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Microcredit - A More Credible Social than Economic Program in Bangladesh

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Author Info

  • Rafiqul Islam Molla

    ()
    (Faculty of Business and Law, Multimedia University)

  • Md. Mahmudul Alam

    ()
    (Institute for Environment and Development (LESTARI), Universiti Kebangsaan Malaysia)

Abstract

Calculated under the framework of economic-profit counting, the productivity of microcredit in Bangladesh is found very low. In this survey about 48% of the borrowers had to compromise their normal wages for self-employed labor to be able to pay the high interest for the credit. Similarly its social productivity is also found marginal. However, about 90% of the borrowers felt comfortable with microcredit even at so high interest rate seemingly to avoid losing or compromising their social and political empowerment at the hands of the local moneylenders or relatives. Borrowers give high value to their socio-political empowerments and are ready to compromise normal wages for their self-employed labor. In the game of political economy of credit for the poor, microcredit is seen as a means of protecting and enhancing socio-political empowerments of the low income and distressed people in the society and is appraised as a credible social than economic institution.

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File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I2-P102.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 31 (2011)
Issue (Month): 2 ()
Pages: 1095-1104

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Handle: RePEc:ebl:ecbull:eb-11-00017

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Related research

Keywords: Grameen Bank; microcredit; microenterprise; subsistent; poverty alleviation; stereotype; empowerment;

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  1. Rafiqul Islam Molla & M. Mahmudul Alam & Abu N. M. Wahid, 2008. "Questioning Bangladesh's Microcredit," Challenge, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 51(6), pages 113-121, November.
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Cited by:
  1. Mahmudul Alam & Rafiqul Islam Molla, 2012. "Limitations Of Microcredit For Promoting Microenterprises In Bangladesh," Economic Annals, Faculty of Economics, University of Belgrade, vol. 57(192), pages 41–54, January â.

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