rural developmet through microcredit development
Table of Contents
SUMMARY 2
INTRODUCTION 4
BACKGROUND 5
Definition of Rural Development 6 Definition of Micro-credit 7
Microcredit programs in Bangladesh 8
CAPITAL MARKETS AND THE POOR 9
The neo-liberal response - walking barefoot where bankers fear to tread 11
Licensing Status of the NGO-MFIs in Bangladesh 13
Impact of micro-credit 14
Development as economic growth and equity 15
Role of the Government and the NGOs 16
Steps for Rural Development 19
The Limitations of Micro Credit as a Rural Development 20
Assessing the success of micro credit as rural development 22
Conclusion 23
Summary
This assignment takes issue with claims made by range of development agencies and practitioners that micro credit is, or could be, a panacea for rural development. Three options for the provision of micro credit to the rural poor are presented. In some developing countries the state has provided micro credit. These schemes have frequently collapsed because they were often motivated by political, rather than financial considerations. Over the last few decades, neo-liberal theorists have re-examined the role of the much-maligned money lender. They have argued that the ostensibly exorbitant rates of interest charged, are actually legitimate reflections of the opportunity cost of the loans. They suggest that the work of the money lender be facilitated through the removal of legislative and other restrictions. In recent years innovative Development Finance Institutions (DFIs) have begun to provide micro loans to the rural poor. They have introduced a range of novel mechanisms to provide micro credit. Although there is variety in the workings of the DFIs, they commonly: supervise their loan recipients intensively; lend to groups who are jointly and severally
SUMMARY 2
INTRODUCTION 4
BACKGROUND 5
Definition of Rural Development 6 Definition of Micro-credit 7
Microcredit programs in Bangladesh 8
CAPITAL MARKETS AND THE POOR 9
The neo-liberal response - walking barefoot where bankers fear to tread 11
Licensing Status of the NGO-MFIs in Bangladesh 13
Impact of micro-credit 14
Development as economic growth and equity 15
Role of the Government and the NGOs 16
Steps for Rural Development 19
The Limitations of Micro Credit as a Rural Development 20
Assessing the success of micro credit as rural development 22
Conclusion 23
Summary
This assignment takes issue with claims made by range of development agencies and practitioners that micro credit is, or could be, a panacea for rural development. Three options for the provision of micro credit to the rural poor are presented. In some developing countries the state has provided micro credit. These schemes have frequently collapsed because they were often motivated by political, rather than financial considerations. Over the last few decades, neo-liberal theorists have re-examined the role of the much-maligned money lender. They have argued that the ostensibly exorbitant rates of interest charged, are actually legitimate reflections of the opportunity cost of the loans. They suggest that the work of the money lender be facilitated through the removal of legislative and other restrictions. In recent years innovative Development Finance Institutions (DFIs) have begun to provide micro loans to the rural poor. They have introduced a range of novel mechanisms to provide micro credit. Although there is variety in the workings of the DFIs, they commonly: supervise their loan recipients intensively; lend to groups who are jointly and severally
Bibliography: Hulme, David and Paul Mosley. Finance Against Poverty. Routledge, London, 1996. Khandker, Shahidur R. Fighting Poverty with Microcredit. Bangladesh edition, The University Press Ltd, Dhaka, 1999. Ledgerwood, Joanna. Microfinance Handbook. Washington, D.C., World Bank, 1998. ASA, Dhaka, 1995. Todd, Helen Women at the Center: Grameen Borrowers After One Decade. University Press Ltd, Dhaka, 1996. University Press Ltd., Dhaka, 1997. Yunus Muhammad, Moingeon Bertrand & Laurence Lehmann-Ortega, "Building Social Business Models: Lessons from the Grameen Experience”, April-June, vol 43, n° 2-3, Long Range Planning, 2010, p Public Affairs, 2003. ^ Microfinance Information Exchange, Inc. (2009-12-01). "MicroBanking Bulletin Issue #19, December, 2009, pp