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Impact of Microcredit on Rural Poverty Alleviation in the Context of Bangladesh

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  • Shakina Sultana Pomi

Abstract

Microcredit and poverty alleviation have become the two sides of a coin as the role of microcredit on poverty alleviation is well accepted in the arena of economic development. This study is an attempt to analyse the impact of microcredit on poverty alleviation in the rural areas namely Hathazari, Mirsharai and Sitakunda upazilla (sub-units of district ) of Chittagong district, Bangladesh. A cross sectional survey was conducted on the rural part of these three upazillas. Data have been collected through a well-structured questionnaire from 100 microcredit-recipients/borrowers of Bangladesh Rural Advancement Committee (BRAC) and Association for Social Advancement (ASA) - two giant microcredit providers in Bangladesh and from 50 non-borrowers of the study areas. Respondents were selected randomly. Tabular method was used to describe the data. Hypothetically, the outcomes were found significant resulted from chi-square test (X ² -test) and ANOVA (Analysis of Variance) without an exception for clothing expenditure. The study revealed that microcredit disbursed through BRAC and ASA, plays a dynamic role to reduce poverty in the study areas by income generating activities of the poor women borrowers and by improving their living standard. It is found from the study that microcredit has positive impact on income, expenditure, condition of dwelling house, education, health and decision making ability of the poor women borrowers who spent at least five years in BRAC and ASA comparing to the non-borrowers.

Suggested Citation

  • Shakina Sultana Pomi, 2019. "Impact of Microcredit on Rural Poverty Alleviation in the Context of Bangladesh," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(6), pages 1-70, June.
    • Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:6:p:70
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    References listed on IDEAS

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    1. Sayma Rahman & P. Junankar & Girijasankar Mallik, 2009. "Factors influencing women's empowerment on microcredit borrowers: a case study in Bangladesh," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 14(3), pages 287-303.
    2. Samuel Erasmus Alnaa & Ferdinand Ahiakpor, 2015. "Synthesis of Microfinance and Technical Efficiency: Implications for Poverty Reduction in Ghana," Research in Applied Economics, Macrothink Institute, vol. 7(1), pages 13-25, March.
    3. Abhijit Banerjee & Esther Duflo & Rachel Glennerster & Cynthia Kinnan, 2015. "The Miracle of Microfinance? Evidence from a Randomized Evaluation," American Economic Journal: Applied Economics, American Economic Association, vol. 7(1), pages 22-53, January.
    4. M. Jahangir Alam Chowdhury & Dipak Ghosh & Robert E. Wright, 2005. "The impact of micro-credit on poverty: evidence from Bangladesh," Progress in Development Studies, , vol. 5(4), pages 298-309, October.
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    Cited by:

    1. Tanni Roy & Md. Emran Hossain & Md. Jahid Ebn Jalal & Jiban Krishna Saha & Eshrat Sharmin & Md. Akhtaruzzaman Khan, 2021. "Effects of credit on national and agricultural GDP, and poverty: a developing country perspective," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.
    2. Djihad Tria & Mukaramah Harun & Mahmudul Alam, 2022. "Microcredit as a strategy for employment creation: A systematic review of literature," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2060552-206, December.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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