Achmad Herry Herfandy; Arman Uddowla; Arif Muhammad , pp. 71. MAM/Sektionen för Management, 2009.
Microfinance Institutions (MFI) is an organization that provides financial services (microcredit, saving schemes, etc.) to the poor who are considered as ‘not bankable’. MFIs have been proven as a great contributor in poverty alleviation in addition to bringing development to the poorest areas in the world which in the long run will reduce world poverty; however their sustainability is at stake. It is vital to understand the variables that impact the failure and success which determine its sustainability. Hence, we aim to answer this research question – How MFI’s reinvent their business model in order to stay sustainable.
The paper will focus on Business Process Reengineering as one of the tools to make MFIs sustainable in the long run. A case study analysis on Grameen Bank’s transformation into Grameen II was taken consecutively to analyze how a MFI carries out a business reengineering process. All types of secondary data on Grameen Bank was collected and analyzed. For analysis we chose the method of deduction and interpretation of the primary data (interviews) and compared the results with the literature of the secondary data. In the end, in order to achieve sustainability MFIs re-invent their business model by undertaking a radical change in their ways of doing business, a complete overhaul. In future, this thesis paper would aid researchers who are interested in finding out the validity and acceptability of BPR & Grameen II: Grameen Generalized System methodology.