Microcredit - A More Credible Social than Economic Program In Bangladesh

Molla, R.I., and Alam, M.M. 2011. Microcredit - A More Credible Social than Economic Program in Bangladesh, Economics Bulletin, Vol. 31(2), pp. 1095-1104.

11 Pages Posted: 28 Mar 2017

See all articles by Rafiqul Molla

Rafiqul Molla

International Islamic University Chittagong

Md. Mahmudul Alam

Universiti Utara Malaysia

Date Written: 2011

Abstract

Calculated under the framework of economic-profit counting, the productivity of microcredit in Bangladesh is found very low. In this survey about 48% of the borrowers had to compromise their normal wages for self-employed labor to be able to pay the high interest for the credit. Similarly its social productivity is also found marginal. However, about 90% of the borrowers felt comfortable with microcredit even at so high interest rate seemingly to avoid losing or compromising their social and political empowerment at the hands of the local moneylenders or relatives. Borrowers give high value to their socio-political empowerments and are ready to compromise normal wages for their self-employed labor. In the game of political economy of credit for the poor, microcredit is seen as a means of protecting and enhancing sociopolitical empowerments of the low income and distressed people in the society and is appraised as a credible social than economic institution.

Keywords: Grameen Bank, microcredit, microenterprise, subsistent, poverty alleviation, stereotype, empowerment

JEL Classification: C21, O12, O29

Suggested Citation

Molla, Rafiqul and Alam, Md. Mahmudul, Microcredit - A More Credible Social than Economic Program In Bangladesh (2011). Molla, R.I., and Alam, M.M. 2011. Microcredit - A More Credible Social than Economic Program in Bangladesh, Economics Bulletin, Vol. 31(2), pp. 1095-1104.. Available at SSRN: https://ssrn.com/abstract=2941339

Rafiqul Molla

International Islamic University Chittagong ( email )

College Road
Chittagong
Bangladesh

Md. Mahmudul Alam (Contact Author)

Universiti Utara Malaysia ( email )

Sintok, Kedah
Malaysia

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