Microfinance Customer (Borrower) Experience towards the Effectiveness of MFIS in Bangladesh: An Exploratory Analysis

Mohammad A. Ashraf, Muhammad S. I. Noor


Microfinance initiative is widely acclaimed as an approach to raise income level, alleviate poverty and bring about development, but recently the effectiveness of the microfinance programs has been appeared to be a focus of debate in microfinance literature. An exploratory survey was conducted to analyze the microfinance customers’ (borrowers’) perception about the microfinance schemes adopted by different microfinance institutes (MFIs) in Bangladesh. This study covered only three MFIs such as Grameen Bank (GB), Bangladesh Rural Advancement Committee (BRAC) and Association for Social Advancement (ASA). Convenience sampling technique was adopted in data collection process. The customers were asked to evaluate different objects selected in the questionnaire. The respondents ranked the attributes on a number of itemized five-point scale ratings bounded at each end by one of two bipolar adjectives. Based on the study, borrowers’ experience suggests that income level has not been increased. This implies that MFIs are not effective to achieve their objectives of raising income and reducing poverty. It also shows that the factors such as membership criteria, costs of credit, income level and religious restrictions are observed significant to affect microfinance consumer experience in Bangladesh.

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