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Impact of Microcredit on Second Generation Borrowers in Bangladesh: Revisited

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  • Laila Arjuman Ara
  • Mohammad Masudur Rahman
  • Chanwahn Kim

Abstract

This article investigates the economic impact of continuing borrowers’ participation in the microcredit programme on poverty eradication in Bangladesh. A panel data set was collected through a field survey for the years 2013–2016 to identify the impact of a microcredit programme on continuous participation borrowers. The propensity score matching (PSM) method is used to eliminate selection bias and the difference-in-difference (DID) model is applied for the empirical analysis. The findings of the study demonstrate that more benefits are realized from continued participants compared to discontinued participants. JEL: C83, D14, G21, O12

Suggested Citation

  • 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.
    • Handle: RePEc:sae:soueco:v:21:y:2020:i:1:p:142-157
    DOI: 10.1177/1391561420908086
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    References listed on IDEAS

    as
    1. Matthieu Chemin, 2008. "The Benefits and Costs of Microfinance: Evidence from Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 44(4), pages 463-484, April.
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    3. 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.
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    7. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
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    9. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
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    More about this item

    Keywords

    Continuous participation; microcredit; poverty; Bangladesh; propensity score matching (PSM); difference-in-difference (DID);
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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