Microfinance Effects on Borrowers’ Poverty: A Case Study on BRAC
Mamun Muhammad Ziaulhaq () and
Aslam Mohammad ()
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Mamun Muhammad Ziaulhaq: Pro-Vice Chancellor, East West University, Bangladesh, mzmamun@ewubd.edu
Aslam Mohammad: Faculty of Industrial Management, University Malaysia Pahang, Pahang, Malaysia
International Review of Financial Consumers, 2022, vol. 7, issue 1, 1-18
Abstract:
Many parts of the world have been suffering with poverty and some are in extreme form. Microfinance is addressed as an instrument for accelerating financial access to the poor for alleviating their poverty as mentioned in the foremost sustainable development goal. This effort has been operationalized in Bangladesh through BRAC - a prime operator for poverty alleviation. BRAC is presently serving a large number of marginal poor below the poverty level globally. At the onset, governments and donor backed microfinance programs presumed a positive welfare effect on poverty. However, mixed effects are visible in empirical studies. This paper is designed to assess the microfinance effect on BRAC borrowers’ poverty at business, household, individual, and security levels. The effect is measured by regressing microfinance on borrowers’ poverty using the Household Economic Portfolio Model (HEPM). The results show that microfinance has a significant positive effect on reducing BRAC borrowers’ poverty in each of the levels reflected by sixteen different items. Hence, this microfinance program appears to be effective as a development tool to alleviate poverty.
Keywords: BRAC; Borrowers; HEPM Model; Household; Individual; Microfinance; Poverty; Security (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:irfinc:v:7:y:2022:i:1:p:1-18:n:1001
DOI: 10.36544/irfc.2022.7-1.1
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