IDEAS home Printed from https://ideas.repec.org/a/rnd/arjsds/v4y2013i7p339-348.html
   My bibliography  Save this article

The Effectiveness of Micro-Finance Institutions in Alleviating Poverty: The Case of Bangladesh’s Grameen Bank and BRAC

Author

Listed:
  • Naziruddin Abdullah

Abstract

Microcredit is the most effective and successful way to let the poor having access to credit. Research to study its impact on alleviating poverty among the poor is numerous. However, unlike others, our study examines the effectiveness of Grameen Bank and BRAC, the two major micro-financers in alleviating poverty among the most disadvantaged people in Bangladesh. Hitherto, a study of this nature in which two Bangladesh’s micro-financers operating in four districts are surveyed and appraised side by side is hardly at one’s disposal. As such, this study can be considered as pioneering in its attempt. Our study has revealed the followings: (i) the poor are the direct beneficiary of the existing micro-finance institutions in Bangladesh. Nevertheless, some of them, especially those who have accounts in both banks, are having problem to repay the loans. Therefore, a mechanism has to be devised to limit each person to enjoy one loan at a time. In addition, a high percentage of the poor in Bangladesh is looking forward to making loans from interest-free banks; and, (ii) the services rendered by both micro-financers to the poor are still no better than the conventional banks. In fact, more than 50.0 per cent of the respondents have shown their dissatisfaction with the services extended to them. To address this problem, it is highly recommended for both micro financers to improve their services by way of making it mandatory for their staff to undergo relevant training programs.

Suggested Citation

  • Naziruddin Abdullah, 2013. "The Effectiveness of Micro-Finance Institutions in Alleviating Poverty: The Case of Bangladesh’s Grameen Bank and BRAC," Journal of Social and Development Sciences, AMH International, vol. 4(7), pages 339-348.
    • Handle: RePEc:rnd:arjsds:v:4:y:2013:i:7:p:339-348
    DOI: 10.22610/jsds.v4i7.770
    as

