Download or read book Productivity and Efficiency Challenges of Microcredit Program in Bangladesh written by Md. Mahmudul Alam and published by Centre for Research and Publication at International Islamic University Chittagong (IIUC). This book was released on 2013-01-01 with total page 93 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is no denying the fact that microcredit (MC) has been playing an important role in the movement for poverty alleviation. But by the same breath it is also a hard fact that it has serious limitations in terms of its delivery system, rules of repayment, interest rate charges, etc. These limitations made it largely fail to realize its potential and expected goals. A credible study on the productivity of MC was required to determine its actual interest/profit paying capability. In the absence of any established economic justification, based on productivity, this exorbitantly high interest rate is found morally untenable and has become the primary target of criticism for its minimal or marginal achievements. As a result, recently the government rightfully fixed 27% as the maximum interest rate chargeable for microcredit (with effect from July 2011). However, we need not undermine the importance and efforts of the microcredit movement, both as an economic as well as a social institution, for the betterment of the poor in the society. We need not be selfish and miser to give the movement its due credit. MC should not be summarily viewed as unuseful and unsuccessful. It has been making some contributions to the betterment of the poor and it should be given the appreciation it deserves. But like many other researchers we are troubled by the contradicting attitudes of the microcredit providers toward the borrowers. In one hand they are concerned and committed to pull the poor out of poverty, on the other hand they are so harsh in the timely payment of repayment installments putting a blind eye to the sufferings of these poor borrowers. Therefore, MCIs need to be more innovative to be able to serve and take care of the wellbeing of the critical group among the borrowers. We are also puzzled to see that in spite of the exorbitantly high interest rate charges and all other limitations, increasing number of these poor are borrowing credit from these MCIs. This surgical study on the inside view of microcredit in Bangladesh, using a rich data set developed through a survey of 555 sample borrowers from rural, semi-urban, and urban areas of all 7 administrative divisions of Bangladesh, is an effort to address these issues and find answers to these and other questions like its potentiality to become a growth tool in the third sector economy. To our own best assessment this study made three major contributions to microcredit literature: a) application of economic-profit counting method in economic productivity analysis, b) identification of the critically vulnerable group among the borrowers; and c) the revelation that microcredit is respected by the borrowers more as a social than economic institution. To them, microcredit has facilitated their social and political empowerments and safeguarded their social status. An additional feature of this monograph is that it includes a chapter reflecting on the status of Islamic microcredit in the country. We are thankful to the sample micro borrowers for their sincere cooperation and responses in the operation of this research. We are equally thankful to the field investigators for their honest and untiring search for information. We are thankful to Professor Dr. Abu Bakr Rafique Ahmed, Pro Vice-Chancellor of International Islamic University Chittagong, Bangladesh for his most valuable suggestion to include in the book a separate chapter on Islamic microfinance. This chapter has certainly enhanced the focus of the monograph. Lastly we are grateful to Professor Dr. Anisuzzaman Chowdhury of University of Western Sydney, Australia, and Senior Economic Affairs Officer, Department of Economic and Social Affairs, United Nations, New York, for writing a thoughtful foreword to this work.

Download or read book Productivity and Efficiency Challenges of Microcredit Program in Bangladesh written by Md. Mahmudul Alam and published by . This book was released on 2017 with total page 93 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study by Md. Mahmudul Alam and Professor Rafiqul Islam Molla on microfinance comes at the right time when the microfinance movement has come under attack from various quarters. There are exaggerated claims and counter-claims about microfinance's impact on poverty alleviation - one side claims to send poverty to the museum, the other claims that it causes and perpetuates poverty. The only way to resolve the issue is rigorous research.

