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The Effects of Microfinance Programs on Recipients’ Livelihoods in Rural Bangladesh

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  • Mohummed Shofi Ullah Mazumder

    (Sher-e-Bangla Agricultural University)

Abstract

Despite the widespread use of microfinance programs since the early 1990s, there is little empirical research on the effects of microfinance on recipients’ livelihoods in rural areas. We therefore compared the effects of governmental and non-governmental microfinance on livelihood and empowerment in rural Bangladesh. Data were collected in two phases from the same 300 microfinance beneficiaries and 200 control respondents using face-to-face interviews. Both descriptive and inferential statistics (propensity score matching, Rosenbaum bounds, and ordinary least squares) were used for analysis. Fixed effects instrumental variable estimates were also designed to minimize spillover effects. Microfinance significantly contributed to different livelihood and empowerment dimensions to ultimately improve livelihoods, with the greatest improvements seen in non-governmental rather than governmental microfinance recipients.

Suggested Citation

  • Mohummed Shofi Ullah Mazumder, 2022. "The Effects of Microfinance Programs on Recipients’ Livelihoods in Rural Bangladesh," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1383-1418, June.
    • Handle: RePEc:pal:eurjdr:v:34:y:2022:i:3:d:10.1057_s41287-021-00425-w
    DOI: 10.1057/s41287-021-00425-w
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    References listed on IDEAS

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    More about this item

    Keywords

    Microfinance; Rural livelihood and empowerment; Fixed effects instrumental variables (FE-IV); Propensity score matching (PSM); Rosenbaum bounds;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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