Socio-economic impacts of microcredit on rural areas in Bangladesh: An econometric analysis

Abstract

angladesh is a pioneer and home of conceptualizing microcredit program. It has undertaken a number of such programs to reduce poverty and bring about socio-economic changes in the rural community. Bangladesh is one of the populous countries of the world and a high percentage of the population suffers from abject poverty. Poor rural families of Bangladesh take microcredit from different non-government organizations (NGOs) for reducing poverty and increase the standard of their life. Microcredit makes some socio-economic changes on rural population including the reduction of income inequality, unemployment, consumption etc. Moreover, microcredits from the NGOs are spent on income generating activities and hence increase the income of rural population as well as making their saving habit. The microcredit has also positive impacts on health, education, nutrition, population growth, life expectancies and economic welfare of the poor rural family. This paper examines the socio-economic impacts of microcredit on rural family in four villages named Malonchi, Khoyershoti, Dipchor, and Monipur under Pabna Sadar, Pabna, Bangladesh.