Role Of Microcredit Research Articles

Role of Microcredit on Poverty Reduction: A Measurement on Present On-Going Process

Role of Microcredit on Poverty Reduction: A Measurement on Present On-Going Process

A comparative study on the role of microcredit on agricultural production improvement among resource-poor rural women

The objective of the study was to compare agricultural investment and agricultural production of rural agrarian women in Uganda that had received microcredit to those that had not. A quasi-experimental was used to assess differences between performance indicators of agricultural enterprises for existing and incoming borrowers of Bangladesh Rural and Advancement Committee (BRAC) microfinance. Propensity score matching was used to ensure the comparability of the groups and to assess differences between existing borrowers and in-coming borrowers, before they received their first loan. Results indicated that the major reason for borrowing was education of children. There was no difference in investment in agricultural production between the study groups. The existing borrowers had lower monetary value of all harvested crops and for maize and beans than the in-coming borrowers. Total number of animals owned, types of animals kept and reported monetary value for goats and local cattle were also less for existing borrowers than for in-coming borrowers. It was observed that the loan repayment protocols did not match income from agriculture. The results reveal a need to modify loan repayment protocols to address the latent period between agricultural investment and output.

Effects of Microfinance Services on Economic Status Improvement: A Case of SKBBL, Pokhara, Nepal

Background: Microfinance is an effective tool for financial inclusion and poverty reduction in developing countries like Nepal. It delivers financial and non-financial services to unbanked people from formal financial services. Microfinance services support people from weaker sections of society with a view of socio-economic transformation. Low access to finance is a problem for poor and marginalized people. Microfinance institutions provide microcredit to unbanked people without physical collateral. Thus they help people from lower-income groups improve their livelihood through productive investment.
 Objectives: This paper aims to examine the effects of microfinance services on the economic status of clients' status with references to Sana Kisan Bikas Laghubitta Bittiya Sanstha Limited (SKBBL), Pokhara, Nepal.
 Methods: The research presents the findings of data collected through a survey research design in the Kaski district of Nepal. The researchers administered the survey questionnaire to 235 clients of SKBBL microfinance institutions involved in the programme for the last five or more years. We used a stratified random sampling technique to collect the data. The sample population comprised 70 from a scheduled caste (Dalit), 75 from ethnic groups, and 90 from upper castes. Both descriptive and inferential statistics have been used to analyze the data. The paired sample t-test has been used to examine the effects of microfinance intervention on occupational status, income level, consumption expenditure, capital expenditure, and monthly savings of the clients.
 Results: The results show that microfinance has contributed a significant role. It has enabled people from lower income groups to access microcredit and encourage productive investment that facilitates productive investment and economic transformation. -The result derived from paired sample t-test finds the positive effects of microfinance intervention on occupational status, income level, consumption, capital expenditure, and saving habits.
 Conclusion: This study concludes that role of microcredit is significant in enhancing the clients' economic status. Microfinance positively affects clients' earnings, savings, spending, asset accumulation, and occupational status. However, utilizing microcredit in productive sectors is necessary to empower the clients' economic status. The findings indicate that microfinance institutions must focus on effective microcredit applications to help create micro-businesses and improve the clients' livelihood status.

Impact of Microcredit on Women Empowerment: A Case Study in the Context of Chattogram District, Bangladesh

The microcredit sector in Bangladesh has flourished over the past few years by providing financial services to poor women who were previously unreachable, and it has been successful in meeting their fundamental needs, empowering them. This paper is an attempt to find out the role of microcredit on the empowerment of women borrowers in the context of some regions of the Chattogram district. These three Upazillas were surveyed cross-sectionally. A well-structured questionnaire was used to collect data during face-to-face interviews with 50 microcredit women borrowers and 50 non-borrowers from two major microcredit providers in Bangladesh. Participants were randomly selected. Data were summarized in tabular form. As a result of the chi-square test and ANOVA, significant results were observed. The paper analyzes the role of microcredit in women's empowerment from three perspectives: psychological, social, and economic. As a result of the study, BRAC and ASA microcredit have a significant role in reducing the vulnerability of poor women in the study region by generating income, improving the living standards of borrowers, and enabling these women to become more empowered by: (a) psychological empowerment by acquiring decision-making power in household activities, (b) economic empowerment by making a contribution to living standard & control over assets, (c) social empowerment by getting freedom of voice and mobility.