Download or read book Productivity and Efficiency Challenges of Microcredit Program in Bangladesh written by Mahmudul Alam and published by . This book was released on 2013 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Inside Story of Microcredit in Bangladesh An Empirical Investigation of the Role and Productivity written by Md. Mahmudul Alam and published by LAP Lambert Academic Publishing. This book was released on 2011-01-01 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is no denying the fact that microcredit (MC) has been playing an important role in the movement for poverty alleviation. But by the same breath it is also a hard fact that it has serious limitations in terms of its delivery system, rules of repayment, interest rate charges, etc. These limitations made it largely fail to realize its potential and expected goals. A credible study on the productivity of MC was required to determine its actual interest paying capability. In the absence of any established economic justification, based on productivity, this exorbitantly high interest rate is found morally untenable and has become the primary target of criticism for its minimal or marginal achievements. As a result, recently the government rightfully fixed 27% as the maximum interest rate chargeable for microcredit (with effect from July 2011). However, we need not undermine the importance and efforts of the microcredit movement, both as an economic as well as a social institution, for the betterment of the poor in the society. We need not be selfish and miser to give the movement its due credit. MC should not be summarily viewed as unuseful and unsuccessful. It has been making some contributions to the betterment of the poor and it should be given the appreciation it deserves. But like many other researchers we are troubled by the contradicting attitudes of the microcredit providers toward the borrowers. In one hand they are concerned and committed to pull the poor out of poverty, on the other hand they are so harsh in the timely payment of repayment installments putting a blind eye to the sufferings of these poor borrowers. Therefore, MCs need to be more innovative to be able to serve and take care of the wellbeing of the critical group among the borrowers. We are also puzzled to see that in spite of the exorbitantly high interest rate charges and all other limitations, increasing number of these poor are borrowing credit from these MCIs. This surgical study on the inside story of microcredit in Bangladesh, using a rich data set developed through a survey of 555 sample borrowers from rural, semi-urban, and urban areas of all 7 administrative divisions of Bangladesh, is an effort to address these issues and find answers to these and other issues like its potentiality to become a growth tool in the third sector economy. To our own best assessment this study made three major contributions to MC literature: a) application of economic-profit counting method in economic productivity analysis, b) identification of the critically vulnerable group among the borrowers; and c) the revelation that MC is respected by the borrowers more as a social than economic institution. To them, microcredit has facilitated their social and political empowerments and safeguarded their social status. We are thankful to the sample micro borrowers for their sincere cooperation and responses in the operation of this research. We are equally thankful to the field investigators for their honest and untiring search for information. Lastly we are grateful to Professor Anisuzzaman Chowdhury of University of Western Sydney, Australia, and Senior Economic Affairs Officer, Department of Economic and Social Affairs, United Nations, New York, for writing a thoughtful foreword to this work.

Download or read book The Scaling up of Microfinance in Bangladesh written by Hassan Zaman and published by World Bank Publications. This book was released on 2004 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: "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.

Download or read book Performance and Governance Challenges of a Government funded Microcredit Program for the Handloom Weavers in Bangladesh written by Tania Parvin and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Micro politics of Microcredit written by Mohammad Jasim Uddin and published by Routledge. This book was released on 2015-05-01 with total page 244 pages. Available in PDF, EPUB and Kindle. Book excerpt: Microcredit has been seen in recent decades as having great potential for aiding development in poor developing countries, with Bangladesh being one of the countries which has pioneered microcredit and implemented it most widely. This book, based on extensive original research, explores how microcredit works in practice, and assesses its effectiveness. It discusses how microcredit, usually channelled through women, is often passed to the men of the family, a practice disapproved of by some, but regarded as acceptable by borrowers who have a communal approach to debt, rather than viewing debt as something held by single individuals. The book demonstrates how the rules around microcredit are often seem as irksome by the borrowers, how lenders often charge high rates of interest and work primarily to preserve their institutions, thereby going against the spirit of the microcredit movement, and how borrowers often end up on a downward spiral, deeper and deeper in debt. Overall, the book argues that although microcredit does much good, it also has many drawbacks.

Download or read book Microfinance in Developing Countries written by J. Gueyie and published by Springer. This book was released on 2013-01-17 with total page 357 pages. Available in PDF, EPUB and Kindle. Book excerpt: Microfinance in developing countries is a collection of studies by leading researchers in the field of microfinance. It discusses key issues that the rapidly growing microfinance industry currently faces, and offers interesting views and analysis of topical matters concerning the microfinance realm.

Download or read book Microcredit and Poverty Alleviation written by Tazul Islam and published by Routledge. This book was released on 2016-04-22 with total page 229 pages. Available in PDF, EPUB and Kindle. Book excerpt: The attempt of the Grameen Bank to alleviate poverty and enhance the skills and productivity of its rural women clients provides the fascinating backdrop to this important study of micro-credit institutions. Tazul Islam examines the real extent to which the Grameen Bank's credit-alone policy has been successful in securing the Bank's financial sustainability; its practical role in alleviating poverty and its actual impact on the productivity of its clients. This book concludes by considering alternative policy options that hold out the possibility of increased poverty alleviation.

Download or read book Microcredit and Women s Empowerment written by Aminul Faraizi and published by Routledge. This book was released on 2014-04-04 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a case study of Bangladesh, and based on a long term participatory observation method, this book investigates claims of the success of microcredit, as well as the critiques of it, in the context of women’s empowerment. It confronts the distinction between women’s increasing wealth as a consequence of the success of microcredit programmes and their apparent non-commensurate empowerment, looking at two organisations (the Grameen Bank and the Bangladesh Rural Advancement Committee) as they operate in two localities in rural Bangladesh, in order to discover how enrichment and empowerment are often confused. The book goes on to establish that the well-publicised success stories of the microcredit programme are blown out of proportion, and that the dynamics of collective responsibility for repayment of loans by a group of women borrowers – usually seen to be a tool for the success of microcredit – is in fact no less repressive than traditional debt collectors. This book makes a contribution to development debates; challenging adherents to more closely specify those conditions under which microcredit does indeed have validity, as well as providing insights relevant to South Asian Studies and Development Studies.

