The Scaling-up of Microfinance in Bangladesh

Determinants, Impact, and Lessons

Author: Hassan Zaman

Publisher: World Bank Publications


Category: Microfinance

Page: 22

View: 6197

"The microfinance industry in Bangladesh currently provides access to credit to around 13 million poor households. Zaman describes the factors that led to the scaling-up of micro-credit in Bangladesh, the impact this has had on the poor, future challenges in Bangladesh, and possible lessons for other countries. The consensus in the literature is that micro-credit plays a significant role in reducing household vulnerability to a number of risks and that it contributes to improving social indicators. The author argues that strategic donor investments in a handful of well-managed institutions that offer a simple, easily replicable financial product could lead to large gains in access to finance for the poor. However, this approach could sacrifice other objectives of financial sector development, such as product and institutional diversity, which could be promoted after the initial expansion has taken place. Governments can also have a crucial role in promoting access to microfinance by ensuring macroeconomic stability, enforcing a simple regulatory structure, and developing communications networks that reduce transaction costs. Another lesson is that while visionary leadership cannot simply be franchised, the internal management systems that led to the scaling-up can be replicated in other settings"--Abstract.

The Theory and Practice of Microcredit

Author: Wahiduddin Mahmud,S. R. Osmani

Publisher: Taylor & Francis

ISBN: 1315413167

Category: Business & Economics

Page: 286

View: 619

The remarkable speed at which microcredit has expanded around the world in the last three decades has piqued the curiosity of practitioners and theorists alike. By developing innovative ways of making credit available to the poor, the idea of microcredit has challenged many traditional assumptions about both poverty reduction strategies and financial markets. While this has encouraged new theorising about how microcredit works, the practice of microcredit has itself evolved, often in unpredictable ways, outpacing the development of theory. The Theory and Practice of Microcredit aims to remedy this imbalance, arguing that a proper understanding of the evolution of practice is essential both for developing theories that are relevant for the real world and for adopting policies that can better realize the full potential of microcredit. By drawing upon their first-hand knowledge of the nature of this evolution in Bangladesh, the birthplace of microcredit, the authors have pushed the frontiers of current knowledge through a rich blend of theoretical and empirical analysis. The book breaks new grounds on a wide range of topics including: the habit-forming nature of credit repayment; the institutional strength and community-based? role of microfinance institutions; the relationships between microcredit and informal credit markets; the pattern of long-term participation in microcredit programmes and the variety of loan use; the scaling up of microenterprises beyond subsistence; the "missing middle" in the credit market; and the prospects of linking micro-entrepreneurship with economic development. The book will be of interest to researchers, development practitioners and university students of Development Economics, Rural Development, or Rural Finance, as well as to public intellectuals.

Ending Poverty in South Asia

Ideas that Work

Author: Deepa Narayan-Parker,Elena E. Glinskaya

Publisher: World Bank Publications

ISBN: 082136877X

Category: Business & Economics

Page: 400

View: 6718

Ending Poverty in South Asia: Ideas that Work is one of the few books on empowerment that combines a conceptual framework with a practical framework and distills the key lessons without suggesting magic bullets. Written by program champions themselves the

Small Loans, Big Dreams

How Nobel Prize Winner Muhammad Yunus and Microfinance are Changing the World

Author: Alex Counts

Publisher: John Wiley & Sons

ISBN: 9780470285275

Category: Business & Economics

Page: 384

View: 4971

Microfinancing is considered one of the most effective strategies in the fight against global poverty. And now, in Small Loans, Big Changes, author Alex Counts reveals how Nobel Prize Winner Muhammad Yunus revolutionized global antipoverty efforts through the development of this approach. This book presents compelling stories of women benefiting from Yunus’s microcredit in rural Bangladesh and urban Chicago, and recounts the experiences of different borrowers in each country, interspersing them with stories of Yunus, his colleagues, and their counterparts in Chicago.