Role of Microcredit in Improving the Food Security Status of the Rural Poor Women: Evidence from Bangladesh

Purpose-The prime objective of this study was to assess the impact of microcredit on the household food consumption expenditure of the rural poor women in Bangladesh. Design/methodology/approach-Primary data was collected from the landless, marginal and small borrowers from Gazipur and Mymensingh districts of Bangladesh. The Simple Random Sampling (SRS) technique was used to select the samples. The Propensity Score Matching (PSM) technique was used to assess the impact of microcredit on the household food consumption expenditure. Binary logistic regression was used to assess the opinions of the borrowers about the role of microcredit in enhancing their food security status. Findings-This study showed that microcredit intervention made a significant contribution to increase the household food consumption expenditure of the borrowers. Originality/value- This study helps in formulation and smooth implementation of the food security programs for the rural poor women in developing countries. Keywords: microcredit, food security, poverty, women.

MICRO-FINANCE, SELF- HELP GROUPS AND WOMEN EMPOWERMENT: AN EVIDENCE FROM HIMACHAL PRADESH

Over the years a plethora of poverty alleviation programmes in various forms has been implemented in the country and a huge amount of social and financial investment has been made to achieve the sole aim and objective of poverty eradication. Most of the programmes were based on top-down approach and did not consider needs and requirements of the people. Activities for poverty alleviation in most cases adhered to fund-based development approach where there was little space for importing people’s sense on ownership which affected negatively the sustainability of the initiatives. The economic vulnerable groups, therefore, were forced to remain under-confident and the guarantee for security of their livelihood was found missing in the entire endeavour to eradicate poverty from the soil of India. The role of Micro-credit in eradication of poverty was stressed by the United Nations in agreed conclusions 1997/1 adopted by the Economic and Social Council on 25th July 1997, in which the Council called for Strengthening the institutions supportive of micro-credit and recognized the importance of access of micro-credit of people living in poverty to enable them to undertake micro-enterprises to generate self-employment and contribute to achieving empowerment especially women. Microfinance is commonly thought to be the magic wand to improve the social and economic status of a community by empowering women, enhancing financial inclusion and literacy, and encouraging savings. Despite the apparent success and popularity of microfinance there has been mixed evidence on its effects on the social and economic wellbeing of the poor.

Стратегический потенциал механизмов микрокредитования и социального бизнеса для роста благосостояния населения Кыргызстана

The purpose of this article was to analyze and comprehend the strategic role of microcredit and social business in reducing poverty. This article shows some of the socio-environmental and economic consequences of poverty that are significant from the point of view of sustainable development of the region and addresses the effective use of microcredit and social business in the context of reducing poverty. The article contains an analysis of the mechanisms of poverty reduction tested by world practice and specifics of using this accumulated experience in Kyrgyzstan. Entrepreneurship can act as an alternative way for the socio-economic activity of the population and a means of reducing the poverty level of the population.

Микрокредитлаш тизимини хорижий мамлакатлар тажрибаси асосида ривожлантириш йўналишлари

This article is comprehensive, exploring specific areas of microcredit in the experiences of Germany, Poland, Mexico, Spain and Russia.The purpose of the study is to study the role of micro credit in interest rates and usiness development in countries with advanced micro credit systems

Role of Microcredit and Technology Adoption in Sustaining Farmers’ Welfare

Poverty in rural areas of Indonesia is still a persistent problem. This paper analyses a virtuous circular causal relation among microcredit, agronomic technology and rural prosperity, and to determine factors affecting farmers to access microcredit and adopt technology in Indonesia. Data for this study were compiled from a survey that interviewed 220 of farm households. Samples of the study were randomly selected from chilli farming community in three regions of Java during 2013-2014. This paper employed a structural equation modelling, which enables to estimate a model of circular causal-interrelations. Microcredit provided positive direct and indirect impacts on rural prosperity. Indirect impact of microcredit was due to mediation of technology adoption. Farmers’ decision to access microcredit and adopt technology was determined by farmers’ characteristics and agribusiness environment via both exogenous and endogenous manners. Microcredit and technology have been able to secure a virtuous circle of enhancing farmers’ wellbeing. The virtuous circle was to augment farmers’ business in terms of larger farming size. Policy makers should introduce more advanced technology and provide credit facility at the same time to ensure sustained economic development in rural areas.

