Financing micro-entrepreneurs for poverty alleviation: a performance analysis of microfinance services offered by BRAC, ASA, and Proshika from Bangladesh

Abstract

Microfinance services have emerged as an effective tool for financing microentrepreneurs to alleviate poverty. Since the 1970s, development theorists have considered non-governmental microfinance institutions (MFIs) as the leading practitioners of sustainable development through financing micro-entrepreneurial activities. This study evaluates the impact of micro-finance services provided by MFIs on poverty alleviation. In this vein, we examine whether microfinance services contribute to poverty alleviation, and also identify bottlenecks in micro-finance programs and operations. The results indicate that the micro-loans have a statistically significant positive impact on the poverty alleviation index and consequently improve the living standard of borrowers by increasing their level of income.

Influence of Crediting Strategy on Growth of Small and Micro Enterprises in Kenya: A Case of Women Enterprise Fund

“…These findings are similar to those obtained by study Maenge & Otuya [49], Hussein [1], Khanam, Mohiuddin & Weber [56] and Phrah [50]. These scholars argue that availability of credit facilities promotes performance of SMEs.…”

“…Small loans granted to women can help them to build capital base which are can be used for investment in small scale businesses. These views are shared by Khanam, Mohiuddin & Weber [56], who argued that small loans given to women bring financial autonomy and empowerment resulting possession of power and control in the household decisions. Micro loaning strategy can help poor women to overcome their deprivation.…”

Empowerment of the Extreme Poor Women through Microfinance: Evidence from Northern Part of Bangladesh

“…However, formulating a valid and reliable measure of women's empowerment is difficult due to social norms, geography, economic opportunities, human behavior, beliefs, and attitudes which varies significantly among societies. There are a number of studies (Hulme & Moore, 2007); (Hultberg, 2008;Islam, 2014;Khanam et al, 2018) that measured the empowerment status of women, however, none of these is out of criticism. Most of the previous studies capture some 'possible slice of empowerment than empowerment itself (Malhotra & Schuler, 2005).…”

“…Due to the gender specific barriers and socio-economic and cultural disparities, rural women in the society remain the most vulnerable section in Bangladesh (Alam, Monirul Alam, & Mushtaq, 2018;Khatun, 2017;Mersland, Nyarko, & Szafarz, 2019;Sarker, Yang, Lv, Enamul, & Kamruzzaman, 2020b). Poverty incidence is comparatively severe and acute among women than men (Khanam, Mohiuddin, Hoque, & Weber, 2018). Microfinance programs mainly deal with those disposed women and provides social and financial intermediation to address the issues related to poverty alleviation (Sofi & Sumaira, 2016), financial support to initiate microenterprises, and overall gender development (Hoque, 2014).…”

Evolution of social microenterprises from rural to the urban area: A study on income‐generating micro‐entrepreneurs in an urban context

“…Besides, publications on microfinance in top management journals are found to be limited (Ault & Spicer, 2013; Battilana & Dorado, 2010; Khavul, 2010), and microfinance is yet to be embraced by the dominant entrepreneurial finance literature (Brau & Woller, 2004). It is only recently that social entrepreneurship scholars have begun noticing and considering the teachings of the microfinance industry in terms of seeing the poor as entrepreneurs in need of financing (Bruton, Khavul, Siegel, & Wright, 2013; Khanam, Mohiuddin, Hoque, & Weber, 2018). Joan Clos of UN‐HABITAT (2011, p‐iii) claimed that “global poverty is moving into cities, mostly in developing countries; in a process, we call the urbanization of poverty.” Barboza and Trejos (2009) further argued that microcredit programs should focus on entrepreneurship development as a tool to alleviate poverty among those excluded from formal financial markets.…”