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Public Sector Microfinance and Rural Wellbeing:Evidence from BRDB

Author

Listed:
  • Ali , Zulfiqar

    (Senior Research Fellow , Bangladesh Institute of Development Studies (BIDS), Dhaka.)

  • Ahmed, Mansur

    (Research Associate, Bangladesh Ins titute of Development Studies (BIDS), Dhaka)

Abstract

The paper looks at the impact of public microfinance on rural wellbeing using primary household survey data with microfinance programmes of the Bangladesh Rural Development Board (BRDB) as the main focus. The paper uses propensity score matching (PSM) technique to evaluate the performance of BRDB’s programme. The result shows that programme households are better-off compared with the control households in terms of per-capita annual earnings and spending and cultivable land holding. However, the impact of BRDB’s microcredit on human capital is weak, as ATTs of spending on health and education, and average years of schooling become statistically insignificant after PSM was performed. The paper constructed composite indexes for human capital, livelihood, non-land asset and women empowerment; and finds that programme households are better-off in terms of all composite indexes except human capital index. Finally, the study looks at the poverty incidence among the programme households and finds that head count poverty rate is 24 per cent among programme households, while the corresponding poverty rate is 35 per cent among control households

Suggested Citation

  • Ali , Zulfiqar & Ahmed, Mansur, 2014. "Public Sector Microfinance and Rural Wellbeing:Evidence from BRDB," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(3), pages 27-49, September.
    • Handle: RePEc:ris:badest:0574
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    References listed on IDEAS

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    2. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    3. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
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    6. Hashemi, Syed M. & Schuler, Sidney Ruth & Riley, Ann P., 1996. "Rural credit programs and women's empowerment in Bangladesh," World Development, Elsevier, vol. 24(4), pages 635-653, April.
    7. Marco Caliendo & Reinhard Hujer & Stephan L. Thomsen, 2008. "The employment effects of job-creation schemes in Germany: A microeconometric evaluation," Advances in Econometrics, in: Modelling and Evaluating Treatment Effects in Econometrics, pages 381-428, Emerald Group Publishing Limited.
    8. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2005. "Individual employment effects of job creation schemes in Germany with respect to sectoral heterogeneity," IAB-Discussion Paper 200513, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Jonathan Morduch, 1998. "Does Microfinance Really Help the Poor? New Evidence from Flagship Programs in Bangladesh," Working Papers 198, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    10. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
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    Cited by:

    1. Hoffmann, Vivian & Rao, Vijayendra & Surendra, Vaishnavi & Datta, Upamanyu, 2021. "Relief from usury: Impact of a self-help group lending program in rural India," Journal of Development Economics, Elsevier, vol. 148(C).
    2. Ahmed, M. & Gautam, M. & Sen, B., 2018. "Waves of Change: Understanding Ascent, Descent and Persistence of Poverty in Rural Bangladesh," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277340, International Association of Agricultural Economists.
    3. Mohammad Shahjahan Chowdhury & Faisal Ahmmed & Md. Ismail Hossain, 2020. "Conditionalities of Public Microfinance and the Rural Poor: Voices From the Below," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(4), pages 526-542, May.

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    More about this item

    Keywords

    Microfinance; Public Sector; wellbeing; Bangladesh;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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