10mn Microfinance Bangladeshi clients rise above poverty says study

Microfinance Focus January 27, 2011: A recent report released by the Microcredit Summit Campaign, a program of the US-based advocacy group RESULTS Educational Fund, said that nearly 2 million Bangladeshi households involved in microfinance comprising of nearly 10 million family members, on net rose to above $1.25 a day threshold between 1990 and 2008.

Microfinance programs offer loans of $50 and enable the poor to start or expand small businesses and provide other financial services such as savings and micro-insurance products.
A survey conducted in more than 4,000 Bangladeshi households, by the Dhaka-based Economic Research Group, found that a dramatic number of families moved out of poverty between 1990 and 1997 but the massive flood in 1998 and the food and fuel crisis of 2008 were the likely cause for millions of families to fall below the $1.25 a day threshold during that later period.  However, even with the setbacks, on net nearly 10 million people rose above poverty.

“While the Bangladesh survey was not designed to assign causality, it is very significant that the number of microfinance clients who left poverty closely links to the national data on poverty reduction,” said Microcredit Summit Campaign Director Sam Daley-Harris. “The majority of poverty in Bangladesh is in rural areas and so are the majority of microfinance clients.”

The Microcredit Summit Campaign report closely mirrors the findings of official country-level research in Bangladesh with the national Household Income and Expenditure Survey (HIES) estimating that 10.62 million Bangladeshis left hardcore poverty between 1990 and 2005.

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