Women's Entrepreneurship and Microfinance

Author: Chiranjib Neogi,Amit Kumar Bhandari,Sudipto Ghosh

Publisher: Springer

ISBN: 9811042683

Category: Business & Economics

Page: 210

View: 5488

This book offers a critical perspective on the issues related to women’s empowerment, microfinance, and entrepreneurship in India. Written by distinguishing experts in this field, this book highlights women’s empowerment, which is a process of entrusting power to an individual on the control over resources and decisions. However, these two factors are less effective in a society where religion and cultural dominance is high. The book sheds light on the social security measures undertaken by the government aiming to the right to work helped women who are bounded by social restrictions. Over time there is a shift in rural occupational structure towards non-farm activities, which is largely distress driven self-employment. Access to credit is a great source to provide self-employment that develops self-esteem among women and uplift their position. The book highlights the discrimination against women entrepreneurs in access to credit led to gender biased entrepreneurial society. Association with self-help groups (SHGs) has made women more socially empowered. SHG members help them to change their life in a positive manner through micro-entrepreneurial activities. The book has emphasized on the role of microfinance, which has served the poor to become financially self-reliant. It is observed that for second generation borrowers, the impact of microfinance seems to fizzle out, where MFIs who are gaining efficiency are diverting their objective of servicing poor, signalling a sign of mission drift.

Increasing Access to Rural Finance in Bangladesh

The Forgotten "missing Middle"

Author: Aurora Ferrari

Publisher: World Bank Publications

ISBN: 082137334X

Category: Political Science

Page: 137

View: 1976

Since the mid-1990s, Bangladesh's banking sector has grown considerably. Despite the boom and the government's efforts to increase access in rural areas, rural financial markets have shrunk in relative terms. As a result, access to finance by micro, small, and medium-size enterprises and marginal, small, and medium-size farmers - the "missing middle" - remains limited, which is significant because these groups are the engines of growth in rural Bangladesh in terms of employment, contribution to GDP, and prospects for future growth.

Microfinance In Asia

Author: Gan Christopher,Nartea Gilbert

Publisher: World Scientific

ISBN: 9813147962

Category: Business & Economics

Page: 392

View: 6042

Lack of credit access is severe in low income and poor families that are normally considered to have fewer opportunities to borrow from banks due to insufficient valuable assets for collateral. These low-income households face limited opportunity to acquire new technology and working capital for agricultural production and thus tend to fall behind. As a result, providing access to finance to low-income rural households has been considered an important component of any rural development strategy. Microfinance programmes, in particular, have been gradually embedded in national strategies of many developing countries as they are poverty-focused. They aim to facilitate the access to financial services such as credit for the poor who are usually disadvantaged in terms of access to conventional financial services from formal financial institutions. The objective of this book is to provide an overview of microfinance programmes in Asia focusing in particular on the determinants of the accessibility of rural households to microcredit. The book studies seven Asian countries such as China, Malaysia, Vietnam, Thailand, the Philippines, Indonesia, and Bangladesh with two specific case studies.

Linking Up and Reaching Out in Bangladesh

Information and Communications Technology for Microfinance

Author: Henry K. Bagazonzya,Zaid Safdar,A.K.M. Abdullah,Cecile Thioro Niang,Aneeka Rahman

Publisher: World Bank Publications

ISBN: 9780821381762

Category: Business & Economics

Page: 146

View: 8177

The microfinance sector in Bangladesh has matured rapidly in the past 30 years and now boasts the largest number of clients in the entire world. Despite these successes, the day-to-day operations of most microcredit institutions in Bangladesh are done manually. The introduction of a centralized information and communications technology (ICT) platform in the microfinance sector will provide further cost savings by streamlining data so that errors, omissions, and duplications (client overlap) are eliminated. Moreover, the introduction of a centralized ICT platform will help to ensure transparency through the standardization of information exchange and accounting mechanisms, increase outreach to rural areas, and integrate the largely informal microfinance sector with the formal financial system. 'Linking Up and Reaching Out in Bangladesh' shows how the establishment of a centralized microfinance platform would revolutionize the country s microfinance sector. This volume will be a useful guide for practitioners, policy makers, and microfinance institutions around the world.

Women And Microcredit In Rural Bangladesh

An Anthropological Study Of Grameen Bank Lending

Author: Aminur Rahman

Publisher: Westview Press

ISBN: 0813339308

Category: Social Science

Page: 200

View: 8715

The first anthropological study of the Grameen Bank microlending program to rural poor women, focused on both economic and social processes to examine and understand grassroots microlending structure and its implications for women borrowers, societal members, bank workers and for the sustainability and growth of lending institutions.

