Micro-credit and the reduction of poverty in Bangladesh

Abstract

This article explores the relationship between micro-credit and the reduction of poverty by looking at a unique data set about BRAC, one of the largest micro-credit providers in Bangladesh. The article shows that the majority of population in the data set lived below the poverty line and that poverty was slightly more prevalent among households receiving BRAC credit than among similar non-BRAC households. Moreover, regression results suggest that BRAC's micro-credit program has had an insignificant impact on household consumption. Overall, the analysis in the article leads to the conclusion that micro-credit had minimal impact on the reduction of poverty.