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PDF_logo Non-Borrowing Effects of Microfinance Participation: Evidence Using Long Panel Survey Data in Bangladesh

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Non-Borrowing Effects of Microfinance Participation: Evidence Using Long Panel Survey Data in Bangladesh


Paper No:41

Author:Shahidur R. Khandker, M. A. Baqui Khalily, and Hussain M. Samad

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Pages:29

Using a long panel survey data collected three times during 1991/92-2010/11, this paper examines the effects of non-credit inputs of microfinance programs in rural Bangladesh. This paper identifies the non-credit effects in three ways: first, by making a distinction between borrowers and non-borrowing participants; second, using program duration as proxy for non-participation after controlling for borrowing; and lastly, using program savings as a non-credit input. This paper finds that credit matters more for female members than for male members, while non-credit inputs (participation independent of borrowing) matters more for male members in augmenting household income and expenditure. Similarly, membership length has effects independent of borrowing, in particular in enhancing non-land asset and girls’ schooling. Finally, male savings helps increase household non-land assets and net worth, while female savings increases male and female labor supply as well as household non-land asset and boys’ schooling. As for the program-specific effects, female participants in BRAC seem to do better than Grameen Bank and other MFI participants in raising household welfare. This paper concludes that microfinance program members should have access to a wide range of non-credit services, besides credit, in order to have maximum benefits of the programs.

 
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