Consumpiton Difference between Microcredit Borrowers and Non-Borrowers: A Bangladesh Experience

This paper investigates the consumption behaviour of borrowers of two major microcredit institutions in Bangladesh and compares that with non-borrowers. Primary data has been collected from borrowers of the Grameen Bank and Bangladesh Rural Advancement Committee (BRAC) operating in three major distr...

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Bibliographic Details
Published in:The Journal of developing areas 2010-03, Vol.43 (2), p.313-326
Main Author: Rahman, Sayma
Format: Article
Language:English
Subjects:
Betel
Cigarettes
Consumer behavior
Consumption
Consumption (Economics)
Credit
Elasticity of demand
Expenditures
Food
Households
Industrialized nations
Meats
Microcredit
Microfinance
Per capita
Poverty
Socioeconomic factors
Studies
Towns
Variables
Vegetables
World Bank
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Summary:This paper investigates the consumption behaviour of borrowers of two major microcredit institutions in Bangladesh and compares that with non-borrowers. Primary data has been collected from borrowers of the Grameen Bank and Bangladesh Rural Advancement Committee (BRAC) operating in three major districts in Bangladesh. Along with borrowers, non-borrowers data has also been collected from non-program village to avoid endogeneity. Control-group method (nonborrowers from non-program villages) has been used to compare the differences in consumption patterns between the two groups. This study analyses the impact of per capita monthly expenditure and other household characteristics on the budget share of eleven items (food and non-food) consumed by borrowers and non-borrowers. Results from the estimation on linear and quadratic model suggest that borrowers of microcredit programs are better off in terms of consumption than non-borrowers.
ISSN:0022-037X
1548-2278
1548-2278
DOI:10.1353/jda.0.0056