Impact Of Microfinance Program Towards Rural Livelihood And Empowerment In Bangladesh

Bangladesh has pioneered the implementation of an innovative microfinance program, placing it at the forefront of microfinance initiatives in developing countries. Microfinance is becoming an increasingly important tool to combat poverty through employment generation. Here analyzed the factors related to effective participation in the microfinance program in Bangladesh as the first exercise of the study. Data were collected from300microfinance recipient-respondents using face-to-face semi-structured interview schedule. Descriptive statistics, stepwise regression, and commonality analysis were employed to estimate the factors related to effective participation in the microfinance program. Both the governmental organization (GO) and the non-governmental organization (NGO) gave preference to rural, powerless, illiterate, and poor people in this venture. GO administration of repayment was disappointing (55%regularly repaying), compared to85%for NGOs. Farm size, repayment behavior, savings amount per week, and annual household income, were significant factors for recipients’effective participation in the microfinance program, whereas the NGO handling their respondents better than the GO. The success of the microfinance program depends on related factors in both the financing authorities and the recipients.There is growing recognition that microfinance programs have the potential to provide equitable and sustainable rural livelihood development. In the second exercise, analyzed the impact of different microfinance providers on basic rights and quality of life. Data were collected in two phases (June2010and2012) from300microfinance beneficiaries and200respondents of control groups using the same procedure. Descriptive statistics, factor analysis, multiple regression, propensity score matching, and treatment effect models were employed to ascertain the impact of microfinance provision on livelihood conditions. Microfinance increased the basic rights of the respondents and helped them improve their quality of life, as indicated by reduced food insecurity and improved nutrition, food and health, clothing, housing, sanitation, medicare, and education facilities. The positive changes were consistently more impressive in the non-governmental microfinance recipients than the governmental microfinance recipients. These data may help the governmental microfinance sector in particular to formulate a policy framework that drives improvements in sustainable rural development. Poverty alleviation is known to influence rural empowerment. Microfinance has become very important in global poverty reduction debates. Here investigated the impact of microfinance on recipients’economic, family and social, and political empowerment as the third exercise. Data were collected using the same techniques of previous exercise. Descriptive statistics, factor analysis, multiple regression, propensity score matching, and treatment effect models were employed to assess the impact of microfinance provision on recipients’ empowerment. In the majority of areas microfinance increases recipients’ empowerment. The effect is largest for family and social and political empowerment of recipients of governmental organization microfinance, while non-governmental microfinance recipients’ saw more improvements in their economic empowerment. A Pearson’s correlation matrix is used to analyze the associate relationship among the recipients’ and non-recipients’ livelihood and empowerment indicators and found that there had been positive and significant association. The degree of association varied based on the level of livelihood and empowerment conditions of both study and control group. Microfinance is an effective tool for rural empowerment.Finally, In respect to problems faced by the recipients in microfinance program, the majority of them did not face any problem in their membership period, while some of them claimed organization (GO) has lack of proper monitoring system and cannot get back the savings payment easily, do not maintain the given commitment, etc. A group of them were subject to unable to suggest for the betterment of the microfinance program because of their extreme laggardness. Non-members opined that the program is beneficial for the poor people, although a part of them had negative impression. There was a big gap among the non-members respondents about the positive role of microfinance program.