LIMITATIONS OF MICROCREDIT FOR PROMOTING MICROENTERPRISES IN BANGLADESH

Md. Mahmudul Alam () and Rafiqul Islam Molla

Economic Annals, 2012, vol. 57, issue 192, 41–54

Abstract: Microcredit is regarded as a tool for poverty alleviation. A stereotyped delivery system is designed and used for promoting and serving survival- and subsistence-level economic activities, particularly for poor female clients. In Bangladesh its success has raised social expectations as to its potential as also a promoter of microenterprises, which are growth-yielding small businesses beyond subsistence-level economic activity. The field survey shows that about 11.7% of the microcredit borrowers are this kind of potential or growing microentrepreneur. It also shows that microcredit’s standardised delivery system, particularly in respect of gender preference, loan size, loan disbursement, and repayment schedules, is a strong limiting factor in effectively serving the microenterprises, which require a more flexible credit package. Therefore a methodological modification is necessary to accommodate flexibility in the microcredit delivery system.

Keywords: Grameen Bank; microcredit; microenterprise; subsistence; poverty alleviation; stereotype (search for similar items in EconPapers)
JEL-codes: O12 O29 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Working Paper: The limitations of microcredit for promoting microenterprises in Bangladesh (2019)
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