis,the main successful reasons are concluded: it is the design of products and incentives that allow Grameen to make small loans to poor people without physical collateral.Referring to its membership, group loan with joint liability,forced savings,non-financial products,structures and staff training,all these will help think of how to develop microfinance in the rural areas.