Social Capital and Access to Microcredit: Evidence from Rural Bangladesh

Abstract

Social capital is considered as an important factor for any development outcomes. This paper examined the effects of social capital on access to microcredit in rural Bangladesh. A cross-sectional study was conducted in Tuker Bazar Union Parishad in Sylhet district, Bangladesh and data was collected through face to face interview by social survey method. Descriptive statistics was applied to present the data and probit regression was applied to measure the effects of social capital on access to microcredit. The results show that all dimensions of social capital were low in this area. The results show that age of the household head was positively associated but size of the family was negatively associated with access to microcredit. The study revealed that aggregated social capital was positively associated with access to microcredit. Among the social capital dimensions, density of membership, cash contribution and labour contribution were positively associated with access to microcredit in this area. So, this study revealed that the social capital enhance the probability to access to microcredit in rural areas.

Keywords: Social Capital, Credit Access, Probit Regression, Bangladesh.