Evidence on the Impact of MFIs on Income of the Rural Poor in Bangladesh

Abstract

This paper estimates the impact of microfinance-related activities on income of the rural poor members of the MFIs located in the district of Narayanganj nearby Dhaka in Bangladesh. The empirical method uses experimental survey to collect the sample of 160 households from the study areas during the months of April and May, 2013. The study employs the multiple regression method to analyze the data. The findings demonstrate that except income of the households earned from sources of other than microfinance (MF), there has been no MF-related variable which is statistically significant to influence the income earned from the MF-related activities by the rural poor borrowers. This result implies that the impact of MFIs on income of the rural poor in Bangladesh is effectively nil. Hence, the objective of alleviating rural poverty remains as a far reaching phenomenon which warrants exploring the alternative development program to raise income of the rural poor and to alleviate rural poverty.

Keywords: Impact, MFIs, microfinance income, rural poor, alleviating poverty