Exploring local perceptions of climate change impact and adaptation in rural Bangladesh

Author: Davis, Peter,Ali, Snigdha

Publisher: Intl Food Policy Res Inst


Category: Social Science

Page: 28

View: 9172

This paper reports on findings from 30 focus group discussions and 30 key informant interviews conducted in 12 districts of Bangladesh in May 2012. The discussions and interviews draw attention to perceptions of climate change and how climate-related trends influence people’s lives, both directly and indirectly. The findings also identify how people adapt to and cope with these changes. This paper aims to improve our understanding of local people’s perceptions of these changes, explore the ways they are affected by them, and how well they are adapting to them. In order for policymakers to plan responses to climate change in Bangladesh, it is essential to understand how people understand and cope with these trends.

Sustainability of Indian Microfinance Institutions

A Mixed Methods Approach

Author: Nadiya Marakkath

Publisher: Springer Science & Business Media

ISBN: 8132216296

Category: Business & Economics

Page: 166

View: 4828

Although 'doing good' is our innate nature, we often get lost in the complexities and view goodness as a distant dream. Making this dream of goodness a reality is often thwarted by thoughts surrounding sustainability. Thus, all good initiatives require a focus on sustainability and this has become one of greatest and most formidable challenges faced by any social enterprise. The book documents the understanding of the sustainability of one of the most celebrated forms of social enterprise of our times — Microfinance Institutions (MFIs) gained through a mixed-methods research investigation. It attempts to answer pertinent questions such as: What are the determinant and discriminating factors for the sustainability of MFIs in India? How are these factors being managed by the operationally efficient Indian MFIs that remained sustainable at reasonable interest rates before the onset of the crisis and ceilings imposition in Indian microfinance markets? What does the Indian microfinance crisis teach us about sustainability management and mismanagement? In a nutshell, the answers show that sustainability is a strategic issue that needs managerial attention and not a matter to be left to serendipity. At a time when the industry is recovering from the adverse effects of a crisis and when there are still contentions as to whether the rate fixed by the regulator is enough for the sustenance of the MFIs, the findings mentioned in the book revive the lost hope for the Indian microfinance industry. By deciphering the strategies used by efficient and sustainable MFIs and discussing the lessons that the crisis has imparted to the Indian microfinance markets, this book will enable Indian MFIs to march towards efficient and sustainable operations without losing focus on their clients.

Improving Access to Finance for India's Rural Poor

Author: Priya Basu

Publisher: World Bank Publications

ISBN: 0821361473

Category: Business & Economics

Page: 119

View: 871

Annotation This book examines the current level and pattern of access to finance for India's rural households, evaluates various approaches for delivering financial services, analyzes what lies behind the lack of adequate financial access, and identifies what it would take to improve access to finance.

The International Bank of Bob

Connecting Our Worlds One $25 Kiva Loan at a Time

Author: Bob Harris

Publisher: Bloomsbury Publishing USA

ISBN: 0802778348

Category: Biography & Autobiography

Page: 304

View: 6845

Hired by to review some of the most luxurious accommodations on Earth, and then inspired by a chance encounter in Dubai with the impoverished workers whose backbreaking jobs create such opulence, Bob Harris had an epiphany: He would turn his own good fortune into an effort to make lives like theirs better. Bob found his way to, the leading portal through which individuals make microloans all over the world: for as little as $25-50, businesses are financed and people are uplifted. Astonishingly, the repayment rate was nearly 99%, so he re-loaned the money to others over and over again. ?After making hundreds of microloans online, Bob wanted to see the results first-hand, and in The International Bank of Bob he travels from Peru and Bosnia to Rwanda and Cambodia, introducing us to some of the most inspiring and enterprising people we've ever met, while illuminating day-to-day life-political and emotional-in much of the world that Americans never see. Told with humor and compassion, The International Bank of Bob brings the world to our doorstep, and makes clear that each of us can, actually, make it better.

Microfinance impact and the MDGs

the challenge of scaling-up

Author: Martin Greeley,University of Sussex. Institute of Development Studies,Centre for the Future State

