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Impact of Microcredit on Second Generation Borrowers in Bangladesh: Revisited

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  • Laila Arjuman Ara
  • Mohammad Masudur Rahman
  • Chanwahn Kim

Abstract

This article investigates the economic impact of continuing borrowers’ participation in the microcredit programme on poverty eradication in Bangladesh. A panel data set was collected through a field survey for the years 2013–2016 to identify the impact of a microcredit programme on continuous participation borrowers. The propensity score matching (PSM) method is used to eliminate selection bias and the difference-in-difference (DID) model is applied for the empirical analysis. The findings of the study demonstrate that more benefits are realized from continued participants compared to discontinued participants. JEL: C83, D14, G21, O12

Suggested Citation

  • Laila Arjuman Ara & Mohammad Masudur Rahman & Chanwahn Kim, 2020. "Impact of Microcredit on Second Generation Borrowers in Bangladesh: Revisited," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 21(1), pages 142-157, March.
    • Handle: RePEc:sae:soueco:v:21:y:2020:i:1:p:142-157
    DOI: 10.1177/1391561420908086
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    References listed on IDEAS

    as
    1. Asadul Islam, 2011. "Medium- and Long-Term Participation in Microcredit: An Evaluation Using a New Panel Dataset from Bangladesh," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 843-862.
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    5. Mazumder, Mohummed Shofi Ullah & Lu, Wencong, 2015. "What Impact Does Microfinance Have on Rural Livelihood? A Comparison of Governmental and Non-Governmental Microfinance Programs in Bangladesh," World Development, Elsevier, vol. 68(C), pages 336-354.
    6. Khandker, Shahidur R. & Samad, Hussain A., 2014. "Microfinance Growth and Poverty Reduction in Bangladesh: What Does the Longitudinal Data Say?," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(1-2), pages 127-157, March-Jun.
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    More about this item

    Keywords

    Continuous participation; microcredit; poverty; Bangladesh; propensity score matching (PSM); difference-in-difference (DID);
    All these keywords.

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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