What Impact Does Microfinance Have on Rural Livelihood? A Comparison of Governmental and Non-Governmental Microfinance Programs in Bangladesh

•There are conflicting results and the impact of the type of provider has yet to be established.•Microfinance improves the basic rights and quality of life of all recipients.•NGO recipients show greater benefit from receiving microfinance loans than GO recipients.•Financing authorities should consid...

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Bibliographic Details
Published in:World development 2015-04, Vol.68, p.336-354
Main Authors: Mazumder, Mohummed Shofi Ullah, Lu, Wencong
Format: Article
Language:English
Subjects:
Bangladesh
Civil rights
Comparative analysis
Credit market
Data collection
Discriminant analysis
Factor analysis
governmental organization
Human rights
Microfinance
microfinance institutions
non-governmental organization
Non-governmental organizations
Quality of life
Regression analysis
rural livelihood
Statistics
Studies
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Summary:•There are conflicting results and the impact of the type of provider has yet to be established.•Microfinance improves the basic rights and quality of life of all recipients.•NGO recipients show greater benefit from receiving microfinance loans than GO recipients.•Financing authorities should consider larger loans for more experienced individuals. This paper analyzes the impact of different microfinance providers on basic rights and quality of life. Data were collected in two phases from 300 microfinance beneficiaries and 200 control respondents. Descriptive statistics, factor analysis, multiple regression, propensity score matching, and treatment effect models were used for analysis. Microfinance appears to increase the basic rights of respondents and help improve quality of life; the positive changes are consistently higher in non-governmental microfinance recipients. These data may help to formulate new policies that help to improve rural livelihood.
ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2014.12.002