Publisher: N.A


Category: Microfinance

Page: 16

View: 7533

This paper concerns the potential for microfinance to make a difference in achievement of the Millennium Development Goals. It recognises that microfinance can contribute to several MDGs but that to do so in ways that make a real difference would involve a significant scaling-up of microfinance service provision. Herein lies the challenge. The expansion of developing country microfinance services is increasingly driven by commercial investors who do not usually assess Microfinance Institution (MFI) performance according to MDG criteria. At best, they will use some fairly loose 'social' criteria often borrowed from the corporate social responsibility literature; or they may refer, usually without precision, to a double bottom line of financial and social performance. These have little or nothing to do with achievement of the MDGs. As the empirical material presented makes clear, MFIs that do not deliberately and rigorously target poor households are unlikely to make any difference to MDG attainment. MFIs with a social mission focused on poverty reduction (MDG1) face a genuine difficulty. To expand coverage of poor households, they generally need to seek financial support, usually in the form of loans or equity. Their difficulty is that they face a serious risk of mission drift, concentrating on achieving an outstanding financial performance, which is necessary anyway and especially if they wish to access commercial funds, and neglecting their social mission. In other words, commercial funding may mean less attention to poor households in microfinance service delivery. The challenge for the industry is to manage scaling-up without losing sight of its social purposes. The paper argues for client-level assessment by MFIs that can both ensure that poor households are targeted and that microfinance impact on their poverty status can be monitored. Developing a social performance monitoring system based on client assessment is the principal way in which MFI impact on the MDGs can be established and maintained.

Transforming Bangladesh into a middle income economy

Author: Sadiq Ahmed

Publisher: MacMillan India Ltd.


Category: Business & Economics

Page: 498

View: 8210

Over the past 33 years, rising from the ruins of a war-devastated economy in 1972, Bangladesh has increased its per capita income four-fold, cut poverty by more than half, and is well set to achieve most of the millennium development goals. What factors have helped Bangladesh achieve this remarkable progress with development, thereby confounding the prophets of doom who had dismissed the country as a basket case at the early stage of its independence? What will it take for Bangladesh to consolidate the past gains and strive to reach middle-income status in the next 20 years? This book reveals this story, drawing on the work of a large number of researchers mostly from the World Bank. The book argues that the past gains were secured on the basis of good policies reflected in a stable macroeconomic environment, a gradual but steady improvement in private sector incentives reflected in greater trade and investment openness, and supportive human development policies including a general

Beyond Ending Poverty

The Dynamics of Microfinance in Bangladesh

Author: Shahidur R. Khandker,M.A. Baqui Khalily,Hussain A. Samad

Publisher: World Bank Publications

ISBN: 1464808953

Category: Business & Economics

Page: 280

View: 3290

The recent past has witnessed phenomenal growth in MFIs around the world. Today as many as 200 million people are beneficiaries of microfinance. Given its worldwide attention, microfinance has received serious criticism, including the argument that it is a fad with less-than-expected benefits for the poor. Surely, microfinance is not without any pitfalls. Yet the premise of improving access to financial services for consumption smoothing by the poor has never been a subject of controversy. What has been controversial is whether microfinance can alleviate poverty. That the poor lack an effective and affordable alternative financing mechanism to support income generation does not necessarily mean microfinance is a panacea since it involves entrepreneurial skills, which many poor lack. It is little wonder that studies evaluating the benefits of microfinance have produced conflicting results. Of course, study findings are contextual: They are positive in conducive environments and less so in unfavorable ones. Microfinance must be distinguished from anti-poverty schemes (e.g., conditional cash transfers) because benefits from microfinance-supported activities, which involve participants’ entrepreneurial skills and ability, take time to realize. This book using household long panel survey of 1991/92-2010/11 from Bangladesh addresses some of criticisms—including whether pushing microfinance has made it redundant as a tool for poverty reduction—while investigating whether it still matters for the poor after two decades of extensive growth. The book’s findings confirm the positive effects of continued borrowing from a microfinance program. Despite a manifold increase in microfinance borrowing, loan recovery has not declined and long-term borrowers are not trapped in poverty or debt. Interest rates charged by MFIs are not too high for realizing returns on investment, although the MFIs have scope for lowering them. The book is expected to contribute to the ongoing debate on the cost-effectiveness of microfinance as a tool for inclusive growth and development. It is expected to fill knowledge gaps in understanding the various virtues of microfinance against its portrayal as having drifted from its original poverty-reduction mission.

The Universal Social Safety-Net and the Attack on World Poverty

Pressing Need, Manageable Cost, Practical Possibilities, Favourable Spillovers

Author: Anthony Clunies-Ross,Mozammel Huq

Publisher: Routledge

ISBN: 1134659148

Category: Business & Economics

Page: 202

View: 3031

The book is concerned with strategy and tactics for directing that small slice of world income into filling the gap. This must be done country by country, on the initiative of each country’s government: with the maximum involvement of its own civil society, and with the rich world also making a contribution. To add momentum, the international community needs to adopt targets far more specific than the fifty percent extreme ‘poverty reduction’ of the first Millennium Development Goal.