Microfinance and poverty reduction: evidence from a village study in Bangladesh

Financial Inclusion, Socioeconomic Disaster Risks and Sustainable Mountain Development: Empirical Evidence from the Karakoram Valleys of Pakistan

Does financial inclusion contribute to sustainable mountain development by providing access to financial resources and creating economic opportunities for poor mountain people? Keeping this question in mind, the present study aimed to investigate the nexus between financial inclusion and improvement in the living standards of mountain people, and reduction in socioeconomic disaster risks (economic poverty, multidimensional poverty and income inequality). For empirical investigation, the study employed Quasi Experimental Designs, Foster, Greer and Thorbecke poverty measures, Alkire et al. methodology, Gini Index and Quintile technique to assess the impact of financial inclusion on the living standards and reduction of economic poverty, multidimensional poverty and income inequality, respectively. We used the Logistic Regression technique to identify major drivers of socioeconomic disaster risks in the study area. The study collected quantitative and qualitative household level data from 424 households through structured questionnaires using multistage sampling technique for analysis. The findings of the study revealed a positive synergy among inclusive finance and living standards and a negative connection between financial inclusion and socioeconomic disaster risks in the Karakoram valleys of Pakistan. The logistic regression results also recognized financial inclusion as a potential determinant of economic poverty reduction. However, financial inclusion as a potential tool to eradicate multidimensional poverty in the study area showed insignificant results. These findings can help policy-makers and other stakeholders to understand the dynamics of socioeconomic disaster risks and the role of financial inclusion in their reduction to accomplish sustainable mountain development in the Karakoram valleys of Pakistan.

Capital Structure, Financial Performance, and Sustainability of Micro-Finance Institutions (MFIs) in Bangladesh

Capital structure plays an important role in organizational performance. Sources of funds for micro-finance institutions (MFIs) and their performance and financial sustainability become an important topic for the MFIs and poverty alleviation initiatives to achieve sustainable development goals of the UN. We explored the following question: Does the financial structure in terms of financial leverage affect the financial performance: Financial sustainability, depth, and breadth of outreach of MFIs? Our research focuses on studying the relationship between capital structure and financial performance of micro-finance institutions as well as achieving the objectives of this program by reaching out to the deserving clients without collaterals. A dataset of 187 MFIs is used to establish the relationship between the capital structure and performance of MFIs. Panel data regression analysis has been used for this study using the Random effect and Fixed effect models. Return on Asset (ROA), and Net Income to Expenditure (NIER) have been used as measures of financial performance. The findings indicate that Equity to Asset Ratio (EAR), Debt to Loan Ratio (DTL), Risk, and Size are the factors that influence NIER. Furthermore, EAR, and DTL have a positive effect on ROA, and Risk has a negative effect. The findings of this study will enable MFIs to configure their capital structure by creating a portfolio of sources of their capital from market-based sources of funds that can maximize their financial performance and reach out to poor clients without collaterals.

Sustainable Empowerment Initiatives among Rural Women through Microcredit Borrowings in Bangladesh

Microcredit is an effective instrument that has been recognized to alleviate poverty, especially in developing countries such as Bangladesh. This study seeks to use microcredit as an instrument to bridge the gap between the accessibility of microcredit among poor rural women and sustainable socio-economic development, providing novelty to the concept of “sustainability of empowerment”. In addition, this study employed poor rural women to estimate the empowerment performance of microcredit borrowers compared to non-borrowers in the same socio-economic environment as it relates to microcredit in rural Bangladesh. A regression analysis was used to accomplish these objectives. This study also used propensity score matching techniques to find an easy way to access microcredit. The empirical results not only involve participation in microcredit accessibility but also the particular qualitative attributes of women empowerment. The results also suggest that sustainability is accompanied by affluence among microcredit borrowers, as indicated by women empowerment. The outcome of the empirical analysis shows that there is a significant impact of microcredit on increasing participation in the overall decision-making process, in legal awareness, independent movements, and mobility, as well as enhancing living standards to encourage sustainable women empowerment. This study recommends future investigations for microcredit providers to explore how to build an integrated, holistic approach to women empowerment in Bangladesh.

