Preference Behavior of the Rural Poor Observed in Microfinance Borrowing: Case for Bangladesh

Abstract

The main purpose of this paper is to examine the potential factors such as fear of getting into risk of borrowing micro loans, knowledge and religious principles that can influence on attitude to affect the intended preference behavior of the rural poor women in the context of participation in MFIs in Bangladesh. In so doing, a theoretical framework using the theory of reasoned action (TRA) as its basis is established. Data are collected through face to face interview with the rural people from six different regions across Bangladesh. The respondents are selected through random sampling procedure. The structural equation modeling (SEM) technique has been used for analyzing data. The results indicate that at least two belief-constructs influence attitude which affect intention toward preference behavior of the rural poor in terms of participation in MFIs in Bangladesh. This outcome would be helpful for the policy-planners in order to formulate further strategy to alleviate rural poverty from society.

Keywords: Microfinance, MFIs, rural poor, preference behavior, TRA