Poverty Alleviation and Identifying the Barriers to the Rural Poor Participation in MFIs: A Case Study in Bangladesh

Abstract

The main purpose of the study is to identify the barriers of participation of the rural poor in microfinance institutions (MFIs) in Bangladesh. To this aim, data were collected through face to face interview from six different districts of Bangladesh. From the microfinance literature, the study set eight explanatory factors and six demographics which are explored through three separate models in examining the factors that influence the dependent variables such as nonparticipation and drop-out (Model 1), participation (Model 2) and nonparticipant but willing to participate (Model 3) in MFIs. Logistic regression techniques are employed in analyzing data. The results of Model 1 indicate that education, other assets and spousal dislike to female head of households are observed as the significant barriers of participation. The outcome of the Model 2 suggests that there have been six factors that inhibit the rural poor participation in MFIs which are gender, age, yearly income, land, religion and lack of knowledge. And in the Model 3, gender, education, land, insufficient resources and lack of knowledge appear to be the significant barriers to participation of the rural poor in MFIs in Bangladesh.

Keywords: Poverty alleviation, rural poor, barriers to participation in MFIs, Bangladesh