The role of training in reducing poverty: the case of agricultural workers receiving microcredit in Bangladesh

Abstract

The policy of providing microcredit and skill training to poor agricultural workers in developing countries is wellestablished. In this study, an attempt has been made to assess the effectiveness of the training part of that policy. BRAC (formerly the Bangladesh Rural Advancement Committee), the largest non-governmental organization in Bangladesh, is making efforts to alleviate poverty by providing microcredit and relevant training to landless and marginal borrowers, who have less than 1.5 acres of land, in order to enhance their standard of living. The study aims to assess the effects of BRAC's training programs on the recipients' total household expenditure. Primary data were collected from female borrowers who participated in the microcredit programs of BRAC and these data reflect the key role women play in agricultural work and the lack of research on their status. The study shows that the training provided to the borrowers failed to create any significant impact on their household expenditure because only a small percentage of borrowers received training and the duration of the training was limited (on average three days per person). Moreover, many of those who received training experienced only a modest income effect. The findings are important ❒ not just for the practical purpose of influencing policies for reducing poverty in Bangladesh but also for their contribution to the understanding of the effectiveness of training. The existing literature is concerned mainly with the effectiveness of training in the context of business and other organizations in developed countries. Research on the effectiveness of training in developing countries, particularly in alleviating poverty, is less evident. Moreover, the present research is also exceptional as it focuses only on female trainees.

Does Training Really Matter to the Rural Poor Borrowers in Bangladesh? A Case Study on BRAC

“…BRAC's microfinance members have access to these services and can benefit from all other development interventions. The major tasks of the BRAC are as follows: (i) to provide microcredit facility to the poor for alleviating their poverty, (ii) to empower women through social development, (iii) to provide training facilities to the employees and the borrowers for increasing their skills, (iv) to conduct socioeconomic research on development issues, (v) to advocate for establishing human and legal rights of the citizens and (vi) to implement various development programmes in line with the national development policies with the collaboration of GoB and donor agencies (Mahmud et al ., ). BRAC is implementing its microcredit programme in all the districts of Bangladesh with a higher repayment rate (Mahmud et al ., ).…”

“…BRAC is one of the largest NGOs in Bangladesh and has been working for poverty alleviation since 1972 through operating microcredit programme (Mahmud et al, 2014). The BRAC microfinance programme is a critical component of a holistic approach to support livelihoods.…”

“…The major tasks of the BRAC are as follows: (i) to provide microcredit facility to the poor for alleviating their poverty, (ii) to empower women through social development, (iii) to provide training facilities to the employees and 2014). BRAC is implementing its microcredit programme in all the districts of Bangladesh with a higher repayment rate (Mahmud et al, 2014). The scenario of BRAC's activities has been presented in Table 1.…”

“…Training plays an important role as part of capacity building for the poor (Mahmud et al, 2014). Logically, it can be assumed that a trained person usually would be in an advantageous position in terms of investment, risk management, business negotiation and decision-making as compared with an untrained person.…”

“…It can be hypothesised that an educated person is more aware of the importance of healthcare in comparison with an uneducated person, and thus, she or he prefers to spend more on healthcare. In the rural context of Bangladesh, most of the farming households have financial constraints in pursuing their IGAs (Mahmud, 2010;Mahmud, 2011;Mahmud et al, 2014). Most of them live in a sub-standard manner because of their inadequate income resulting in lower level of consumption in terms of basic needs.…”