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

Author: Md. Shahriar Parvez, Md.Shakil

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

DOI:

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