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Placement and outreach of group-based credit organizations

Author

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  • Sharma, Manohar
  • Zeller, Manfred

Abstract

Bangladesh has witnessed major strides in providing financial services to the rural poor. These services are provided largely through innovative group-based credit programs of several nongovernmental organizations. The implicit but widespread assumption has been that they are indeed placed in special poverty-stricken areas. Is this assumption valid? If not, what factors actually affect programs' placement across communities? This paper uses an unique thana-level data set to analyze the placement of three group-based credit programs in Bangladesh. Analysis of branch placement indicates that, unlike commercial banks, nongovernmental institutions do respond to general conditions of poverty. However, it appears that NGO services are located more in poor pockets of relatively well-developed areas than in remoter, less-developed regions. Client density of the established branches, however, did not exhibit such a feature and actually tended to be better in less advantageous locations.

Suggested Citation

  • Sharma, Manohar & Zeller, Manfred, 1999. "Placement and outreach of group-based credit organizations," FCND discussion papers 59, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:fcnddp:59
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    File URL: http://www.ifpri.org/sites/default/files/publications/dp59.pdf
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    References listed on IDEAS

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    1. Khandker, S.R. & Khalily, B. & Khan, Z., 1995. "Grameen Bank: Performance and Sustainability," World Bank - Discussion Papers 306, World Bank.
    2. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    4. Hossain, Mahabub, 1988. "Credit for alleviation of rural poverty: the Grameen Bank in Bangladesh," Research reports 65, International Food Policy Research Institute (IFPRI).
    5. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-318, May.
    6. Sharma, Manohar & Zeller, Manfred, 1997. "Repayment performance in group-based credit programs in Bangladesh: An empirical analysis," World Development, Elsevier, vol. 25(10), pages 1731-1742, October.
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    Cited by:

    1. Dorward, Andrew & Poulton, Colin & Kydd, Jonathan, 2001. "Rural And Farmer Finance: An International Perspective," ADU Working Papers 10924, Imperial College at Wye, Department of Agricultural Sciences.
    2. Maldonado, Jorge Higinio & Gonzalez-Vega, Claudio & Romero, Vivianne, 2003. "The Influence Of Microfinance On The Education Decisions Of Rural Households: Evidence From Bolivia," 2003 Annual meeting, July 27-30, Montreal, Canada 22067, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Hisaki KONO & Kazushi TAKAHASHI, 2010. "Microfinance Revolution: Its Effects, Innovations, And Challenges," The Developing Economies, Institute of Developing Economies, vol. 48(1), pages 15-73.
    4. repec:bla:ausecr:v:49:y:2016:i:4:p:432-452 is not listed on IDEAS
    5. Maldonado, Jorge H. & González-Vega, Claudio, 2008. "Impact of Microfinance on Schooling: Evidence from Poor Rural Households in Bolivia," World Development, Elsevier, vol. 36(11), pages 2440-2455, November.
    6. M. Niaz Asadullah, 2016. "Do Pro-Poor Schools Reach Out to the Poor? Location Choice of BRAC and ROSC Schools in Bangladesh," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(4), pages 432-452, December.
    7. Jorge H. Maldonado & Rocío del Pilar Moreno-Sánchez & romoreno@uniandes.edu.co, 2010. "Estrategias de suavización del consumo y del ingreso de las madres beneficiarias del programa Familias en Acción: un análisis cualitativo," DOCUMENTOS CEDE 007609, UNIVERSIDAD DE LOS ANDES-CEDE.

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