Study of Impact of Micro-Credit on Selected Area with Special Reference to Bangladesh

Author:Md. Shahriar Parveza*, Md. Shakilb

Abstract:
Micro-credit is a part of microfinance, which provides a wider range of financial services, especially savings accounts, to the poor. Modern micro-credit is generally considered to have originated with the Grameen Bank founded in Bangladesh in 1983. Many traditional banks subsequently introduced micro-credit despite initial misgivings. The United Nations declared 2005 as the International Year of Micro- credit. As of 2012, micro credit is widely used in developing countries and is presented as having "enormous potential as a tool for poverty alleviation. This study is based on the data generated through face to face interviews with a country-wide (rural) representative sample of rural micro-borrowers numbering 295 (over 99% female). The field work was conducted during October-November 2013. It has emerged from this study that micro-borrowers have generally remained tied to rudimentary trading, manufacturing and other economic activities regardless of the length of time they have been micro-borrowing. It also appears that micro-credit taken year after year repeatedly is the lifeline for the micro-borrowers to remain in business once they got involved. The study results show that some of the micro-borrowers have benefited in terms of reasonable increases in income but in majority of the cases there has not been a significant increase in income and about a quarter earn from micro-credit related activities and other sources taken together only about or below the average income of the rural poor. The study also shows the socio-economic impact of micro-credit, is marginal. And also observe selected MCIs (Micro Credit Institutions) situation on Bangladesh and their impact on their client.

Keywords:Keywords: Micro-Credit, Socio-economic Impact, Poverty, Deprivation, Microfinance, Village banks.

DOI:

International Journal of Trade & Commerce (Vol: 4 Issue:1)