The Scaling-Up of Microfinance in Bangladesh: Determinants, Impact, and Lessons
The microfinance industry in Bangladesh currently provides access to credit to around 13 million poor households. The author describes the factors that led to the scaling-up of micro-credit in Bangladesh, the impact this has had on the poor, future...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/09/5138609/scaling-up-microfinance-bangladesh-determinants-impact-lessons http://hdl.handle.net/10986/14137 |
| Summary: | The microfinance industry in Bangladesh
currently provides access to credit to around 13 million
poor households. The author describes the factors that led
to the scaling-up of micro-credit in Bangladesh, the impact
this has had on the poor, future challenges in Bangladesh,
and possible lessons for other countries. The consensus in
the literature is that micro-credit plays a significant role
in reducing household vulnerability to a number of risks and
that it contributes to improving social indicators. The
author argues that strategic donor investments in a handful
of well-managed institutions that offer a simple, easily
replicable financial product could lead to large gains in
access to finance for the poor. However, this approach could
sacrifice other objectives of financial sector development,
such as product and institutional diversity, which could be
promoted after the initial expansion has taken place.
Governments can also have a crucial role in promoting access
to microfinance by ensuring macroeconomic stability,
enforcing a simple regulatory structure, and developing
communications networks that reduce transaction costs.
Another lesson is that while visionary leadership cannot
simply be franchised, the internal management systems that
led to the scaling-up can be replicated in other settings. |
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