    Download full text from publisher

    File URL: https://ojs.amhinternational.com/index.php/jsds/article/view/770/770
    Download Restriction: no
    File URL: https://ojs.amhinternational.com/index.php/jsds/article/view/770
    Download Restriction: no
    File URL: https://libkey.io/10.22610/jsds.v4i7.770?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
    2. Jonathan Morduch, 1999. "The Microfinance Promise," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1569-1614, December.
    3. Buckley, Graeme, 1997. "Microfinance in Africa: Is it either the problem or the solution?," World Development, Elsevier, vol. 25(7), pages 1081-1093, July.
    4. John Weiss & Heather Montgomery, 2005. "Great Expectations: Microfinance and Poverty Reduction in Asia and Latin America," Oxford Development Studies, Taylor & Francis Journals, vol. 33(3-4), pages 391-416.
    5. Schuler, Sidney Ruth & Hashemi, Syed Mesbahuddin & Riley, Ann P., 1997. "The influence of women's changing roles and status in Bangladesh's fertility transition: Evidence from a study of credit programs and contraceptive use," World Development, Elsevier, vol. 25(4), pages 563-575, January.
    6. Hulme, David, 2000. "Impact Assessment Methodologies for Microfinance: Theory, Experience and Better Practice," World Development, Elsevier, vol. 28(1), pages 79-98, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James C. Brau & Gary M. Woller, 2004. "Microfinance: A Comprehensive Review of the Existing Literature," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 9(1), pages 1-28, Spring.
    2. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    3. João Paulo Coelho Ribeiro & Fábio Duarte & Ana Paula Matias Gama, 2022. "Does microfinance foster the development of its clients? A bibliometric analysis and systematic literature review," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-35, December.
    4. Naveen K Shetty, 2008. "The Microfinance Promise in Financial Inclusion and Welfare of the Poor: Evidence from Karnataka, India," Working Papers 205 Keyword : Banking, Mi, Institute for Social and Economic Change, Bangalore.
    5. Chliova, Myrto & Brinckmann, Jan & Rosenbusch, Nina, 2015. "Is microcredit a blessing for the poor? A meta-analysis examining development outcomes and contextual considerations," Journal of Business Venturing, Elsevier, vol. 30(3), pages 467-487.
    6. Hailu Abebe Wondirad, 2022. "Interest rates in microfinance: What is a fair interest rate when we lend to the poor?," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4537-4548, December.
    7. M. Jahangir Alam Chowdhury & Dipak Ghosh & Robert E. Wright, 2005. "The impact of micro-credit on poverty: evidence from Bangladesh," Progress in Development Studies, , vol. 5(4), pages 298-309, October.
    8. Simon Zaby, 2019. "Science Mapping of the Global Knowledge Base on Microfinance: Influential Authors and Documents, 1989–2019," Sustainability, MDPI, vol. 11(14), pages 1-21, July.
    9. Mr. Vassili Prokopenko & Mr. Paul Holden, 2001. "Financial Development and Poverty Alleviation: Issues and Policy Implications for Developing and Transition Countries," IMF Working Papers 2001/160, International Monetary Fund.
    10. Tanjinul Hoque Mollah & Sharmin Shishir & Wahid Ullah & Takaaki Nihei, 2019. "Assessing NGOs micro-credit programs: a geo-spatial and socio-economic scenario from rural Bangladesh," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 66(2), pages 79-99, June.
    11. Sefa Awaworyi Churchill & Jeffrey Korankye Danso & Elikem Nyatefe, 2018. "Microfinance Institution Performance: Does the Macroeconomy Matter?," Economic Papers, The Economic Society of Australia, vol. 37(4), pages 429-442, December.
    12. Gashaw Tadesse Abate & Carlo Borzaga & Carlo Borzaga, 2014. "Cost efficiency and outreach of microfinance institutions in Ethiopia: Do they contrast with financial cooperatives?," Euricse Working Papers 1465, Euricse (European Research Institute on Cooperative and Social Enterprises).
    13. Montgomery, Heather, 2005. "Meeting the double bottom line: the impact of Khushhali bank's microfinance program in Pakistan," MPRA Paper 32595, University Library of Munich, Germany.
    14. Gustavo Barboza & Sandra Trejos, 2009. "Micro Credit in Chiapas, México: Poverty Reduction Through Group Lending," Journal of Business Ethics, Springer, vol. 88(2), pages 283-299, September.
    15. Asma Boussetta, 2022. "Microfinance, Poverty and Education," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 86-108, March.
    16. Wan Nurulasiah binti Wan Mustapa & Abdullah Al Mamun & Mohamed Dahlan Ibrahim, 2018. "Economic Impact of Development Initiatives on Low-Income Households in Kelantan, Malaysia," Social Sciences, MDPI, vol. 7(7), pages 1-17, July.
    17. Joana Silva Afonso, 2020. "Impact evaluation, social performance assessment and standardisation: reflections from microfinance evaluations in Pakistan and Zimbabwe," Working Papers in Economics & Finance 2020-14, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.
    18. Indunil De Silva, 2012. "Evaluating the Impact of Microfinance on Savings and Income in Sri Lanka:Quasi-experimental Approach Using Propensity Score Matching," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 6(1), pages 47-74, February.
    19. Debadutta Kumar Panda, 2017. "Impact assessment of group-based credit–lending projects with controlled project placement bias and self-selection bias," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 44(3), pages 227-238, September.
    20. Madajewicz, Malgosia, 2011. "Joint liability versus individual liability in credit contracts," Journal of Economic Behavior & Organization, Elsevier, vol. 77(2), pages 107-123, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rnd:arjsds:v:4:y:2013:i:7:p:339-348. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Tayyab (email available below). General contact details of provider: https://ojs.amhinternational.com/index.php/jsds .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.