The Trend in Microcredit Growth and its Consequence on Poverty in Bangladesh: A Review
DOI:
https://doi.org/10.70112/ajms-2026.15.1.4349Keywords:
Microcredit, Documentary Facts, Income and Consumption, Health Issues, Small Entrepreneurship IssuesAbstract
Microcredit in Bangladesh has grown rapidly and has helped reduce poverty and improve livelihoods, but its long-term effectiveness remains mixed and is limited by debt risks and structural economic challenges. The main purpose of this study is to examine the history, current situation, effectiveness, and previous poverty impact studies of microcredit in Bangladesh. This study is based on documentary facts from various sources. Grameen Bank, BRAC, ASA, TMSS, BORU Bangladesh, and DISA were selected as sample institutions. The data were analyzed for the period from 2013 to 2020. The documentary review showed that Bangladesh experienced notable increases in loan payment, loan amount per borrower, net reserves per microfinance institution (MFI), and credit outstanding per MFI. The study also found that rural households have historically been the main focus of issues related to income, consumption, asset accumulation, health, and education. The impact studies on poverty, income and consumption, health services and hygienic practices, and small entrepreneurship development are presented in tabular form. The recovery rate showed a continuous decline during 2020, even though most key indicators, such as loan disbursement, average loan size per borrower, net reserves per microfinance institution, and outstanding loans per institution, demonstrated notable improvement. The findings also suggest that microcredit has generally benefited low-income households by raising their income and consumption levels while supporting poorer households in improving their hygiene and overall health conditions.
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