Measuring Impact of Microfinance on Poverty

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ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with the university.

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ABSTRACT

This research study is an attempt to understand the activities of microfinance in the less developed countries and it measures the impact that microfinance has on the economies of the less developed countries. Microfinance is defined as the small scale financial services offered to the poorest populations, often in areas where banking options may be limited or not available at all. Micro Financial Institution can be banks, cooperatives, credit unions, non-governmental organizations (NGOs), or non-bank financial institutions. This research study has adopted a secondary research analysis. The secondary analysis has been conducted in order to meet the research questions and the aims and objectives of this research study. This has provided a clear understanding of the impact that microfinance on the less developed countries and specifically Bangladesh.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1. Background of the Study1

1.2. Introduction2

1.3. Problem Statement3

1.4. Purpose3

1.5. Aim and Objectives3

1.6. Research Questions4

1.7. Time Scale4

1.8. Outline of the Dissertation5

CHAPTER 02: LITERATURE REVIEW6

2.1. Introduction6

2.2. Historical Review6

2.3. Financing Methods7

2.4. Microfinance8

2.5. Development of Microfinance in less Developed Countries12

2.6. Role of Government in Micro Finance13

2.7. Positive Impact of Micro Finance15

2.8. Microfinance: Tool to Combat Poverty16

2.9. Criticism on Microfinance17

2.10. Khushhali Bank and Grameen Bank: A Comparative Study19

CHAPTER 03: METHODOLOGY23

3.1. Introduction23

3.3. Overview of the Secondary Research24

3.4. Advantages and Disadvantages of Secondary Research25

3.10. Treatment of Data28

3.11. Conclusion28

CHAPTER 04: DISCUSSION AND ANALYSIS29

4.1. Introduction29

4.2. Secondary Research Analysis: A Case of Bangladesh29

4.2.1. Microfinance29

4.2.1. Environment in MFI Operate30

4.2.3. Alleviation of 02Poverty31

4.2.4. Self employed and Interventions and Poverty32

4.2.5. Market-led Microfinance35

4.2.6. Subsidy and Sustainability37

4.2.7. The Role of Micro Financial Institution in Education39

4.2.8. The Grameen Bank and the Beginnings of Microfinance40

4.2.9. Micro Financial Institution in Bangladesh42

4.2.10. BRAC43

4.2.11. Grameen Bank44

4.2.12. Other Micro Financial Institution45

CHAPTER 05: CONCLUSIONS47

5.1. Recommendations48

5.1.1. Commercialising Microfinance49

5.2. Drawbacks of Commercialised micro finance50

REFERENCES51

CHAPTER 1: INTRODUCTION

1.1. Background of the Study

The development policy of late 1970s has provided an attractive alternative to micro finance by opening doors to the industry of small entrepreneurs. It has improved the level and quality of financial services for the poor households and small business man. However, in recent years, trend has changed. Micro financiers are finding it difficult to maintain the high rates of repayment. Whilst the micro lenders were the only source of loans at reasonable price ...