Evaluating poverty alleviation strategies in a developing country

A slew of participatory and community-demand-driven approaches have emerged in order to address the multi-dimensional nature of poverty in developing nations. The present study identifies critical factors responsible for poverty alleviation in India with the aid of fuzzy cognitive maps (FCMs) deployed for showcasing causal reasoning. It is through FCM-based simulations that the study evaluates the efficacy of existing poverty alleviation approaches, including community organisation based micro-financing, capability and social security, market-based and good governance. Our findings confirm, to some degree, the complementarity of various approaches to poverty alleviation that need to be implemented simultaneously for a comprehensive poverty alleviation drive. FCM-based simulations underscore the need for applying an integrated and multi-dimensional approach incorporating elements of various approaches for eradicating poverty, which happens to be a multi-dimensional phenomenon. Besides, the study offers policy implications for the design, management, and implementation of poverty eradication programmes. On the methodological front, the study enriches FCM literature in the areas of knowledge capture, sample adequacy, and robustness of the dynamic system model.

The impact of microfinance programs on monetary poverty reduction

Purpose

The purpose of this paper is to examine the impact of microfinance programs sponsored by Sudanese microfinance institutions (SMFIs) on monetary poverty reduction in Sudan where poverty is widely spread.

Design/methodology/approach

The study adopted the control group approach, where income and expenditure are taken as welfare indicators. The updated World Bank’s international poverty line of 1.90 per person per day was adopted to separate the poor from non-poor. The data were collected by the means of a questionnaire distributed to a random sample of beneficiaries in the institution under study. The study adapted the Foster, Greer and Thorbecke (FGT) model to evaluate the role of microfinance programs in poverty reduction. Furthermore, to gain more insight into the impact of the program, a preliminary analysis was conducted using the independent-samples t-test to examine the difference in the welfare indicators for the sample of the control group and treatment group as well as that of the small loan group and micro-loan group.

Findings

The findings show that the microfinance program provided by SMFIs has reduced the monetary poverty among the participants. The results also reveal that beneficiaries who had received a larger volume of loan were noted lesser poverty than those who had received very small loan size. Moreover, the results demonstrate that poverty indices based on expenditure as a welfare indicator are far lower than those based on income for both groups.

Originality/value

This study contributes to the available literature by filling the gaps through including income and expenditure as monetary variables, which included separately in previous studies adopted the FGT model in the area of microfinance, in addition to exploring the role of loan size in the effect of microfinance on poverty reduction.

Double burden of underweight and overweight among women of reproductive age in Bangladesh

OBJECTIVE

Bangladesh, like many emerging economies of South-East Asia, has started to experience a double burden of continuing high rates of undernutrition and increasing rates of overweight and obesity. A lack of assessment of the nutritional shift leaves a gap in current policies: the growing overweight and obesity is yet to be addressed. The present paper investigates the change in nutritional status, particularly the shift in BMI, of Bangladeshi women of reproductive age (15-49 years) and characterizes the vulnerable households for both underweight and overweight status during a period of 10 years (2004-2014).

DESIGN

Generalized linear mixed-effect models were fitted for both urban and rural residents to assess underweight and overweight status.

SETTING

Bangladesh Demographic and Health Surveys.

PARTICIPANTS

Women aged 15-49 years (n 53 077).

RESULTS

The proportion of overweight increased during 2004-2014 from 10·7 to 25·1 % and the proportion of underweight decreased from 32·6 to 18·2 %. Prevalence of underweight status remained high in rural areas and prevalence of overweight increased rapidly in both rural and urban areas, creating a double burden. The significant contributors to this double burden were the change in women's level of education, increased household wealth, divisional location and rapid urbanization.

CONCLUSIONS

The findings indicate that specific cohort- or area-based intervention policy studies in line with the UN Decade of Action on Nutrition are required to address the nutritional double burden in Bangladesh.

Economic Impact of Development Initiatives on Low-Income Households in Kelantan, Malaysia

To improve the socio-economic condition of low-income households, underlying organizations offer a variety of products and services such as access to working capital and training programs. This study examined the impact of access to working capital and training programs on household income and economic vulnerability among participants of AIM, TEKUN, and LKIM in Kelantan, Malaysia. Adopting a cross-sectional design, data were collected randomly from 450 micro-entrepreneurs living in seven districts in Kelantan. The finding revealed that the total amount of economic loan received, length of the programs participation, and number of hours spent on training programs had a positive effect on household income in order to decrease the level of economic vulnerability. The finding provided useful information for policies development that prioritizes poverty eradication among low-income households who were vulnerable to weak economic situation.

Group-based microfinance for collective empowerment: a systematic review of health impacts

Objective

To assess the impact on health-related outcomes, of group microfinance schemes based on collective empowerment.

