The Effects of Microfinance Programs on Recipients’ Livelihoods in Rural Bangladesh

Mohummed Shofi Ullah Mazumder ()
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Mohummed Shofi Ullah Mazumder: Sher-e-Bangla Agricultural University

The European Journal of Development Research, 2022, vol. 34, issue 3, No 9, 1383-1418

Abstract: Abstract Despite the widespread use of microfinance programs since the early 1990s, there is little empirical research on the effects of microfinance on recipients’ livelihoods in rural areas. We therefore compared the effects of governmental and non-governmental microfinance on livelihood and empowerment in rural Bangladesh. Data were collected in two phases from the same 300 microfinance beneficiaries and 200 control respondents using face-to-face interviews. Both descriptive and inferential statistics (propensity score matching, Rosenbaum bounds, and ordinary least squares) were used for analysis. Fixed effects instrumental variable estimates were also designed to minimize spillover effects. Microfinance significantly contributed to different livelihood and empowerment dimensions to ultimately improve livelihoods, with the greatest improvements seen in non-governmental rather than governmental microfinance recipients.

Keywords: Microfinance; Rural livelihood and empowerment; Fixed effects instrumental variables (FE-IV); Propensity score matching (PSM); Rosenbaum bounds (search for similar items in EconPapers)
JEL-codes: C21 H81 O16 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1057/s41287-021-00425-w

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