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The impact of micro-credit on poverty: evidence from Bangladesh

Author

Listed:
  • M. Jahangir Alam Chowdhury

    (Department of Finance and Banking, University of Dhaka, Bangladesh)

  • Dipak Ghosh

    (Department of Economics, University of Stirling, Stirling FK9 4LA, UK, dipak.ghosh@stir.ac.uk)

  • Robert E. Wright

    (Department of Economics, University of Stirling, Stirling FK9 4LA, UK)

Abstract

This paper examines empirically the impact of micro-credit on poverty in Bangladesh. Unlike previous studies, the focus is on both objective and subjective poverty and particular attention is paid to the length of time programme participants have had access to micro-credit. A household-level survey ( N = 954) was carried out, collecting information about micro-credit recipients from Grameen Bank, the Bangladesh Rural Advancement Committee and the Association of Social Advancement. Our two main findings are, first, micro-credit is associated with both lower objective and subjective poverty and, secondly, the impact of micro-credit on poverty is particularly strong for about six years with some levelling off after that point.

Suggested Citation

  • 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.
    • Handle: RePEc:sae:prodev:v:5:y:2005:i:4:p:298-309
    DOI: 10.1191/1464993405ps116oa
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Cited by:

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    2. Tanni Roy & Md. Emran Hossain & Md. Jahid Ebn Jalal & Jiban Krishna Saha & Eshrat Sharmin & Md. Akhtaruzzaman Khan, 2021. "Effects of credit on national and agricultural GDP, and poverty: a developing country perspective," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.
    3. M Saiful Islam & Tarikul Islam, 2018. "Micro-Finance for Women Empowerment: A Rural-Urban Analysis," Information Management and Business Review, AMH International, vol. 10(3), pages 38-46.
    4. Subhani, Muhammad Imtiaz & Osman, Ms.Amber, 2011. "Better Micro Financers in Pakistan, Banks or Financial Institutions," MPRA Paper 34722, University Library of Munich, Germany.
    5. Khatun, Mst Asma & Islam, Mohammad Amirul & Majumder, Shankar, 2012. "Impact of micro-credit programmes on poverty alleviation in Bangladesh," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 35(1-2).
    6. Mausumi Mahapatro & Deborah Johnston, 2020. "Imperfection Measures and the Production of Poverty: A Case Study of the Use of the Asset Index in Bangladesh," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(2), pages 513-531, November.
    7. Chenhong Peng & Paul S. F. Yip & Yik Wa Law, 2020. "What Factors Beyond Economic Poverty Lead People in High-income Societies to Feel Poor? Evidence from Hong Kong," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(3), pages 991-1027, December.
    8. Muhammad Imtiaz Subhani & Amber Osman, 2011. "Better Micro Financers in Pakistan, Banks or Financial Institutions," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 1(1), pages 104-109, March.
    9. Kadyrbek Sultakeev & Kamalbek Karymshakov & Burulcha Sulaimanova, 2018. "The Impact Of Microfinance On Entrepreneurship In Kyrgyzstan," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2018(2), pages 24-40.
    10. Vu Ha Thu & Daisaku Goto, 2020. "Does Microfinance Improve the Household Welfare of Ethnic Minorities? Evidence from Bac Kan Province, Vietnam," Progress in Development Studies, , vol. 20(1), pages 65-83, January.
    11. Parwez, Sazzad, 2013. "Impact Assessment of Self Help Group towards Rural Development: A Case Study of Jharkhand, India," MPRA Paper 60460, University Library of Munich, Germany, revised 21 Jan 2014.
    12. N’Banan Ouattara & Xueping Xiong & Moussa Bakayoko & Trazié Bertrand Athanase Youan Bi & Dessalegn Anshiso Sedebo & Zié Ballo, 2022. "What Influences Rice Farmers’ Choices of Credit Sources in Côte d’Ivoire? An Econometric Analysis using the Multinomial Conditional Logit Model," Progress in Development Studies, , vol. 22(2), pages 149-173, April.
    13. 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.
    14. Tonya Knight & Farhad Hossain & Christopher J. Rees, 2009. "Microfinance and the commercial banking system," Progress in Development Studies, , vol. 9(2), pages 115-125, April.
    15. Baldi, Guido & Sadovskis, Vairis & Šipilova, Viktorija, 2014. "Economic and Employment Effects of Microloans in a Transition Country," MPRA Paper 52736, University Library of Munich, Germany.
    16. Debashis Sarker, 2015. "Inclusion of disabled people in microfinance institutions: Where does Bangladesh stand?," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 1(1), pages 67-79, April.
    17. Khan, Md Faisal Abedin & Uddin, Md Sazib & Giessen, Lukas, 2021. "Microcredit expansion and informal donor interests: Experiences from local NGOs in the Sundarbans Mangrove Forest, Bangladesh," World Development Perspectives, Elsevier, vol. 21(C).
    18. Shakina Sultana Pomi, 2019. "Impact of Microcredit on Rural Poverty Alleviation in the Context of Bangladesh," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(6), pages 1-70, June.
    19. Rajeshwari, B. & Deo, Nandini & van Wessel, Margit, 2020. "Negotiating autonomy in capacity development: Addressing the inherent tension," World Development, Elsevier, vol. 134(C).
    20. Mohammad Mojibul Hoque Mozumder & Md. Abdul Wahab & Simo Sarkki & Petra Schneider & Mohammad Mahmudul Islam, 2018. "Enhancing Social Resilience of the Coastal Fishing Communities: A Case Study of Hilsa ( Tenualosa Ilisha H.) Fishery in Bangladesh," Sustainability, MDPI, vol. 10(10), pages 1-21, September.
    21. María del Pilar López Uribe & María Alejandra Chávez & María Paula Neira & Paulina Pastrana, 2021. "La Agenda Global de Género: un camino para el empoderamiento," Documentos CEDE 19150, Universidad de los Andes, Facultad de Economía, CEDE.
    22. 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.
    23. Syeda Sonia Parvin & Belayet Hossain & Muhammad Mohiuddin & Qingfeng Cao, 2020. "Capital Structure, Financial Performance, and Sustainability of Micro-Finance Institutions (MFIs) in Bangladesh," Sustainability, MDPI, vol. 12(15), pages 1-18, August.
    24. Dhaoui, Iyad, 2011. "La microfinance comme outil de lutte contre la pauvreté: réflexions de l'expérience d'ENDA [Microfinance as a tool for fighting poverty: reflections from ENDA's experience]," MPRA Paper 87359, University Library of Munich, Germany.

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