The Impact Of Microcredit On Rural Poverty Alleviation Of Bangladesh

The Micro credit sector in Bangladesh is one of the world largest and it is best known for its pioneering. A collateral free loan that one is the door steps demand of poor people. Bangladesh, with a substantial proportion of the population having access to very limited assets, employment creation would be the answer of poverty alleviation. Poor people get an opportunity to access broad range of financial services through micro credit which is the success of micro credit in reaching the poorest. Borrowers are organized into groups and peer pressure among them, which reduced the risk of default. Another vital role of MFIs is propagating precious information about health, education, sanitation, discrimination and legal rights etc which are helped to live better life.The main objective of the thesis was to analyze the impact of micro credit on household income as well as measure household socioeconomic condition after access micro credit. The study is based on primary data collected from30villages where from Interviewed with at least four hundred carefully selected respondents (beneficiaries and institutional), administer some questionnaires on respondents and collect useful data for research. Finally had selected100samples whose were with MFIs more than5years. Simple descriptive statistics such as sums, means, percentages, frequency distributions, cross-tabulations, correlation statistics-Pearson r, econometric model (logistic model) were used to analyze primary data for this paper. The results showed that, after using microcredit till6six years in most cases they are not in extreme conditions of poverty. Micro credit can alleviate rural poverty and reduce inequality of Bangladesh. The thesis also states that the amount of credit is insufficient. After mitigating their daily expenses and weekly installments they can save a little amount of money which is not enough to run an income generating activities. For tight repayment schedule of MFIs borrowers have to loan from another MFIs to pay their weekly installment. The thesis states that providing affordable micro credit services to the rural population still remains to be an important part of development strategy.Microcredit institutions should be more supportive and innovative to their clients to do their business that can help them to escape from the poverty trap. It is needed to create a policy framework not only for microcredit institutions but also for rural economy that would lead to the creation of employment opportunities for rural labor force. Microcredit institutions and government can task simultaneously for poverty reduction in rural area.