Dynamic Effects of Microcredit in Bangladesh
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World Bank, Washington, DC
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This paper uses long panel survey data
spanning over 20 years to examine the dynamics of
microcredit programs in Bangladesh. With the phenomenal
growth of microfinance institutions representing 30 million
members with over $2 billion of annual disbursement over the
past two decades, it is important to understand the dynamics
of microcredit expansion and its induced impact on household
welfare. A dynamic panel model is used to address a number
of issues, such as whether credit effects are declining over
time, whether market saturation and village diseconomies are
taking place, and whether multiple program membership, which
is rising as a consequence of microcredit expansion, is
harming or benefiting the borrowers. The paper's
results confirm that microcredit programs have continued to
benefit the poor by raising household welfare. The
beneficial effects have also remained higher for female than
male borrowers. There are diseconomies of scale caused by
higher levels of village-level borrowing, especially for
male members. Multiple program membership is also growing
with competition from microfinance institutions, but this
has rather helped raise assets and net worth more than it
has contributed to indebtedness.
Palabras clave
ADVERSE EFFECTS, AGRICULTURE, AMOUNT OF CREDIT, ASSET VALUE, ASSETS, ATTRITION, BANK POLICY, BENEFICIAL EFFECTS, BIDS, BORROWER, BORROWING, CASH TRANSFER, COMMERCIAL BANKS, CONSUMER GOODS, CREDIT ACCESS, CREDIT COEFFICIENTS, CREDIT EXPANSION, CREDIT GROUP, CREDIT INCREASES, CREDIT PROGRAMS, CREDIT RISK, CREDIT SCORING, DATA ANALYSIS, DATA COLLECTION, DEBT, DEMAND FOR CREDIT, DEPOSITS, DEVELOPMENT POLICY, DEVELOPMENT RESEARCH, DIMINISHING RETURNS, DISBURSEMENT, DISECONOMIES OF SCALE, DUE DILIGENCE, DUMMY VARIABLE, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ELASTICITY, EMPLOYMENT, EXOGENOUS VARIABLES, EXPENDITURE, EXPENDITURES, EXTERNALITIES, EXTERNALITY, EXTREME POVERTY, FEMALE ENTREPRENEURS, FEMALE LABOR, FINANCIAL INSTITUTIONS, FINANCIAL STUDIES, GROUP LENDING, GROWTH RATE, HOUSEHOLD ANALYSIS, HOUSEHOLD INCOME, HUMAN RESOURCES, INCOME, INCREASING RETURNS, INDEBTEDNESS, INFORMAL LENDERS, INSURANCE, INTEREST RATES, INTERNATIONAL BANK, LABOR ECONOMICS, LABOR SUPPLY, LABORERS, LENDER, LOAN, LOAN AMOUNTS, LOAN PORTFOLIO, LOAN RECOVERIES, LOCAL ECONOMIES, LOCAL ECONOMY, LOCAL MARKET, LONG-TERM LOANS, MARKET CONDITIONS, MICRO FINANCE, MICROCREDIT, MICROENTERPRISES, MICROFINANCE, MICROFINANCE INSTITUTIONS, MODELING, NEGATIVE EXTERNALITIES, NEGATIVE EXTERNALITY, PER CAPITA INCOME, POLITICAL ECONOMY, POSITIVE EFFECTS, POSITIVE EXTERNALITIES, POSITIVE EXTERNALITY, PRODUCTIVITY, REGRESSION ANALYSIS, RENTS, REORGANIZATION, RESEARCH WORKING PAPERS, RESEARCHERS, RETURN, SAVINGS, SAVINGS ACCOUNT, SPECIFICATION ERROR, SURVEY DATA, TECHNIQUES, TEST STATISTICS, TRADE SECTOR, TRADING, WAGES, WEALTH, WEALTH EFFECT