Does Micro-credit Program in Bangladesh Increase Household’s Ability to Deal with Economic Hardships?

Abstract

It is often argued that micro-credit program intervention at the grassroots level increases the ability of the poor to deal with crises. This paper examines the relationship between households’ involvement in micro-credit programs and their capacities to deal with economic hardships by focussing on BRAC, one of the largest micro-credit providers in Bangladesh. Using RAND data collected in one region of rural Bangladesh, the paper addresses a key question: Do micro-credit programs increase the ability of the poor to deal with crises? The findings in this paper indicate that BRAC’s micro-credit program in Bangladesh may increase participating households’ abilities to cope with economic hardships but further research to much more systematic information needs to be conducted about micro-credit program before conclusive results can be reached.Micro-credit, Economic Hardships, Rural Bangladesh