Microcredit in Bangladesh : Achievements and Challenges

Publication Date: 2004
Published by: Islamabad, Pakistan:MicroFinance in Pakistan: Innovating and Mainstreaming Conference
Document Type: Case Study (PDF)

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How has micro credit impacted the financial and social scenario in Bangladesh?

This paper provides a brief insight into the evolution and outreach of micro credit in Bangladesh. With reference to micro credit, it discusses the:

• Development and achievements;
• Challenges faced.

Drawing on his association with the Palli Karma-Sahayak Foundation (PKSF), the author:

• Highlights its operational strategy, outreach and financial viability.
• Presents the results of a survey commissioned by PKSF that analyzed the impact of micro credit operations on the financial and social status of its clients.

Although the findings of the study were positive, it was able to identify some major challenges faced by micro credit in Bangladesh. Some of these include:

• Achieving a balance between financial sustainability and outreach to the poorest sections of society;
• Introducing new products in order to expand and sustain outreach;
• Accessing non-donor source of financing;
• Discussing internal and external governance issues – the lack of an effective supervisory and regulatory framework.

In conclusion, the author

• Argues that in the global scenario, the achievement of Bangladesh in the field of micro credit stands out prominently.
• Recommends that the governments, microfinance institutions, donor agencies and the peoples of all nations need to come together with a multi-pronged approach, to achieve the common goal of alleviating poverty.