Research Report on Does Micro-Finance is an Anti Poverty Vaccine for Rural Bangladesh?
Posted on 28th Dec 2024 01:26:00 PM Banking, Finance
ABSTRACT
Bangladesh falls under low income class according to World Bank. It is one of the world's most densely populated countries with 150 million people, almost one third of the population, live below the poverty line and a significant proportion of them live in extreme poverty. The poverty rate is highest in rural areas, at 36 per cent, compared with 28 per cent in urban centers .The population in Bangladesh is predominantly rural, with almost 80 percent of the population living in rural areas. In Bangladesh, microfinance represents an anti-development policy – a development policy that largely works against the establishment of sustainable economic and social development trajectories, and so also against sustainable poverty reduction.
1.1 Introduction
This paper is about one component of the global financial sector– microfinance – that in just thirty years has risen to become one of the most important policy and programme interventions in the international development community. As originally conceived, microfinance is the provision of tiny loans to poor individuals who establisher expand a simple income-generating activity, thereby supposedly facilitating their eventual escape from poverty. Its advocates claim that microfinance has been critical to the fate of the poor in many developing countries, creating jobs and raising incomes in the poorest communities, helping to empower the poor (especially women), and generally kick-starting a ‘bottom-up’ economic and social development process. The person most associated with the ‘discovery’ of microfinance in the 1970s is the Bangladeshi economist and 2006 Nobel Peace Prize co-recipient, Dr Muhammad Yunus. With his vision of rapid and affordable poverty reduction being achieved through microfinance, Yunus was able to convince virtually everyone in the international development community to support his efforts. Indeed, the next generation, he famously said in the 1980s, would be able to understand the concept of poverty only after having visited a ‘poverty museum’. Here, surely, was the poverty reduction concept that all developing countries had been waiting for. The central argument that I will develop in this paper, however, is that microfinance is largely antagonistic to sustainable economic and social development, and so also to sustainable poverty reduction. Put simply, microfinance does not work. I fully accept that there are some minor benefits to be derived from the widespread provision of microfinance to the poor.
1.2 Need of the Study
- The rural Bangladesh requires sources of finance for poverty alleviation, procurement of agricultural and farms input.
- Does Micro finance is a programme to support the poor rural people to pay its debt and maintain social and economic status in the villages?
- As we know that Bangladesh is agriculture based economy so microfinance may be a tools to empower the farmers and rural peoples to make agriculture profitable.
- For finding out the scopes of microfinance in rural Bangladesh. This research paper is highlighting a picture of rural Bangladesh as a profitable segment for ongoing microfinance institutions or not.
1.3 Objective of the Study
- To study the importance and role of microfinance in poverty alleviation.
1.4 Research Methodology
The review is primarily based on secondary and published information. The major sources of information are published research reports and papers, unpublished reports from reputable organizations, data from major institutions such as PKSF, InM, Microcredit Regulatory Authority (MRA), Grameen Bank, BRAC, ASA, some smaller but growing microfinance institutions, network agencies such as Credit and Development Forum (CDF), several international non-governmental organizations (NGOs) operating in the country, commercial banks, Bangladesh Bank (Central Bank),World Bank etc.
ACRONYMS
BDP Banco de Desarrollo Productivo (SME development bank)
CCT Conditional Cash Transfer
CGAP Consultative Group to Assist the Poor
DFID Department for International Development
FDI Foreign Direct Investment
HIID Harvard Institute for International Development
IFC International Finance Corporation
ILO International Labour Organization
IPO Initial Public Offering
MFI Microfinance Institution
MNC Multinational Corporation
SHG Self-Help Group
SME Small and Medium-Sized Enterprise
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TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Introduction
1.2 Need of the study
1.3 Objective of the study
1.4 Research methodology
CHAPTER TWO: THE RISE OF MICROFINANCE
2.1 The rise of microfinance
CHAPTER THREE: THE ILLUSION OF POVERTY REDUCTION IN BANGLADESH
3.1 The basic myths and realities behind the microfinance model
3.2 Myths behind realities the ‘new wave’ microfinance model
CHAPTER FOUR: POLITICS BEHIND MICROFINANCE
4.1 Bringing capitalism to the poor to make capitalism safe for the rich
4.2 Microfinance is local neoliberals
Conclusion and Findings
Bibliography
Research, Report, Micro-Finance, Anti, Poverty, Vaccine, Rural, Bangladesh, BDP, CCT, CGAP, DFID, FDI, HIID, IFC, ILO, IPO, MFI, MNC, SHG, SME