Methods

We searched the databases Social Sciences Citation Index, Embase, MEDLINE, MEDLINE In-Process, PsycINFO, Social Policy & Practice and Conference Proceedings Citation Index for articles published between 1 January 1980 and 29 February 2016. Articles reporting on health impacts associated with group-based microfinance were included in a narrative synthesis.

Findings

We identified one cluster-randomized control trial and 22 quasi-experimental studies. All of the included interventions targeted poor women living in low- or middle-income countries. Some included a health-promotion component. The results of the higher quality studies indicated an association between membership of a microfinance scheme and improvements in the health of women and their children. The observed improvements included reduced maternal and infant mortality, better sexual health and, in some cases, lower levels of interpersonal violence. According to the results of the few studies in which changes in empowerment were measured, membership of the relatively large and well-established microfinance schemes generally led to increased empowerment but this did not necessarily translate into improved health outcomes. Qualitative evidence suggested that increased empowerment may have contributed to observed improvements in contraceptive use and mental well-being and reductions in the risk of violence from an intimate partner.

Conclusion

Membership of the larger, well-established group-based microfinance schemes is associated with improvements in some health outcomes. Future studies need to be designed to cope better with bias and to assess negative as well as positive social and health impacts.

Where do the poorest go to seek outpatient care in Bangladesh: hospitals run by government or microfinance institutions?

Introduction

Health programs implemented by microfinance institutions (MFIs) aim to benefit the poor, but whether these services reach the poorest remains uncertain. This study intended to investigate the socioeconomic distribution of patients in hospitals operated by microfinance institutions (i.e. MFI hospitals) in Bangladesh and compare the differences with public hospitals to determine if the programs were consistent with their pro-poor mandate.

Methods

In this cross-sectional study, we used the convenience sampling method to conduct an interviewer-assisted questionnaire survey among 347 female outpatients, with 170 in public hospitals and 177 in MFI hospitals. Independent variables were patient characteristics categorized into predisposing factors (age, education, marital status, family size), enabling factors (microcredit membership, household income) and need factors (self-rated health, perceived needs for care). We employed Generalized Estimating Equations (GEE) to evaluate how these factors contributed to MFI hospital use.

Results

Use of MFI hospitals was associated with microcredit membership over 5 years (OR=2.9, p<.01), moderately poor household (OR=4.09, p<.001), non-poor household (OR=7.34, p<.01) and need for preventive care (OR=3.4, p<.01), compared with public hospitals. Combining membership and income, we found microcredit members had a higher tendency towards utilization but membership effect pertained to the non- and moderately-poor. Compared with the group who were non-members and the poorest, microcredit members who were non-poor had the highest likelihood (OR=7.46, p<.001) to visit MFI hospitals, followed by members with moderate income (OR=6.91, p<.001) and then non-members in non-poor households (OR=4.48, p<.01). Those who were members but the poorest had a negative association (OR=0.42), though not significant. Despite a higher utilization of preventive services in MFI hospitals, expenditure there was significantly higher.

Conclusion

Inequity was more pronounced in MFI hospitals than public ones. MFI hospitals appeared to miss their target population. We suggest that MFIs reorganize health programs toward primary health care to make care equitable and universally accessible. This study holds practical implications for governments, development agencies and microfinance practitioners working at the grassroots level.

Progress towards Millennium Development Goal 1 in northern rural Nicaragua: findings from a health and demographic surveillance site

BACKGROUND

Millennium Development Goal 1 encourages local initiatives for the eradication of extreme poverty. However, monitoring is indispensable to insure that actions performed at higher policy levels attain success. Poverty in rural areas in low- and middle-income countries remains chronic. Nevertheless, a rural area (Cuatro Santos) in northern Nicaragua has made substantial progress toward poverty eradication by 2015. We examined the level of poverty there and described interventions aimed at reducing it.

METHODS

Household data collected from a Health and Demographic Surveillance System was used to analyze poverty and the transition out of it, as well as background information on family members. In the follow-up, information about specific interventions (i.e., installation of piped drinking water, latrines, access to microcredit, home gardening, and technical education) linked them to the demographic data. A propensity score was used to measure the association between the interventions and the resulting transition from poverty.

RESULTS

Between 2004 and 2009, poverty was reduced as a number of interventions increased. Although microcredit was inequitably distributed across the population, combined with home gardening and technical training, it resulted in significant poverty reduction in this rural area.

CONCLUSIONS

Sustainable interventions reduced poverty in the rural areas studied by about one-third.