Microfinance as a Development and Poverty Alleviation Tool in Rural Bangladesh: A Critical Assessment

Ali, Isahaque; Hatta, Zulkarnain A.; Azman, Azlinda; Islam, Shafiqul

doi:10.1111/aswp.12106

Cited by 40 publications

(31 citation statements)

References 27 publications

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“…Credit dispersal in the SHGs was based on need and priority, that is, the member with the most urgent need, as decided by the president, was given priority over other applicants. Previous studies have indicated that this approach of deciding upon beneficiaries sometimes results in biased decisions (Ali, Hatta, Azman, & Islam, ). Payment of school fees, medical treatment, marriage, and housing construction were the main reasons cited by members for needing a loan.…”

Section: Resultsmentioning

confidence: 99%

Functioning of self‐help groups in India: Members’ perceptions of key issues

Huma

Hasan

2017

Asian Soc Wrk & Pol Rev

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Self-help group-bank linkage program is considered a powerful tool for eradicating poverty in many poor and developing countries, especially in Asia. The number of these groups has increased rapidly during the last few years; however, their efficacy to achieve long-term poverty alleviation has been questioned by many researchers.Previous studies have focused mainly on objective indicators to understand the program's impact on the lives of its members, such as changes in the economic condition and the development of conceptual frameworks. The present study primarily focuses on member perceptions of the overall functioning of the self-help group. A questionnaire survey was administered to 15 presidents and 75 group members belonging to 15 self-help groups with active bank accounts in Chandigarh, a union territory of India. Drawing on their responses and perceptions, the five major problems faced by these groups were identified as: (i) ineffective group meetings, (ii) absence of income-generating activities, (iii) lack of cooperation among members, (iv) lack of awareness, and (v) minimal savings. Our key recommendations include: (i) increased organizational support, (ii) focus on skill development, (iii) training and motivation, (iv) effective leadership, and (v) regular meetings.

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Section: Resultsmentioning

confidence: 99%

Functioning of self‐help groups in India: Members’ perceptions of key issues

Huma

Hasan

2017

Asian Soc Wrk & Pol Rev

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“…She also reported the demining behaviour of the field officers (Karim, 2011). Ali et al, (2017) carried out another extensive research on the borrowers of BRAC, ASA and Proshika in Bogra district of Bangladesh. They found ineffective performances of these organizations.…”

Section: Similarities With Others Researchesmentioning

confidence: 99%

“…In some cased, mismanagement, unskilled and corrupted field staffs were held responsible for mistreating the poor beneficiaries (I. Ali et al, 2017). Another empirical study recently carried out in Satkhira district of Bangladesh.…”

Section: Similarities With Others Researchesmentioning

confidence: 99%

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Forced Loan-Recovery Technique of the Microfinance Institutes in Bangladesh and Its Impact on the Borrowers: An Empirical Study on Grameen Bank, Brac and Asa

Islam

Karim²,

Ahmad³

2018

RISUS

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This paper presents the consequences of ‘forced loan-recovery’, which is an unconstitutional technique allegedly practiced by most of the microfinance institutes (MFIs) in Bangladesh. An empirical study was carried out on the borrowers of three leading microfinance institutes namely, Grameen Bank (GB), BRAC and ASA. Data were collected from two poverty-plagued villages namely, Uttar Islampur and Ruhitpur of Munshiganj district. The mixed research methods were applied. Findings of this study demonstrate that most of the borrowers experience assorted problems on the day of loan repayment. If they fail to pay back the debt aright loan officers and their allies treat them raucously. In order to avoid such unpleasant situations, insolvent borrowers tend to make multiple auxiliary loans and payback the previous ones. As a result, they fall into the decoy of a borrowing-repaying cycle. Sometimes, over-indebtedness compels them to sell out their tangible assets. Thus, they become even poorer. Furthermore, borrowers use to experience discontented domestic and social lives due to such loan-collection techniques of the microfinance institutes.

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“…Indeed, if microcredit can provide better access to institutional credit, it can help rural households manage risks and acquire inputs, including technology, to modernize agriculture and improve farm/nonfarm linkages [25]. Otherwise, microfinance may be unable to achieve poverty reduction [51][52][53][54] because of possible high interest rates, insufficient loans, unproductive use of loans, or even corruption and poor skills of microfinance institution staff [54]. Obviously, severe financial repression still exists in rural and poverty-stricken areas.…”

Section: Introductionmentioning

confidence: 99%

Credit Constraint, Credit Adjustment, and Sustainable Growth of Farmers’ Income

Xiao-hua

Chen

et al. 2018

Sustainability

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Research on financial theory and practice has shown that the development of transition economies generally faces two major challenges. First, the less developed regions face more severe financial repression, which leads to imbalanced and unsustainable development of regional economies. Second, farmers face different credit constraints because of their productivity differences, which can further polarize the internal inequality of their income. Based on cross-sectional data of 2037 counties in 30 provinces of China in 2010, this paper employs quantile regression to investigate the relationships among credit constraints, credit adjustment, and the sustainable growth of farmers’ income. Our results confirm that rural residents generally face credit constraints, and there are significant stratified differences in the impact of farmer credit on farmers’ income. Farmers with higher income are more likely to obtain bank credit and continue to grow their income, while farmers with lower income are more likely to fall into the “vicious circle of poverty” because of their lack of capital accumulation. Therefore, to promote more fair and sustainable growth of farmers’ income, it is important to increase the credit available to farmers. Furthermore, it is critical to promote healthy competition among county financial institutions and accelerate the establishment of inclusive financial systems. This can ultimately help ensure sustainable development of agriculture and rural economy.

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Microfinance as a Development and Poverty Alleviation Tool in Rural Bangladesh: A Critical Assessment

Cited by 40 publications

References 27 publications

Functioning of self‐help groups in India: Members’ perceptions of key issues

Functioning of self‐help groups in India: Members’ perceptions of key issues

Forced Loan-Recovery Technique of the Microfinance Institutes in Bangladesh and Its Impact on the Borrowers: An Empirical Study on Grameen Bank, Brac and Asa

Credit Constraint, Credit Adjustment, and Sustainable Growth of Farmers’ Income

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