Are Microcredit Participants in Bangladesh Trapped in Poverty and Debt?

This paper addresses whether microcredit participants in Bangladesh are trapped in poverty and debt, as many critics have argued in recent years. Analysis of data from a long panel survey over a 20-year period confirms this is not the case, although numerous participants have been with microcredit p...

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Bibliographische Detailangaben
Hauptverfasser:	Khandker, Shahidur R, Samad, Hussain A
Format:	Buch
Sprache:	eng
Schlagworte:	AMOUNT OF LOAN ASSET HOLDINGS ASSET RATIO ASSET RATIOS ASSET VALUE AVERAGE DEBT BANK LOANS BANK POLICY BANK RATE BENEFICIARIES BIDS BORROWER BORROWING COMMERCIAL BANK COMMERCIAL BANKS CONSUMER GOODS CONSUMPTION EXPENDITURE CREDIT ACCESS CREDIT SCORING CROP PRODUCTION DEBT DEBT SERVICING DEMAND FOR CREDIT DEPOSITS DUE DILIGENCE ECONOMETRIC ANALYSIS ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POLICIES EMPLOYMENT EXPERIMENTAL DESIGN EXTREME POVERTY FARM ACTIVITIES FARM SECTOR FEMALE PARTICIPATION FINANCIAL ASSETS FINANCIAL INSTITUTIONS FOOD BASKET FOOD CONSUMPTION FOOD EXPENDITURE FOOD EXPENDITURES FOOD ITEMS FOOD POLICY FOOD POVERTY FOOD POVERTY LINE GENDER DISPARITY GLOBAL POVERTY GROUP LENDING HOUSEHOLD HEAD HOUSEHOLD INCOME HOUSEHOLD PARTICIPATION HUMAN CAPITAL HUMAN CAPITAL INVESTMENT HUMAN DEVELOPMENT IMPACT EVALUATION INCOME INCOME GENERATION INDEBTED HOUSEHOLDS INDEBTEDNESS INEQUALITY INFORMAL LENDERS INTEREST RATES INTERNATIONAL BANK INTERVENTION LAND ASSET LAND ASSETS LAND VALUE LANDHOLDINGS LEARNING LENDERS LIABILITY LIVING STANDARDS LOAN LOAN AMOUNTS LOAN PORTFOLIO LONGITUDINAL DATA MEAT MICROCREDIT MICROCREDIT PROGRAMS MICROENTERPRISE CREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MILK NONFARM INCOME NUTRITION PENSIONS PER CAPITA INCOME PERFORMANCE INDICATORS POLITICAL ECONOMY POOR POOR HOUSEHOLDS POVERTY ALLEVIATION POVERTY DYNAMICS POVERTY LINE POVERTY RATES POVERTY REDUCTION POVERTY STATUS PROGRAM EFFECTS RATES OF RETURN REDUCTION IN POVERTY REMITTANCES REORGANIZATION RETURNS RURAL RURAL AREAS RURAL COMMUNITIES RURAL CREDIT RURAL DEVELOPMENT RURAL HOUSEHOLDS RURAL POVERTY SAMPLE SIZE SAVINGS SAVINGS ACCOUNT SCHOOL ATTENDANCE SCHOOLING SELECTION BIAS SELF-EMPLOYMENT SOLVENCY STOCKS TOTAL DEBT TRANSACTION TRANSPORT TREATMENT EFFECTS VEGETABLES VILLAGE FUND VILLAGE LEVEL VULNERABLE GROUPS WAGE EMPLOYMENT WAGES WELFARE INDICATOR WELFARE MEASURES
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Beschreibung
Zusammenfassung:	This paper addresses whether microcredit participants in Bangladesh are trapped in poverty and debt, as many critics have argued in recent years. Analysis of data from a long panel survey over a 20-year period confirms this is not the case, although numerous participants have been with microcredit programs for many years. The results of the analysis suggest that participants derive a variety of benefits from microcredit: It helps them to earn income and consume more, accumulate assets, invest in children's schooling, and be lifted out of poverty. This is not to say that non-participants have failed to progress over the same period. Both participants and non-participants have gained as the economy has grown; however, the rates of poverty reduction have been higher for participants. Testing the net effect of microcredit programs requires applying an econometric method that controls for why some households participated and others did not, conditional on their initial characteristics. In addition, the method must control for time-varying, unobserved heterogeneity that affects everyone over time, albeit in possibly different ways. The paper's econometric estimates show significant welfare gains resulting from microcredit participation, especially for women. They also show that the accrued benefits of borrowing outweigh accumulated debt. As a result, households' net worth has increased, and both poverty and the debt-asset ratio have declined.