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Dynamics of Micro Finance Programs in Poverty Alleviation in Bangladesh: Present Status, Challenges and Policy Actions

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Dynamics of Micro Finance Programs in Poverty Alleviation in Bangladesh: Present Status, Challenges and Policy Actions
Dynamics of Micro Finance Programs in Poverty Alleviation in Bangladesh: Present Status, Challenges and Policy Actions

Md. Mostafizur Rahman Sarder
Deputy General Manager
Research Department
Bangladesh Bank
Head Office
Motijheel,
Dhaka-1000. e-mail: mostafizbb@yahoo.com mostafiz.rahman@bb.org.bd and

Md. Golzare Nabi
Deputy General Manager
Research Department
Bangladesh Bank
Head Office
Motijheel,
Dhaka-1000. e-mail: mdgolzarenabi@yahoo.com golzare.nabi@bb.org.bd Dynamics of Micro Finance Programs in Poverty Alleviation in Bangladesh: Present Status, Challenges and Policy Actions

Md. Mostafizur Rahman Sarder*
Md. Golzare Nabi*

Abstract Microfinance has evolved as a potent driver of financial inclusion in Bangladesh with much positive impact on poverty alleviation and other social development indicators. Despite massive success in terms of outreach, employment generation and empowerment of millions of poor, a large number of low-income poor people have remained excluded from the network of the financial services. The article examines achievements of microfinance industry in Bangladesh, its present challenges and prescribes policy measures to bring more unbanked poor people in the fold of financial services.

Introduction Microfinance has evolved as a potent driver of financial inclusion in Bangladesh with much positive impact on poverty alleviation and other social development indicators. The microfinance industry in Bangladesh started its operations with support from Bangladesh bank and donors’ grants during late 1970s with the objectives of delivering micro financial services among the poor people for poverty alleviation. The industry has evolved from its initial focus on credit, disbursing standardized loan products and collecting obligatory savings to the development of diversified loan, flexible savings and other micro financial products. This sector has now attained maturity and entered into dynamic


References: Ahmed, Salehuddin, 2004: Microcredit and Poverty: New Realities and Strategic Issues in “Attacking Poverty with Microcredit” edited by Salehuddin Ahmed and MA Hakim, UPL, Dhaka. Annual Report, 2004, Bangladesh Bank. Bangladesh Institute of Development Studies (BIDS), 1990, 1999 and 2001: Various Reports on Evaluation of Poverty Alleviation Programmes in Bangladesh, Dhaka. Bangladesh Economic Survey, 2004 & 2005. Consultative Group to Assist the poorest (CGAP) 1999 2001 Conning J, 1999: Outreach, sustainability and leverage in monitored and peer-monitored lending, Journal of Development Economics, Vol-60, No.1, October, 1999. Hashemi, Schuler and Riley, 1996: Rural Credit Programs and Women Empowerment in Bangladesh, World Development Vol-24. Hashemi, 1997: Those left behind: A Note on Targeting the Hardcore Poor in Bangladesh In Geoffrey Wood and Iffath Sharif edited “ Who needs Credit ! Poverty Finance in Bangladesh, UPL, Dhaka 1997. Hossain, M. 1984: “Credit for the Rural Poor, The experience of Grameen Bank in Bangladesh, Research Monograph No. 4, BIDS, Dhaka. Hossain, M. 1988: Credit for Alleviation of Rural poverty: The Grameen Bank in Bangladesh’, Research Report 65, International Food Policy Research Institute, Washington, D.C. Khalily, Imam and Khan: Efficiency and Sustainability of Formal and Quasi-formal Microfinance Programmes - An Analysis of Grameen Bank and ASA, Quarterly Journal of The Bangladesh Development Studies, BIDS, VOL-XXVI, June-Sept. 2000. Khandker, S.R, Khalily, B and Khan, Z. 1995: Credit Program for the Poor; Household and Inter-household Impacts and Program Sustainability by BIDS and the World Bank. Mahmud S, 2004: Microcredit Programme and Women Empowerment in Bangladesh in “Attacking Poverty with Microcredit” edited by Salehuddin Ahmed and MA Hakim, UPL, Dhaka Meyer, Nagarajan and Dunn, 2000 MRA (2010), NGO-MFIs in Bangladesh, Vol. 7, Microcredit Regulatory Authority, Dhaka, Bangladesh. S. R. Osmani (2012): "Asset Accumulation and Poverty Dynamics in Rural Bangladesh: The Role of Microcredit" Working Paper No.11, Institute of Microfinance (InM), Dhaka. Source: Ahmed, Salehuddin, 2004: “Microcredit and Poverty: New Realities and Strategic Issues Annexure-I(B) Source: Ahmed, Salehuddin, 2004: “Microcredit and Poverty: New Realities and Strategic Issues” Annexure-II
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