 The impact of credit and non-credit aspects on self-employment profit: a comparison of microcredit programs and commercial lenders in rural BangladeshSaad Alam ()
Journal of Developing Areas, 2013, vol. 47, issue 1, 23-45 Abstract: Rural credit programs in Bangladesh help the poor by providing collateral-free loans or credits at a low cost. In addition, they provide social development programs such as vocational and business training through a group-based peer monitoring system. These non-credit aspects may add to the success of microcredit programs. This article examines the effects of the credit and non-credit aspects of microcredit programs on self-employment profits. Using a household level data and an Instrumental Variable-Fixed Effect approach, the results show that the non-credit social aspects of the microcredit programs affect profit above and beyond the credit aspects and increase self-employment profit by 50% to 81%. This article also compares microcredit programs to existing commercial lenders which do not offer non-credit services. The results show that credit effects are larger while non-credit effects are smaller for commercial loans and demonstrate the efficacy of the non-credit aspects of the microcredit programs in raising profits. Keywords: Microfinance; commercial lending; self-employment profit; Bangladesh (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.47:year:2013:issue1:pp:23-45 Access Statistics for this article More articles in Journal of Developing Areas from Tennessee State University, College of Business Contact information at EDIRC. |
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