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Beyond ending poverty: the dynamics of microfinance in Bangladesh

12/07/2016 | The World Bank

Beyond Ending Poverty: The Dynamics of Microfinance in Bangladesh uses household long panel surveys from 1991/92 to 2010/11 in Bangladesh to address some of the criticisms of microfinance—including whether pushing microfinance has made it redundant as a tool for poverty reduction—while investigating whether it still matters for the poor after two decades of extensive growth. The book’s findings confirm the positive effects of continued borrowing from microfinance programs. Despite a substantial increase in microfinance borrowing, loan recovery has not declined and long-term borrowers are not trapped in poverty or debt. Interest rates charged by MFIs are not too high for realizing returns on investment, although the MFIs have scope for lowering them. Beyond Ending Poverty is expected to contribute to the ongoing debate on the cost-effectiveness of microfinance as a tool for inclusive growth and development. The book is expected to fill knowledge gaps in understanding the various virtues of microfinance against its portrayal as having drifted from its original poverty-reduction mission.

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