Download or read book Beyond Ending Poverty written by Shahidur R. Khandker and published by World Bank Publications. This book was released on 2016-07-20 with total page 336 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Fighting Poverty with Microcredit written by Shahidur R. Khandker and published by Oxford University Press, USA. This book was released on 1998 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: With increasing assistance from the World Bank and other donors, microfinance is emerging as an instrument for reducing poverty and improving the poor's access to financial services in low-income countries. Providing the poor with access to financial services is one of many ways to help increase their incomes and productivity. In many countries, however, traditional financial institutions have failed to provide this service. Microcredit and cooperative programs fill this gap. They provide credit through social mechanisms such as group-based lending to reach the poor and other clients, including women, who lack access to formal financial institutions. Their purpose is to help the poor become self-employed and thus escape poverty. This book examines the experiences of the Grameen Bank, the Bangladesh Rural Advancement Committee, and the Bangladesh Rural Development Board's Rural Development Project-12 in order to quantify the potential and limitations of microcredit programs as an instrument for reducing poverty and delivering financial services to the poor. A copublication of the World Bank and Oxford University Press.

Download or read book Micro credit and Household Productivity written by Emily W. Kerr and published by . This book was released on 2009 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper tests the effect of micro-credit on household productivity to determine whether micro-credit programs facilitate productivity gains through skills transfer and human capital formation in addition to the provision of credit. The data come from two rounds of household surveys in rural Bangladesh conducted by the World Bank and the Bangladesh Institute of Development Studies to analyze the impact of three micro-credit programs: the Rural Development-12 program of the Bangladesh Rural Development Board, the Bangladesh Rural Advancement Committee, and Grameen Bank. Controlling for macro events and household and village characteristics, I find that participating in a micro-credit program increases output per unit labor for household non-farm enterprises in a large and statistically significant way. These increases in productivity can provide the means for sustained improvements in standard of living and contribute to the economic growth of low-income countries.

Download or read book Dilemmas and Challenges in Islamic Finance written by Yasushi Suzuki and published by Routledge. This book was released on 2018-03-09 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The phenomenal growth of Islamic finance in the last few decades has been accompanied by a host of interesting questions and challenges. One of the critical challenges is how Islamic financial institutions can be motivated to participate in the 'equity-like' profit-and-loss sharing (PLS) contracts. It is observed that Islamic banks are reluctant to participate in the pure PLS scheme which is manifested by the rising concentration of investment on murabaha or mark-up financing. This phenomenon has been the hotbed of academic criticism on the contemporary practice of Islamic banking. This book explains the 'murabaha syndrome' in light of the incentive provided by the current institutional framework and what are the changes required in the governance structure to mend this anomaly.

Download or read book Microfinance Institutions written by R. Mersland and published by Springer. This book was released on 2015-12-11 with total page 329 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on MFI performance is still in its infancy. MFIs are hybrid organizations with dual objectives. Performance studies in microfinance are therefore less straightforward compared to performance studies in traditional banking research. This book contains new MFI performance research by top scholars from across the globe.

Download or read book Does Access to Microcredit Lead to Agricultural Productivity Gains written by Justin Charles Wiltshire and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: I analyze data from a 1991--92 field survey of rural Bangladeshi households to determine the effect of access to microcredit on agricultural productivity in rural areas. I argue that rural farmers with access to microcredit should only realize productivity gains if they are credit-constrained. I find that, relative to people who had no opportunity to join a microcredit program, access to a microcredit program does not lead to direct productivity gains for farmers of either transplanted Aman rice or a high-yield variety of Aman rice. Only access to a Grameen Bank microcredit program is associated with a lower cost of sharecropping--defined as the share kept by the landlord multiplied by the sharecropped proportion of the total land cultivated by the farmer--while access to BRAC (previously the Bangladesh Rural Advancement Committee) and Bangladeshi Rural Development Board programs are not. Only access to a Grameen program leads to significant productivity gains when considered jointly with a reduction in sharecropping-costs. The results suggest that access to microcredit does not lead to direct improvements in agricultural productivity.

Download or read book Commercialization of Microfinance Bangladesh written by Stephanie Charitonenko and published by . This book was released on 2002 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzing the progress toward commercialization made in Bangladesh's relatively developed and competitive microfinance industry, this report explores the challenges and implications for various types of stakeholders. Recommendations for positive approaches to improve commercialization of microfinance while preserving the social objectives of microfinance institutions are covered in detail.