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Microfinance Growth and Poverty Reduction in Bangladesh: What Does the Longitudinal Data Say?

Author

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  • Khandker, Shahidur R.

    (World Bank)

  • Samad, Hussain A.

    (World Bank)

Abstract

This study investigates the long-term effects of microcredit programs, which have been operating in rural Bangladesh for over 20 years, on household income, expenditure, and poverty. The analysis shows that continuous participation in microcredit programs has helped participant households earn higher income and consume more, thereby lifting many of them out of poverty. Our estimates suggest that poverty reduction, in particular the reduction of extreme poverty, due to microcredit intervention accounts for more than 10 percent of the total reduction in extreme poverty in rural Bangladesh over the 2000-2010 decade.

Suggested Citation

  • Khandker, Shahidur R. & Samad, Hussain A., 2014. "Microfinance Growth and Poverty Reduction in Bangladesh: What Does the Longitudinal Data Say?," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(1-2), pages 127-157, March-Jun.
    • Handle: RePEc:ris:badest:0572
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    Cited by:

    1. Jesmin Akhter & Kun Cheng, 2020. "Sustainable Empowerment Initiatives among Rural Women through Microcredit Borrowings in Bangladesh," Sustainability, MDPI, vol. 12(6), pages 1-19, March.
    2. S.M. Ashraf Hossain & Md. Ashikur Rahman, 2022. "The Impact of Microcredit on the Living Standard of Loan Takers: A Study in Naogaon District, Rajshahi," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(11), pages 266-270, November.
    3. Mathilde Maîtrot & Miguel Niño-Zarazúa, 2017. "Poverty and wellbeing impacts of microfinance: What do we know?," WIDER Working Paper Series 190, World Institute for Development Economic Research (UNU-WIDER).
    4. Juanita Salinas & Susana Sastre-Merino, 2021. "Social Capital as an Inclusion Tool from a Solidarity Finance Angle," Sustainability, MDPI, vol. 13(13), pages 1-22, June.
    5. Hafiz Saqib Mehmood Najmi & Farrukh Bashir & Muhammad Zubair Zia, 2015. "Socioeconomic Impact of Microfinance on Borrowers: A Case Study of NRSP Bank Minchanabad," Pakistan Journal of Humanities and Social Sciences, International Research Alliance for Sustainable Development (iRASD), vol. 3(1), pages 41-61, June.
    6. Woutersen, Tiemen & Khandker, Shahidur R., 2014. "Estimating the long-run impact of microcredit programs on household income and net worth," Policy Research Working Paper Series 7040, The World Bank.
    7. Khandker, Shahidur R. & Samad, Hussain A., 2013. "Are microcredit participants in Bangladesh trapped in poverty and debt ?," Policy Research Working Paper Series 6404, The World Bank.
    8. Laila Arjuman Ara & Mohammad Masudur Rahman & Chanwahn Kim, 2020. "Impact of Microcredit on Second Generation Borrowers in Bangladesh: Revisited," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 21(1), pages 142-157, March.
    9. Asadul Islam & Debayan Pakrashi, 2014. "The Microcredit Puzzle: Labour Supply Behaviour of Rural Households in Bangladesh," Monash Economics Working Papers 24-14, Monash University, Department of Economics.
    10. Aroosa Khan & Muhammad Shaukat Malik, 2020. "Micro-Financing: A Comparative Study of Bangladesh & Pakistan," Business and Economic Research, Macrothink Institute, vol. 10(3), pages 181-202, September.
    11. Waqas Umar Latif & Sana Ullah & Wasim Ahmed & Muhammad Umar Sultan & Rana Muhammad Sohail Jafar & Muhammad Tariq & Wang Linping, 2020. "Microcredit and Economic Welfare: Experience of Poor Rural Households from Pakistan," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(6), pages 976-997, August.
    12. Mathilde Maîtrot & Miguel Niño-Zarazúa, 2017. "Poverty and wellbeing impacts of microfinance: What do we know?," WIDER Working Paper Series wp-2017-190, World Institute for Development Economic Research (UNU-WIDER).
    13. Dan Brockington & Nicola Banks, 2014. "Exploring the Success of BRAC Tanzania’s Microcredit Programme," Global Development Institute Working Paper Series 20214, GDI, The University of Manchester.
    14. Khandker, Shahidur R & Samad, Hussain A, 2016. "Bangladesh’s Achievement in Poverty Reduction: The Role of Microfinance Revisited," Working Papers 114, JICA Research Institute.

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    More about this item

    Keywords

    Microfinance; Poverty; Bangladesh;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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