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Impact of Micro Finance Activities on the Economic Development of Bangladesh

Received: 20 January 2016     Accepted: 21 January 2016     Published: 4 February 2016
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Abstract

The study was conducted to find out how microfinance plays the pivotal role and what significant impact on the development of Bangladesh. To observe that we tried to find out in which way it is playing its role and what type of key economic development indicators are related with it. Microfinance is providing a significant role in the development of Bangladesh by providing financial assistance to the lower income but self-employed people. Once most of these people were remained unemployed but by getting the financial support from the different institutions especially from Grameen Bank and other similar NGOs like BRAC they have turned into employed. The poverty level has minimized a lot from the rural area and household income increase by around one-third. Wages and marginal propensity to consumption increased especially for women and it creates positive impact on children's schooling: A 1.05% increase in Grameen Bank female borrowers increases the probability of school enrollment by 1.8% for girls and 1.99% for boys. Microfinance also contributed to smoothening consumption level and reducing vulnerability of life of people.

Published in International Journal of Finance and Banking Research (Volume 2, Issue 1)
DOI 10.11648/j.ijfbr.20160201.11
Page(s) 1-6
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

GDP, lDFID, MFI, Micro Finance, Economic Development

References
[1] Alamgir, D. A. H. 1999. Micro financial Services in Bangladesh: Review of Innovations and Trends. Dhaka: Credit and Development Forum.
[2] Asian Development Bank (ADB). 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grant to the People’s Republic of Bangladesh for the Rural Livelihood Project. Manila: ADB.
[3] Berenbach, S., and C. Churchill. 1997. Regulation and Supervision of Microfinance Institutions: Experience from Latin America, Asia, and Africa. The Microfinance Network (MFN) Occasional Paper No. 1. Washington, D.C.: MFN.
[4] Carpenter, J. 1997. Bangladesh. In Regulation and Supervision of Microfinance Institutions. The Microfinance Network (MFN) Occasional Paper No. 2, edited by Craig Churchill.
[5] Choudhury, S. H. 2002. Comments taken from May 2002 interview with S. Charitonenko and S. M. Rahman.
[6] Christen, R. P. 2000. Commercialization and Mission Drift: The Transformation of Microfinance in Latin America. Occasional Paper No. 5, Washington, D. C.: Consultative Group to Assist the Poorest.
[7] Cracknell, D. 2000. Microfinance Regulation in Bangladesh – A Long Path to Progress. Small Enterprise Development 11(4). London: ITDG Publishing. Credit and Development Forum (CDF). 2001a. CDF Statistics (June 2001 draft). Dhaka: CDF.
[8] Fleisig, H. 1996. Secured Transactions: The Power of Collateral. Finance and Development 33(2): 44–46.
[9] Goodwin-Groen, R. 1998. The Role of Commercial Banks in Microfinance. Brisbane: Foundation for Development Cooperation.
[10] Grameen Bank. 2011. Annual Report 2011. Dhaka: Grameen Bank.
[11] Hashemi, S. 1997. Those Left Behind: A Note on Targeting the Hardcore Poor. In Who Need Credit?
Cite This Article
  • APA Style

    Md Sazzadur Rahman Khan, Rezaul Karim. (2016). Impact of Micro Finance Activities on the Economic Development of Bangladesh. International Journal of Finance and Banking Research, 2(1), 1-6. https://doi.org/10.11648/j.ijfbr.20160201.11

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    ACS Style

    Md Sazzadur Rahman Khan; Rezaul Karim. Impact of Micro Finance Activities on the Economic Development of Bangladesh. Int. J. Finance Bank. Res. 2016, 2(1), 1-6. doi: 10.11648/j.ijfbr.20160201.11

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    AMA Style

    Md Sazzadur Rahman Khan, Rezaul Karim. Impact of Micro Finance Activities on the Economic Development of Bangladesh. Int J Finance Bank Res. 2016;2(1):1-6. doi: 10.11648/j.ijfbr.20160201.11

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  • @article{10.11648/j.ijfbr.20160201.11,
      author = {Md Sazzadur Rahman Khan and Rezaul Karim},
      title = {Impact of Micro Finance Activities on the Economic Development of Bangladesh},
      journal = {International Journal of Finance and Banking Research},
      volume = {2},
      number = {1},
      pages = {1-6},
      doi = {10.11648/j.ijfbr.20160201.11},
      url = {https://doi.org/10.11648/j.ijfbr.20160201.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160201.11},
      abstract = {The study was conducted to find out how microfinance plays the pivotal role and what significant impact on the development of Bangladesh. To observe that we tried to find out in which way it is playing its role and what type of key economic development indicators are related with it. Microfinance is providing a significant role in the development of Bangladesh by providing financial assistance to the lower income but self-employed people. Once most of these people were remained unemployed but by getting the financial support from the different institutions especially from Grameen Bank and other similar NGOs like BRAC they have turned into employed. The poverty level has minimized a lot from the rural area and household income increase by around one-third. Wages and marginal propensity to consumption increased especially for women and it creates positive impact on children's schooling: A 1.05% increase in Grameen Bank female borrowers increases the probability of school enrollment by 1.8% for girls and 1.99% for boys. Microfinance also contributed to smoothening consumption level and reducing vulnerability of life of people.},
     year = {2016}
    }
    

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    AB  - The study was conducted to find out how microfinance plays the pivotal role and what significant impact on the development of Bangladesh. To observe that we tried to find out in which way it is playing its role and what type of key economic development indicators are related with it. Microfinance is providing a significant role in the development of Bangladesh by providing financial assistance to the lower income but self-employed people. Once most of these people were remained unemployed but by getting the financial support from the different institutions especially from Grameen Bank and other similar NGOs like BRAC they have turned into employed. The poverty level has minimized a lot from the rural area and household income increase by around one-third. Wages and marginal propensity to consumption increased especially for women and it creates positive impact on children's schooling: A 1.05% increase in Grameen Bank female borrowers increases the probability of school enrollment by 1.8% for girls and 1.99% for boys. Microfinance also contributed to smoothening consumption level and reducing vulnerability of life of people.
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Author Information
  • Department of Business Administration, Stamford University Bangladesh, Dhaka, Bangladesh

  • Department of Business Administration, Atish Dipankar University of Science and Technology, Dhaka, Bangladesh

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