Influence of Microfinance Credits on the Socio-economic Status of Women in Edo State, Nigeria

This paper examines the influence of microfinance credits on womens’ socio-economic status in Edo state in both microfinance that offer health-related services and those that do not. The Objectives include examining the process through which women access microfinance loans and the role of microfinance on women’s socio-economic status. Social action and functionalist formed the theoretical frameworks. Questionnaire was administered to 750 purposively selected females’ microfinance clients with 400 drawn from Microfinance Institutions that offer health related programs and 350 drawn from microfinance institutions that do not offer health related services. Qualitative data were elicited from 14 In-depth Interviews (IDIs) with union representatives, 20 Key Informant Interviews (KIIs) with microfinance officials and 8 Focus Group Discussions (FGDs) with clients. Although, more women from microfinance without health related services reported experiencing more difficulty in accessing loans (24.7%) than those win microfinance with health related services (5.5%), study findings still revealed that access to microfinance positively influenced women’s socio-economic status (income (r=.023), occupation (r=.043) and education (r=.051). Qualitative data also buttressed the role of micro credit in that it enabled clients contribute to meeting household needs, expanded their businesses and generally reduced poverty. While the study concludes that microfinance empowers women socio-economically, it still argues that the very poor women in the society for which microfinance is targeted are still unreached and therefore poverty alleviation is not maximally achieved through this intervention. Thus, more funds and support from government, philanthropists and international agencies are required for effective poverty alleviation. Keywords : Health-related, Microfinance, Poverty, Women empowerment, Socio-economic, Poverty alleviation DOI : 10.7176/JPID/48-04

Does Microcredit Matter for Women Empowerment? A Household Level Study in Khulna District

Objective: The aim of this study is to explore the nexus between microcredit and women empowerment from the dimensions of participation in household decision making, involvement in income generating activities and wealth accumulation; participation in household economic activities; consciousness and mobility; and women rights. Sampling Technique: A total of 80 women including 40 from microcredit takers and 40 from non-takers women were selected randomly to collect the data from two separate villages under Phultala Upazila of Khulna District. Methods: For data analysis, econometric models such as Principal Component Analysis (PCA) and multiple regression model were applied. Results: The result of multiple regression model shows that the microcredit taker women are better off regarding women empowerment related to household decision making, and income and wealth accumulation. Whereas, the women from non-taker households are in a better position in case of women empowerment related to participation in household economic activities, and consciousness and mobility. In addition to the role of microcredit on women empowerment, the study found that education of the women plays a significantly positive role in women empowerment while social restriction faced by the women negatively affect their empowerment. Recommendation: Better monitoring system, training and awareness building programs arranged by the microcredit providing organizations may play a significant role in strengthening women empowerment.

Guest editorial: Poverty reduction in the FinTech age

In recent years, debates on microfinance have gravitated towards a discussion of financial inclusion and away from the role of microcredit in poverty reduction. A consensus has emerged that although microcredit may not reduce poverty, neither does it cause harm for the most part. At a minimum, access to microcredit gives people options for managing their financial lives, usually with greater predictability, privacy and dignity, while opening the door to other forms of financial service – certainly not something to be dismissed. But, now that financial inclusion (access to finance) is almost synonymous with the financial technologies (FinTech) that enable inclusion, is financial inclusion enough and what role does FinTech play?

Exploring Role of Microcredit in Enhancing Women Empowerment : A Qualitative Study

Exploring Role of Microcredit in Enhancing Women Empowerment : A Qualitative Study

Can Micro-Credit Promote Financial Inclusion? The Evidence from China

This paper offers an analysis of the effect of micro-credit to financial inclusion. We use the survey data of Shandong Province in China since 2010 to 2016, and measure the index of financial inclusion to build the sample for empirical study. This paper examines the role of micro-credit for enlarging the coverage of financial service and decreasing the financial cost. Finally, we give the evidence that the development of micro-credit has the positive effect on promoting the financial inclusion.

Role of Micro Credit in Fuel Wood Conservation and Living Standard

This study analyzed the role of micro credit on fuel wood conservation and improving household living standard in the surrounding communities of Chitral Gol National Park in Pakistan. For this purpose a sampled survey was conducted in 13 villages in which 286 respondents were interviewed, among them 143 were taken from recipients of micro credit house-holds and 143 from non-recipient households through random sampling. For analyzing the data various statistical tools were used including independent sample test, least square and multi nominal logistic model were used for analysis. The empirical analysis of the study indicates that micro credit has a positive impact on fuel wood conservation and living standard. And those who are Loan recipient house-holds were comparatively better standard of education, housing type and health. The consumption pattern of loan recipient households is also better than the non-recipient households.

