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PDF_logo Impact of Ex-Ante Access to Microfinance on the Coping Strategies to Cope with Monga of Poor Households in North-Western Bangladesh

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Impact of Ex-Ante Access to Microfinance on the Coping Strategies to Cope with Monga of Poor Households in North-Western Bangladesh


Paper No:43

Author:Md. Tareq Ferdous Khan, M. A. Baqui Khalily, and Henry Scheyvens

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Pages:22

Bangladesh is a highly natural hazard prone country. Rural households are vulnerable to a range of climate-related natural hazards such as floods, cyclones, riverbank erosion, drought, storm surges, and tornados. In north-western parts of the country, almost every year they face seasonal (September-November) hardship in the form of a near famine situation, which is termed as monga. To cope during monga, poor households adopt various strategies including advance labor sale, asset sale, informal borrowing and internal migration. This paper evaluates the impact of ex-ante access to microfinance on these coping strategies, using switching regression to control the unobserved selection bias in deciding to be a member of a microfinance scheme. The analysis reveals that the dependence on these coping strategies is significantly lower for households with ex-ante access to microfinance than those without. These observations are particularly pertinent to the development of adaptation strategies, as poor households in north-western areas of Bangladesh are experiencing increasingly drier weather associated with climate change.

Keywords: Ex-ante Access to Microfinance, Coping Strategies, Switching Regression, monga.

 
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