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Microfinance competition and multiple borrowing: Evidence using panel data from Bangladesh

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  • Minhaj Mahmud
  • Yasuyuki Sawada
  • Mari Tanaka

Abstract

We examine the causes and consequences of multiple borrowing in rural Bangladesh using long‐term household and village panel data covering the years 2000–2014. We find that the sharply growing number of microfinance institutions (MFIs) in a wider set of villages over time coincides with a corresponding increase in household borrowing from multiple MFIs and households accessing loans generally as well as significant rises in the total values of household assets, especially in the form of agricultural equipment. Although the increasing number of MFIs resulted in some households borrowing to repay previous loans, the fraction of such households is relatively small.

Suggested Citation

  • Minhaj Mahmud & Yasuyuki Sawada & Mari Tanaka, 2022. "Microfinance competition and multiple borrowing: Evidence using panel data from Bangladesh," Review of Development Economics, Wiley Blackwell, vol. 26(2), pages 1164-1188, May.
    • Handle: RePEc:bla:rdevec:v:26:y:2022:i:2:p:1164-1188
    DOI: 10.1111/rode.12869
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    References listed on IDEAS

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    Cited by:

    1. Malek, Mohammad Abdul & Kikkawa, Aiko & Azad, Abul Kalam & Sawada, Yasuyuki, 2022. "Rural Development in Bangladesh Over Four Decades: Findings from Mahabub Hossain Panel Data and the Way Forward," ADBI Working Papers 1350, Asian Development Bank Institute.
    2. Md Aslam Mia, 2024. "Loyalty of rural microfinance borrowers: International evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 67-94, January.

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