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Micro-Credit and Poverty Reduction: A Case of Bangladesh

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  • Mohummed Shofi Ullah Mazumder
  • Lu Wencong

Abstract

Bangladesh is a pioneer and home of conceptualizing micro-credit program. It has undertaken a number of such programs to reduce poverty and bring about socio-economic changes in the rural community. The main purpose of this paper is to give an overview about access to micro-credit for rural poor and its impact on their poverty situation and relevant factors related to income of the micro-credit recipients. Data was collected in two phases from the same respondents (April 2009 and April 2010) using a face-to-face interview schedule from a sample of 360 micro-credit recipients. Additionally, another set of 60 non-credit beneficiary respondents was also taken as a control group to compare the consequences of the program. Major findings reveal that positive impact was found on income, assets endowment, standard of living and poverty reduction. Utilization of credit appears to be major factor for credit recipients raising income compared to their control group. This shows that micro-credit tends to be an important factor to have an impact on household income which minimizes the poverty situation to a reasonable extent.

Suggested Citation

  • Mohummed Shofi Ullah Mazumder & Lu Wencong, 2013. "Micro-Credit and Poverty Reduction: A Case of Bangladesh," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(3), pages 403-417.
    • Handle: RePEc:prg:jnlpep:v:2013:y:2013:i:3:id:459:p:403-417
    DOI: 10.18267/j.pep.459
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    References listed on IDEAS

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    7. Sharma, Manohar & Zeller, Manfred, 1999. "Placement and Outreach of Group-Based Credit Organizations: The Cases of ASA, BRAC, and PROSHIKA in Bangladesh," World Development, Elsevier, vol. 27(12), pages 2123-2136, December.
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    Cited by:

    1. Dilruba Khanam & Muhammad Mohiuddin & Asadul Hoque & Olaf Weber, 2018. "Financing micro-entrepreneurs for poverty alleviation: a performance analysis of microfinance services offered by BRAC, ASA, and Proshika from Bangladesh," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-17, December.
    2. Muhammad Tariq & Abdur Rehman Aleemi & Dr.Athar Iqbal, 2015. "Investigating The Role Of Micro Finance On Economic And Social Development Of People: A Case Study Of Rural Areas Of Sind, Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 11(2), pages 182-199.
    3. Muhammad Tariq & Abdur Rehman Aleemi & Dr. Athar Iqbal, 2015. "Investigating The Role Of Micro Finance On Economic And Social Development Of People: A Case Study Of Rural Areas Of Sind, Pakistan," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 11(2), pages 11-14.
    4. Dilruba Khanam & Syeda Sonia Parvin & Muhammad Mohiuddin & Asadul Hoque & Zhan Su, 2018. "Financial Sustainability of Non-Governmental Microfinance Institutions (MFIs): A Cost-Efficiency Analysis of BRAC, ASA, and PROSHIKA from Bangladesh," Review of Economics & Finance, Better Advances Press, Canada, vol. 12, pages 43-56, May.
    5. Farjana Misu & Mst. Asma Khatun & Mohammad Amirul Islam, 2021. "Are the Enclaves on the Same Boat? An Investigation on the Development Indicators of Dahagram–Angarpota of Bangladesh," South Asian Survey, , vol. 28(2), pages 318-340, September.

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    More about this item

    Keywords

    micro-credit; socio-economic impact; poverty alleviation;
    All these keywords.

    JEL classification:

    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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