The Scaling-Up of Microfinance in Bangladesh: Determinants, Impact, and Lessons
24 Pages Posted: 20 Apr 2016
Date Written: September 2004
Abstract
The microfinance industry in Bangladesh currently provides access to credit to around 13 million poor households. Zaman describes the factors that led to the scaling-up of micro-credit in Bangladesh, the impact this has had on the poor, future challenges in Bangladesh, and possible lessons for other countries. The consensus in the literature is that micro-credit plays a significant role in reducing household vulnerability to a number of risks and that it contributes to improving social indicators. The author argues that strategic donor investments in a handful of well-managed institutions that offer a simple, easily replicable financial product could lead to large gains in access to finance for the poor. However, this approach could sacrifice other objectives of financial sector development, such as product and institutional diversity, which could be promoted after the initial expansion has taken place. Governments can also have a crucial role in promoting access to microfinance by ensuring macroeconomic stability, enforcing a simple regulatory structure, and developing communications networks that reduce transaction costs. Another lesson is that while visionary leadership cannot simply be franchised, the internal management systems that led to the scaling-up can be replicated in other settings.
This paper - a product of the Finance and Private Sector Development Unit, South Asia Region - is part of a larger effort in the region to understand how successful anti-poverty interventions can be scaled-up.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Financial Dependence and Growth
By Raghuram G. Rajan and Luigi Zingales
-
Stock Markets, Banks, and Growth: Panel Evidence
By Thorsten Beck and Ross Levine
-
Stock Markets, Banks, and Growth: Panel Evidence
By Thorsten Beck and Ross Levine
-
Stock Markets, Banks, and Economic Growth
By Ross Levine and Sara Zervos
-
Financial Development and Economic Growth: Views and Agenda
By Ross Levine
-
Stock Markets, Banks, and Growth: Correlation or Causality
By Thorsten Beck and Ross Levine
-
By Thorsten Beck, Asli Demirgüç-kunt, ...
-
Finance, Firm Size, and Growth
By Thorsten Beck, Asli Demirgüç-kunt, ...
-
Finance, Firm Size, and Growth
By Thorsten Beck, Asli Demirgüç-kunt, ...
-
Financial Intermediation and Growth: Causality and Causes
By Ross Levine, Norman Loayza, ...