Microfinance Works as a Tool for Poverty Reduction in Rural Bangladesh

Abstract

Introduction: According to the World Bank, poverty is measured by income. Bangladesh uses microcredit as an anti-poverty tool for reducing poverty. The aim of the study is to find out the impact of microcredit on poverty reduction in rural Bangladesh. Methods: This study run by following qualitative and quantitative research process based on secondary data recorded from 2002 to 2012. Study data as number microcredit borrowers have been calculated from Microfinance Information Exchange (MIX) Market Database and rest of the data are collected from the World Bank, Household Income & Expenditure Survey Report and relevant literatures. Result: Microcredit has an impact on the income poverty reduction. During the last decade, income poverty had reduced 1.5% in Bangladesh. So, MFIs are not necessary for reducing poverty because if income is increased, it depends on the poor people how they will utilize their money. Conclusion: From this study we found that microfinance can reduce the poverty by giving credit loan and generating income.