Is Microcredit a Debt Trap for the Poor? Sifting Reality from Myth

There appears to exist a deep-seated scepticism about microcredit in popular perception in Bangladesh. One manifestation of this scepticism is the oft-repeated allegation, based mainly on hearsay or anecdotes, that microcredit is leading hordes of borrowers into a “debt trap.” The present paper makes the first systematic attempt to empirically investigate the existence, nature and magnitude of debt trap among microcredit borrowers in Bangladesh. The investigation relies on a large-scale nationally representative rural household survey, covering the period 2007-2013. The paper begins by examining the prevalence of two inter-related practices – namely, “overlapping borrowing” and “borrowing to repay,” which are often taken as indicators of debt trap in popular discussion of the subject. The paper argues that although these practices could sometimes lead to a debt trap, neither of them necessarily does so, so that the magnitude of debt traps could not be deduced from the magnitude of these practices. After defining the criteria for identifying a debt trap, the paper finds that debt traps can be said to characterise at most 4.5 per cent of microcredit borrowers who engage in “borrowing to repay” and only about 1.4 per cent of all microcredit borrowers. Furthermore, even in these few cases, microcredit cannot generally be held responsible for their plight. Debt traps occur when extremely vulnerable households are faced with overwhelming shocks; and the role of microcredit here is to help people to cope better with such shocks rather than to cause them.

Microcrédito y pobreza. La experiencia del programa Microempresas Sociales de Banmujer en Chiapas

Se analiza la experiencia de beneficiarias del programa Microempresas Sociales (MES) que opera en Chiapas desde 2001, a partir de los conceptos de pobre (sujeto), pobreza (contexto) y empobrecimiento (proceso), propuestos por Vega-Estrada. Los resultados muestran que el papel de los microcréditos en la erradicación de la pobreza se ha sobrevalorado y que, si bien pueden contribuir a revertir el proceso de empobrecimiento, no inciden en el problema estructural de la pobreza. Con esto esperamos contribuir a la discusión en torno a si el microcrédito femenino es una herramienta efectiva de combate a la pobreza.

Role of Microcredit towards Socioeconomic Empowerment of Pakistani Urban Women

The microcredits offered to the un-bankable poor women are perceived to be instrumental inimproving the livelihood patterns and empowering the womenfolk around the globe. The present qualitative st...

Pengaruh Strategi Perubahan Nilai Car Terhadap Jangkauan Layanan Dan Risiko Pembiayaan Pada Lkm Koperasi Sejahtera Bangsaku

The role of micro credit in poverty alleviation is very important. In Indonesia, performed by the Commercial Bank/ Islamic Banks of micro units, cooperative, rural bank/rural Islamic bank, and MFIs. Outreach microfinance services to the poor andmicro enterprisesin Indonesia is still very low. Perception of high risk for micro credit, especially loans to the poor/micro enterprises and lack of capital adequacy ratio (CAR) of rural bank/rural Islamic bank/ cooperative become obstacles for Financial institutions microlenders intermediation to the poor/micro enterprises or to financial institutions that will collaborate with MFIs in micro lending. Standardized Model approach is the basis for calculating CAR for Financial institutions microlendersin Indonesia. This method gives a risk weighting of 100% in the assessment of credit risk as a component of Risk Weighted Assets (RWA). CreditRisk+ method is a method of measuring credit risk models based on credit default approach that describes the amount and time limit information exposure and measurement of systematic credit risk of the borrower. By using this method, the credit risk is calculated as the ratio of the maximum estimate of bad debts to the credit balance. For MFIs with good performance of the NPL, then the value of RWA will be smaller, therefore the CAR is much bigger than the results of model calculations the standardized approach. With this result, outreach MFI services will increase as investors would not hesitate to cooperate in the delivery of microfinance to poor communities/micro enterprises.

Role of Microcredit on the Education: A Study on NGOs in Bangladesh

Bangladesh is a pioneer of the conceptualizing micro-credit program. It has undertaken some such programs to reduce poverty and bring about socio-economic changes in the rural community. Among them, microcredit plays vital role in promoting education. So micro-credit is considered as vital tools to promote the education and reduce drop out. Presently Microfinance popularly known as micro-credit. Now there are many types of microcredit organizations, we can see throughout the country. The common micro-credit institutions are GB, BRAC, ASA. This study explores the role of micro credits on the education, who had acquired micro credits from different microcredit organizations. Primary research was carried out with the help of a major NGO’s who give loan for education. Two hundred in-depth personal interviews were conducted by the author Roy, I. and Biswas, P. from February to August 2015. Most of the developing countries like Bangladesh; people are poor especially in the rural areas people who are unable to send their children to school. Though Bangladesh Government provides some reading and writing materials to all level of students throughout the Bangladeshi students. But it is not sufficient, and it can’t motivate parents to send their children school. Because of the high cost of education parents are discouraged to educate their children. In such a situation some major microcredit institutions provide money for their children education who is the member of these institutions. They sometimes provide money without any condition or sometimes conditionally. Such major micro-credit organizations are GB, BRAC, and ASA.