Evaluating the role of Microcredit on Poverty Reduction in Bangladesh

Abstract

The aim of this thesis is to investigate the effectiveness of the government‟s microcredit interventions in poverty alleviation with a particular emphasis on the role of a selected project named Integrated Poverty Alleviation Programme-IPAP in one of the sixty four districts in Bangladesh, namely Chapainoabgang. The study reveals that the economic condition of the beneficiaries has improved by virtue of the project-touch that was evident in some areas like income poverty and human poverty. The findings indicate that the incidence, intensity, and severity of poverty have been significantly reduced among the project participants. Micro-credit was revealed to be the main determinants of the income of project beneficiaries. Other than microcredit, the poverty of borrowing households was alleviated with the increase of education, enterprise age (i.e. length of membership in project), training, and microcredit loan size. The type of enterprise was reported to have significant correlation with the poverty status. According to the project members, the structural causes (i.e. mostly the lack of support from the government) were primarily responsible for poverty, followed by individual causes (i.e. lack of resource, ability, skills and efforts). The findings confirmed that the government microcredit intervention has had a significant impact in the lives of the beneficiaries and is a way forward towards a desired level of poverty alleviation.