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Does Microfinance Reduce Poverty in Bangladesh? New Evidence from Household Panel Data

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  • Katsushi S. Imai
  • MD. Shafiul Azam

Abstract

The study examines whether loans from microfinance institutions (MFI) reduce poverty in Bangladesh drawing upon the nationally representative household panel with four rounds from 1997 to 2004. The effects of general microfinance loans and loans for productive purposes on income, food consumption and women's Body Mass Index are estimated. Overall effects of MFI loans on income and food consumption were positive and the purpose of the loan is important in predicting which household welfare indicator is improved. Alternative estimation methods confirm a positive impact of MFI loans on food consumption growth, which supports the poverty reducing effects of microfinance in Bangladesh.

Suggested Citation

  • Katsushi S. Imai & MD. Shafiul Azam, 2011. "Does Microfinance Reduce Poverty in Bangladesh? New Evidence from Household Panel Data," Journal of Development Studies, Taylor & Francis Journals, vol. 48(5), pages 633-653, October.
  • Handle: RePEc:taf:jdevst:v:48:y:2012:i:5:p:633-653
    DOI: 10.1080/00220388.2012.661853
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    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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