Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh

Md. Alamgir Hossain, Mohammad Malek and Zhengfei Yu
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Md. Alamgir Hossain: Bangladesh Bank, Dhaka, Bangladesh
Zhengfei Yu: Graduate School of Humanities and Social Science, University of Tsukuba, Ibaraki, Japan

Asian Development Review (ADR), 2023, vol. 40, issue 02, 363-397

Abstract: Using 791 consistent households in the balanced panel, comprising 3,985 households in the unbalanced panel–from a nationally representative, multipurpose, five-round (1988, 2000, 2004, 2008, and 2014) Mahabub Hossain Panel Data in Bangladesh—we provide evidence for the long-term impact of different rural credit sources—which include formal banks, quasiformal microfinance institutes, and informal channels—on household welfare indicators. We find that the long-term impact of access to rural credit on a few welfare indicators is statistically insignificant and sometimes negative. This finding mostly holds when we investigate the impact of different rural credit sources separately. Our results raise a question on the progressive lending of some credit sources, especially microfinance institutes, and have implications for the introduction of nationwide credit bureaus in Bangladesh.

Keywords: economic welfare; long-term impact; panel data; rural credit sources; rural households (search for similar items in EconPapers)
JEL-codes: C33 I31 O12 Q14 (search for similar items in EconPapers)
Date: 2023
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Related works:
Working Paper: Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh (2021)
Working Paper: Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh (2021)
Working Paper: Impact of Rural Credit on Household Welfare: Evidence from a Long-Term Panel in Bangladesh (2021)
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DOI: 10.1142/S0116110523500166

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