Seen Comprehension - 33 Alim

How can I be self-employed...?

An efficient banking system, although important for economic growth, is often unable or unwilling to lend money to the poorer section of society, hence the need for micro-finance institutions. Bangladesh has a long history of micro-credit finance, with internationally acclaimed organizations such as the Grameen Bank providing credit to the poor, particularly rural women. These institutions, in addition to providing credit, emphasize the need to develop skills and raise consciousness among the rural poor. There are about 800 micro-finance institutions in the country with a total membership of about 7 million of which 82 percent are women. The cumulative disbursement made by these institutions since their inception is estimated at Tk. 44billion, with current loans at Tk. 9.6 billion. It is estimated that they have created employment for about 54,000 people.

A recent survey of 1,798 households in Bangladesh indicates that about 45 percent of eligible households in Bangladesh participate in micro-credit programs and that about two-thirds of the participants are women. The survey found that micro-credit programs had a positive effect on socio-economic variables, including children's schooling, children's nutrition and family planning. Borrowing by women particularly improved the nutritional status of both male and female children. Consumption by about 5 percent of program participants increased to the point that their households rose above the poverty line. These findings about the importance of micro-credit in poverty reduction have been substantiated by other studies both in Bangladesh and in other countries.