Role of Microfinance in Sustainable Development in Rural Bangladesh

Here, the effects of length of microfinance borrowing, service provider and other factors on microfinance participation and outcomes in Bangladesh are investigated. Data were collected from 300 microfinance respondents using face-to-face semi-structured interviews. Descriptive and econometric statistics were used for data analysis. The financing authorities gave preference to rural, powerless, illiterate and poor people in all groups of candidates. Spillover effects were minimized by considering endogeneity, attrition bias and unobserved bias. The fixed effect instrumental variable method was used to show that the microfinance effects changed over time, i.e. were greater in historical borrowing than in more recent borrowing. Farm size, repayment behavior, savings amount per week and annual household income were identified as significant factors that influenced recipients' effective participation in the microfinance program. Copyright (C) 2015 John Wiley & Sons, Ltd and ERP Environment