Microfinance competition and multiple borrowing: Evidence using panel data from Bangladesh

Minhaj Mahmud, Yasuyuki Sawada and Mari Tanaka

Review of Development Economics, 2022, vol. 26, issue 2, 1164-1188

Abstract: We examine the causes and consequences of multiple borrowing in rural Bangladesh using long‐term household and village panel data covering the years 2000–2014. We find that the sharply growing number of microfinance institutions (MFIs) in a wider set of villages over time coincides with a corresponding increase in household borrowing from multiple MFIs and households accessing loans generally as well as significant rises in the total values of household assets, especially in the form of agricultural equipment. Although the increasing number of MFIs resulted in some households borrowing to repay previous loans, the fraction of such households is relatively small.

Date: 2022
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