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Library » Microfinance and Poverty: Evidence Using Panel Data from Bangladesh

Microfinance and Poverty: Evidence Using Panel Data from Bangladesh
8 Sep 2005, Khandker, S.

Does microfinance actually reduce poverty?

This paper seeks to answer the question of whether microfinance has a significant impact on poverty levels, both at the individual and village levels. It estimates the impact of microfinance on consumption poverty using panel data from household surveys for 1991/2 and 1998/9.

The author begins by giving a brief background on microfinance in Bangladesh:

Microfinance has largely been successful in Bangladesh both in terms of outreach and low default rates.
Government and donor support has provided capital for on-lending.
Past impact assessments show that microfinance is generally helpful to the poor, but not equally across participants.

He then provides:

The methodology behind data comparison and the importance of choosing the correct comparison data.
A detailed description of the comparison data to give the reader an understanding of the data sample and the changes that occurred over the seven-year time period.
The results of the study to suggest that microfinance does impact poverty both for individual participants (especially women) and the village level, strengthening the local economy.

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Publisher(s):
World Bank