Microcredit in Bangladesh: Impact on Borrowers’ Social Mobility Revisited

In Bangladesh, microcredit program has been in function for almost half a century. Though popularly termed as a tool for poverty alleviation and women empowerment, criticism about microcredit program’s actual effectiveness isn’t new. This study attempts to evaluate the impact of such programs by measuring borrowers’ social mobility. Using a multidimensional approach, indicators like household income, economic susceptibility, living conditions, consumption pattern, children’s education, healthcare facilities, women’s participation in decision-making were taken into account for measurement. Quantitative method was used. Based on a non-probability sampling, 107 microcredit borrowers were selected for conducting interview schedules who live in a rural, a semi-urban and an urban area. Statistical analysis of data reveals that those who have been taking loans for several number of years have all managed to increase their income level to a variety of extent, but only those have gained some sort of mobility who have been taking loans for more than 4-5 years and have taken 5 times or more. Few of them have actually moved from microcredit to become a microfinance client by taking bigger amount of loans and having savings. Positive responses about the indicators being used in the study were found among the handful of those who have mobilized significantly. In true sense, most of the borrowers are stuck at the bottom end of socio-economic ladder and are struggling to manage a better living standard.