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Who Benefits Most from Microfinance in Bangladesh?

Author

Listed:
  • SHAHIDUR R. KHANDKER

    (Senior Research Fellow, International Food Policy Research Institute (IFPRI))

  • M. A. BAQUI KHALILY

    (Institute of Microfinance (InM),)

  • HUSSAIN A. SAMAD

    (World Bank)

Abstract

This paper examines the heterogeneous impacts of microfinance intervention in rural Bangladesh using a long panel survey data expanding from 1991/92 to 2010/11. Heterogeneity in programme effects may arise due to household (such as landholding, head’s education, employment or skills in oral math) and community (electrification and accessibility) characteristics. Benefits do vary by such characteristics. For example, large and medium holders benefit more than marginal or small holders from microfinance in non-land asset, net worth and labour supply. Beneficiary households whose heads completed primary education experience higher gains in non-land asset and net worth than those whose heads did not complete primary education. Also, having adults with competency in oral math (supposedly helpful in augmenting in entrepreneurial skills) helps the households benefit more. Beneficiaries in villages with electricity and better road access benefit more than those in villages lacking electricity or access. Quantile regression estimates show that, with the exception of the effects of male borrowing, lower income households benefit more than higher income ones. Finally, this paper shows that households with older heads or more adult males are likely to drop out from microfinance, so are those with adults with less competency in oral math. However, programme dropouts are not large enough to affect the overall benefits of microfinance.

Suggested Citation

  • Shahidur R. Khandker & M. A. Baqui Khalily & Hussain A. Samad, 2015. "Who Benefits Most from Microfinance in Bangladesh?," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(4), pages 1-30.
    • Handle: RePEc:ris:badest:0788
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    References listed on IDEAS

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    Cited by:

    1. Subrata Saha & Mohammad Jahangir Alam & Al Amin Al Abbasi & Ismat Ara Begum & Maria Fay Rola-Rubzen & Panam Parikh & Andrew M. McKenzie, 2025. "Can credit promote rural transformation? Evidence from district-level data in Bangladesh," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-10, December.

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    More about this item

    Keywords

    Microfinance; Programme Effects; Household Physical Resource Endowments; Entrepreneurial Skills; Com;
    All these keywords.

    JEL classification:

    • D69 - Microeconomics - - Welfare Economics - - - Other
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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