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Location Decisions of Microfinance Institutions of Bangladesh

Author

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  • Wadood, Syed Naimul
  • Mahmoud, Chowdhury Shameem

Abstract

The microcredit programs have expanded rapidly in Bangladesh in recent times. A recent phenomenon is that a large number of small and localized micro-finance institutions are operating side by side with established national-level institutions in the local-level microfinance markets. Here we examine the recent data from the Pathrail union of the Tangail district, one of the old places of microcredit, and we find interesting features regarding entry and operations of microcredit activities. One clear finding is that large and small micro-finance institutions tend to choose economically more prospective locations as their choices of destinations and in turn do have a tendency to ignore economically less prospective regions. We specify a panel data probit regression framework and the results derived are consistent with our casual observations of the data.

Suggested Citation

  • Wadood, Syed Naimul & Mahmoud, Chowdhury Shameem, 2010. "Location Decisions of Microfinance Institutions of Bangladesh," MPRA Paper 88605, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:88605
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    References listed on IDEAS

    as
    1. Mahmoud, Chowdhury Shameem & Khalily, M. A. Baqui & Wadood, Syed Naimul, 2009. "Dynamics of market share in the microfinance industry in Bangladesh," MPRA Paper 16172, University Library of Munich, Germany.
    2. Craig McIntosh & Alain Janvry & Elisabeth Sadoulet, 2005. "How Rising Competition Among Microfinance Institutions Affects Incumbent Lenders," Economic Journal, Royal Economic Society, vol. 115(506), pages 987-1004, October.
    3. McIntosh, Craig & Wydick, Bruce, 2005. "Competition and microfinance," Journal of Development Economics, Elsevier, vol. 78(2), pages 271-298, December.
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    Cited by:

    1. M. Niaz Asadullah, 2016. "Do Pro-Poor Schools Reach Out to the Poor? Location Choice of BRAC and ROSC Schools in Bangladesh," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(4), pages 432-452, December.

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    More about this item

    Keywords

    Microcredit; Location; Entry; Random Effects Probit Estimation;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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