Does Microcredit Meet the Needs of all Poor Women? Constraints to Participation Among Desitute Women in Bangladesh

The Bangladesh Rural Advancement Committee (BRAC), together with the World Food Programme of the United Nations (WFP), administers one of the largest microfinance initiatives in the world. Reaching around 450,000 women in each 18-month cycle, the Income Generation for Vulnerable Group Development (IGVGD) programme constitutes a targeted package of food aid, micro-credit, and functional and social awareness training. Each element of the integrated package is considered to be essential and mutually reinforcing, and successful ‘graduation’ has been thought of in terms of progression from one stage of the process to another. However, recent studies have noted that not all women avail themselves of every aspect of the programme, and that only a minority completes the cycle having participated in all components. The current study was designed to explore the factors that determine the extent of participation among eligible beneficiaries; that is: 1) Who does (or does not) take advantage of each and every component of the development package on offer?; 2) What socio-economic factors and personal perceptions favour ‘full’ participation (assuming that this is a goal to which poor women equally subscribe)?; 3) Which elements of IGVGD are most useful to which households?; and, 4) Can participants’ own perceptions of 'successful participation' be incorporated into a redefined programme that more effectively maximises their constrained capacities and opportunities? Building on two prior studies of the prevalence of incomplete programme participation, the present report documents findings from a household survey of 606 IGVGD women who were engaged in the 1998/99 IGVGD cycle. This geographically stratified random sample was drawn from the earlier statistically representative survey of 7,349 women conducted by Sparrey (2001). While this study does not claim to be nationally representative (nor indeed fully representative of project cycles beyond 1998/99), great care was taken to report findings that do reflect actual conditions in the locations surveyed. What is more, while the severe floods of 1998 cannot be ignored (they did cause damage to homes and livelihoods in a number of the locations surveyed), their impact on the 1998/99 cycle should not be exaggerated. Most women report that their decisions and activities were not directly affected or constrained by the floods.