Microcredit cuts poverty, but many borrowers left behind: Study

Microcredit programmes have contributed to income growth and poverty reduction in Bangladesh, but borrowers who fail to graduate out of poverty face deeper deprivation than others, according to a new study.
The research, titled "Microcredit for Poverty Alleviation and Women Empowerment", conducted by the Bangladesh Academy for Rural Development (BARD), finds that while microcredit is widely recognised for improving livelihoods and expanding opportunities, disparities remain among beneficiaries.
The findings were presented at a dissemination seminar organised by the Microcredit Regulatory Authority in Dhaka on Thursday. The event was attended by Rashed Al Mahmud Titumir, finance and planning adviser to the prime minister, as the chief guest.
Presenting the study, research team member Ranjan Kumar Guha highlighted that poverty incidence remains higher among borrowers who are unable to move out of poverty.
He noted that lack of education accounts for 37.5 per cent of the causes behind persistent poverty in such households.
The study also finds that 43.5 per cent of borrowers remain confined to primary-level education due to pressure to repay NGO loans, while the literacy rate among them stands at only 14.01 per cent.
The session was chaired by Professor Dr Mohammed Helal Uddin, executive vice chairman of the MRA.
Addressing the event, Mr Titumir stressed the need to increase female labour force participation and ensure that every citizen has access to a bank account within the next year.
Referring to ongoing geopolitical tensions and their spillover effects, he said the country is navigating a critical phase amid multiple global shocks.

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