Impact of microcredit on poverty alleviation among rural women: A case study of Panchagarh District in Bangladesh

Although women constitute almost half of the total population of Bangladesh, they experience adverse situations in terms of socio-economic inequality and gender disparity. Especially, rural women are the most deprived section of the society and a majority of them are extremely poor. They have very limited access to economic and income generating activities outside their home and consequently, the less opportunity to contribute to their families and get out of poverty. MFIs are contributing significantly to poverty reduction in Bangladesh by creating income generation and self-employment opportunities for the poor people by providing microcredit. This study attempts to assess the role of microcredit programme in reducing poverty of rural women. The study is based on empirical data collected through interview from the two groups of rural women e. g. 'with credit' and 'without credit' rural women. The 'with credit' respondents are the members of microcredit programme of Grammeen Bank, one of the largest MFIs in Bangladesh. The findings demonstrate that, the 'with credit' women have a much lower percentage of poverty in terms of its incidence (80%), intensity (28%) and severity (12%) compared to the 'without credit' respondents (99, 59 and 37% respectively). It was also found that educational attainment of the respondents and income earners in the family contribute positively to reduce poverty situation among the 'with credit' households more, as compared to 'without credit' households. Therefore, it can be concluded that microcredit programme helps the rural women to reduce their poverty more effectively.