Essays on microfinance: financial and social impacts in rural Bangladesh (original) (raw)

Rural credit programs in developing countries are designed to help the poorest of the poor by providing collateral-free loans at a low cost. In order to properly measure the efficacy of these programs, one needs to examine not only the pecuniary benefits of the programs but also the non-pecuniary benefits. The micro-loans are mandated for income-generating purpose such as investing in a micro-enterprise. To elaborate, one way that credit programs can benefit the poor is by providing them opportunities to increase their income. Another way that these programs benefit is by empowering women. The credit programs tend to target poor women, thereby providing them with income-generating opportunities that they otherwise lack. A woman's potential contribution to the household income may increase her intra-household bargaining power and empower her. This may have far-reaching consequences in terms of household investment in children's health and education, as well as a woman's w...