Microcredit Management in Bangladesh: A Comparative Analysis
Dr Mohd Sher Ali
Poverty alleviation through MicrocreditÖ
Bangladesh is the birthplace of microcredit. Different countries across the globe have adopted Bangladeshi microcredit model to alleviate poverty. A good number of studies have revealed that microcredit is a proactive tool to fight against poverty. Though the studies have conducted to explore the impact of microcredit but none of these focused on management system of microcredit program.
Realized its necessity, researcher Dr Mohd Sher Ali, a Joint Secretary of the People's Republic of Bangladesh conducted a study to show in which dimension the private sector and public sector microcredit organization are performing best in microcredit management.
In February 2019, Fairplay Publications published the study as a book titled "Microcredit Management in Bangladesh: A Comparative Analysis". The book has been written based on author's PhD thesis submitted to University of Dhaka. In this book author has depicted management system of microcredit comparing between public and private sector microcredit organization in Bangladesh.
The book is divided into nine chapter including abstract, acknowledgement, abbreviation, references and appendices. The first chapter of the book is introductory chapter in which the author discussed background, importance, objectives, rationale, conceptual framework, methodology, sampling, data analysis, limitation, etc. In the second chapter author reviewed related literature and presented the gaps to justify to conduct the present study. In this chapter he mentioned that no specific and in-depth research has so far been conducted on comparative analysis of microfinance/microcredit management.
No research has been conducted to design a uniform or near to uniform management system. The income change of the borrowers has not been identified in any of the studies in comparison between public and private sectors. These gaps of the previous researches justified the need of the present study.
In third chapter the author evaluated development approaches and strategies for poverty alleviation in Bangladesh. In this chapter he discussed definition and measurement of poverty, overview of poverty scenario in Bangladesh, strategies for alleviation of poverty in Bangladesh, development approaches and impact on quality life of loanees, etc.
Fourth chapter of the book titled an overview of microcredit situation in Bangladesh. In this chapter the author described the history, necessity and management approach of microcredit in Bangladesh. He also depicted historical perspective and situation of microcredit in the context of Bangladesh.
In chapter five the author discussed on public sector microcredit in Bangladesh. Sources of public sector microcredit, microcredit statistics of selected GOs and NGOs, situation of public sector microcredit, government initiatives, microcredit programmes of different ministries and division, microcredit programmes of schedule banks, agricultural credit, etc.
The author described on private sector microcredit in Bangladesh in chapter six. In this chapter he discussed about sources of microcredit, selected indicators of NGO-MFIs, composition of fund in private sector, situation of private sector microcredit, microcredit of large NGOs including Grameen Bank, microcredit programmes of banks and specialized banks, etc.
In chapter seven the primary data regarding microcredit management and its impact have been analyzed in detail. Supports need to improve the livelihood, microcredit management comparison, credit overlapping and comparative advantages of public and private sector microcredit etc. have also been analyzed here.
Chapter eight of the book presented summary and findings of the study. In chapter nine the author put some recommendations, suggestions and direction for future research in this field. It is found that microcredit increases the socio-economic status of the borrowers and the borrowers increase their income utilizing microcredit. Private and public sector microcredit organizations established a parallel money market in the rural areas, which is actually the better replacement of usurious money lenders. Group based activities and changed livelihood have increased the social empowerment of the borrowers. Rural level capital formation through institutional savings is a significant development in rural economy and positive change of development indicators means the borrowers' livelihood is on the positive track.
The author has mentioned in his book that microcredit has a host of positive impacts on families that receive it and also affects the aggregate welfare at village level. Microcredit is an effective and powerful tool for rural development, income generation, food security, women empowerment, human resource development and ultimately poverty alleviation. On the other hand he also mentioned, "It is also true that experience has shown that while microcredit is useful tool to fight poverty, it alone is not the answer. Contrary to some microfinance evangelists' belief, microcredit is also no magic for development". These findings are one of the strength of the book.
Thus, this treasure of knowledge, guideline of intellectually stimulating, collection of 'inclusive thoughts' is an excellent edition in microcredit literatures would be helpful for the people and organization who are implementing microcredit/microfinance programme in Bangladesh. It would be most helpful for those who are engaged in public and private sector microcredit management. This is a must readable book for the development workers, researchers and learners.
Reviewers Dr Matiur Rahman is Research Consultant, Human Development Research Centre (HDRC), Dhaka and Salim Reza is an Essayist & Research Associate, Human Development Research Centre (HDRC), Dhaka