Abstract
The study was conducted to find out what significant socioeconomic impact and how microfinance programs play the key role on the development of Bangladesh. To observe that we tried to find out in which way it is playing its role and what kind of socioeconomic impacts are related with microeconomic programs. Microfinance programs are providing a significant role in the development of Bangladesh by providing financial assistance to the lower income but self-employed people. They have turned into employed by getting the financial support from the different institutions especially from Grameen Bank, BRAC etc. 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 (MPC) 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. It plays a role in eradicating poverty, promoting education, improving health and empowering women.
Highlights
Schreiner and Colombet (2001, p.339) define microfinance as “the attempt to improve access to small deposits and small loans for poor households neglected by banks.” microfinance involves the provision of financial services such as savings, loans and insurance to poor people living in both urban and rural settings who are unable to obtain such services from the formal financial sector
The Microcredit Regulatory Authority (MRA) has classified of these 425 Non-Government Organizations (NGOs)-Microfinance Institutes (MFIs) and their market share by categorizing as very small, small, medium, large, and very large on the basis of their number of borrowers, which are presented by the table
Yunus‟s Grameen Model is one of the best ways to transfer the microfinance services into a social mechanism system which streamline the poor people into the socioeconomic development of the country and which are the reflections of today‟s Bangladesh in the world
Summary
Schreiner and Colombet (2001, p.339) define microfinance as “the attempt to improve access to small deposits and small loans for poor households neglected by banks.” microfinance involves the provision of financial services such as savings, loans and insurance to poor people living in both urban and rural settings who are unable to obtain such services from the formal financial sector. By addressing this gap in the market in a financially sustainable manner, an MFI can become part of the formal financial system of a country and so can access capital markets to fund their lending portfolios, allowing them to dramatically increase the number of poor people they can reach (Otero, 1999) Commentators such as Littlefield, Murduch and Hashemi (2003), Simanowitz and Brody (2004) and the IMF (2005) have commented on the critical role of microfinance in achieving the Millennium Development Goals (MDG). The secondary information was collected from different past files, which were collected from personal visit of the company files
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