Why Has Bangladesh Made Success in Microfinance? An Application of Social Relations Model

Abstract

The study investigates the role of microfinance clients, field staffs of Microfinance Institutions (MFIs), and community leaders and their inter-relations as social actors for sustaining microfinance in Bangladesh. A total of 282 representative samples were collected constituting 206 clients, 44 community leaders, and 32 MFI staffs. Along with descriptive statistics, “R package” particularly “fSRM” package of Social Relations Model (SRM) was used for analysis. SRM estimation in two different models depicts mixed results. Estimated variance, covariance, and dyadic reciprocity covariance for clients, staffs, and leaders are found statistically significant in different combination. However, the extent of statistical significance is found highest for staffs, followed by clients and community leaders. This implies that client-staff dyadic relationship is more warmth than that of client-leader and staff-leader dyads. Leaders maintain less warmth relationship than do the clients and staffs as because leaders have comparatively less connection with microfinance program. Despite small sample size of this study, the empirical findings justify the notion that Bangladesh is the success case of microfinance program because of the strong relationship between clients and staffs. The findings might also open a window for adopting Social Relations Model in further microfinance research.