The very poor who participate in microfinance institutions and those who never did: a comparative analysis

Despite the general consensus that the very poor have not been adequately reached by existing microfinance institutions, very little focussed research exists on the financial market participation of the very poor in general and their microfinance institutions (MFI) participation, in particular. In t...

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Autor principal:	Matin, Imran
Formato:	Research report
Lenguaje:	English
Publicado:	BRAC 2019
Materias:	Extreme poor Microfinance institutions BRAC Microfinance > Bangladesh. Financial services industry > Bangladesh.
Acceso en línea:	http://hdl.handle.net/10361/13140

id	10361-13140
record_format	dspace
spelling	10361-131402019-11-27T21:01:09Z The very poor who participate in microfinance institutions and those who never did: a comparative analysis Matin, Imran Extreme poor Microfinance institutions BRAC Microfinance--Bangladesh. Financial services industry--Bangladesh. Despite the general consensus that the very poor have not been adequately reached by existing microfinance institutions, very little focussed research exists on the financial market participation of the very poor in general and their microfinance institutions (MFI) participation, in particular. In this paper, we shed some light on these issues by comparing the very poor who manage to participate in microfinance institutions and those who never did, by making use of a unique dataset that emerged out of the baseline study of a new BRAC programme targeted at the very poor. We find that the poorest who participate in MFIs are relatively better off than those who never participated, the causal relationship is not clear. In that sense, the targeting exclusion condition used by BRAC to exclude the poorest who were members of MFIs seems to be appropriate. However, we also find that the poorest who participate in MFIs also borrow more from informal sources suggesting that a complementary, rather than a substitution relationship exists between the two sources of finance. Moreover, the intensity of microcredit taking is lower and tendency to drop out from one and not rejoin other MFIs is higher among the very poor who participate in MFIs compared to MFI participants coming from other poverty grou ps. Given that reaching the very poor remains to be an important challenge that the global microfinance industry intends to address, a better understanding of the overall financial market participation of the very poor and exploring the differences between the very poor who manage to participate in microfinance programmes and those who do not can be important for guiding policy and practice. 2019-11-27T10:32:10Z 2019-11-27T10:32:10Z 2004 Research report Matin, I. (2004). The very poor who participate in microfinance institutions and those who never did: a comparative analysis. Research Reports (2004): Economic Studies, Vol - XXI, 131–140. http://hdl.handle.net/10361/13140 en application/pdf BRAC
institution	Brac University
collection	Institutional Repository
language	English
topic	Extreme poor Microfinance institutions BRAC Microfinance--Bangladesh. Financial services industry--Bangladesh.
spellingShingle	Extreme poor Microfinance institutions BRAC Microfinance--Bangladesh. Financial services industry--Bangladesh. Matin, Imran The very poor who participate in microfinance institutions and those who never did: a comparative analysis
description	Despite the general consensus that the very poor have not been adequately reached by existing microfinance institutions, very little focussed research exists on the financial market participation of the very poor in general and their microfinance institutions (MFI) participation, in particular. In this paper, we shed some light on these issues by comparing the very poor who manage to participate in microfinance institutions and those who never did, by making use of a unique dataset that emerged out of the baseline study of a new BRAC programme targeted at the very poor. We find that the poorest who participate in MFIs are relatively better off than those who never participated, the causal relationship is not clear. In that sense, the targeting exclusion condition used by BRAC to exclude the poorest who were members of MFIs seems to be appropriate. However, we also find that the poorest who participate in MFIs also borrow more from informal sources suggesting that a complementary, rather than a substitution relationship exists between the two sources of finance. Moreover, the intensity of microcredit taking is lower and tendency to drop out from one and not rejoin other MFIs is higher among the very poor who participate in MFIs compared to MFI participants coming from other poverty grou ps. Given that reaching the very poor remains to be an important challenge that the global microfinance industry intends to address, a better understanding of the overall financial market participation of the very poor and exploring the differences between the very poor who manage to participate in microfinance programmes and those who do not can be important for guiding policy and practice.
format	Research report
author	Matin, Imran
author_facet	Matin, Imran
author_sort	Matin, Imran
title	The very poor who participate in microfinance institutions and those who never did: a comparative analysis
title_short	The very poor who participate in microfinance institutions and those who never did: a comparative analysis
title_full	The very poor who participate in microfinance institutions and those who never did: a comparative analysis
title_fullStr	The very poor who participate in microfinance institutions and those who never did: a comparative analysis
title_full_unstemmed	The very poor who participate in microfinance institutions and those who never did: a comparative analysis
title_sort	very poor who participate in microfinance institutions and those who never did: a comparative analysis
publisher	BRAC
publishDate	2019
url	http://hdl.handle.net/10361/13140
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The very poor who participate in microfinance institutions and those who never did: a comparative analysis

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