The Effect of Microcredit on Standards of Living in Bangladesh

Fattah, Shafin

This paper asks a simple question: do microcredit programs positively affect the standard of living of poor households with little or no land ownership? Access to credit at favorable terms is likely to increase the number of economic opportunities available to a rural household. I use a fixed effect regression model to explore panel data on 855 households from Bangladesh compiled from an extensive household survey conducted between 1991 and 1999. I explored seven representative measures for different aspects of standard of living: household per capita weekly non-food expenditure, household per capita weekly food expenditure, household non-land asset ownership, household female non-land asset ownership, household landholding, highest number of years of education of any household female, and highest number of years of education of any household male. The results suggest that microcredit program participation had positive impact on per capita food expenditure, landholding, and women’s ownership of non-land assets. Microcredit seems to have had no significant, positive impact on overall household non-land asset accumulation and educational attainment.


Also Published In

The Journal of Politics and Society

More About This Work

Academic Units
Helvidius Group
Helvidius Group of Columbia University
Published Here
August 10, 2015