Micro-finance supports mainly informal activities that often have low market demand. It may be thus hypothesized that the aggregate poverty impact of micro-finance in an economy with low economic growth is modest or nonexistent. The observed borrower-level poverty impact is then a result of income redistribution or short-run income generation. The author addresses these questions using household level panel data from Bangladesh. The findings confirm that micro-finance benefits the poorest and has sustained impact in reducing poverty among program participants. It also has positive spillover impact, reducing poverty at the village level. But the effect is more pronounced in reducing extreme rather than moderate poverty.

Microfinance and poverty - evidence using panel data from Bangladesh

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Microfinance and poverty : evidence using panel data from Bangladesh

Providing microcredit to the poor has become an important antipoverty scheme in many countries. Microcredit helps the poor become self-employed and thus generates income and reduces poverty. In Bangladesh, these programs reach about 5 million poor households. This books attempts to find out whether these programs cost-effective, drawing on the experiences of the well-known microcredit programs of Bangladesh's Grameen Bank, the Rural Development-12 projects, and the Bangladesh Rural Advancement Committee. It examines the cost-effectiveness of microcredit programs vis-�vis other antipoverty programs, such as Food-for-Work. Moreover, the book uses extensive household survey data to address how the gender of participants affects the impact of microcredit programs.

Fighting poverty with microcredit : experience in Bangladesh

Impact assessment methodologies for microfinance: Theory, experience and better practice

This book is part of a larger effort undertaken by the World Bank to understand the development experience of the 1990s, an extraordinary eventful decade. Each of the project's three volumes serves a different purpose. Development Challenges in the 1990s: Leading Policymakers Speak from Experience offers insights on the practical concerns faced by policymakers, while At the Frontlines of Development: Reflections from the World Bank considers the operational implications of the decade for the World Bank as an institution. This volume, Economic Growth in the 1990s: Learning from a Decade of Reform, provides comprehensive analysis of the decade's development experience and examines the impact of key policy and institutional reforms of growth. Economic Growth in the 1990s confirms and builds on the conclusions of an earlier World Bank book, The East Asian Miracle (1993), which reviewed experiences of highly successful East Asian economies. It confirms the importance of growth of fundamental principles: macro stability, market forces governing the allocation of resources, openness, and the sharing of the benefits of growth. At the same time, it echoes the finding that these principles translate into diverse policy and institutional paths, implying the economic policies and policy advice must be country-specific and institutional-sensitive if they are to be effective. The authors examine the impact of growth of key policy and institutional reforms: macroeconomic stabilization, trade liberalization, deregulation of finance, privatization, deregulation of utilities, modernization of the public sector with a view to increasing its effectiveness and accountability, and the spread of democracy and decentralization. They draw lessons both from a policy and institutional perspective and from the perspective of country experiences about how reforms in each policy and institutional area have affected growth.

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Economic growth in the 1990s : learning from a decade of reform

Providing affordable credit to the rural population has long been a prime component of development strategy. Governments and donors have sponsored and supported supply-led rural finance institutions both to improve growth and equity and to neutralize or mitigate urban-biased macroeconomic policies. But because of high risks, heavy transaction costs, and mounting loan losses, many of the programs have drained state resources to little purpose, reaching only a small part of the rural population and making little progress toward self-sustainability. There are, however, a few success stories. This article reviews the policies, modes of operation, incentives, and financial performance of four publicly sponsored programs in Asia that are widely perceived to be successful, to find out what economic, social, and institutional factors contribute to their success.

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What makes rural finance institutions successful

This report is intended to serve as a sourcebook to aid decisionmakers as they create environments conducive to the development of rural financial markets. As a sourcebook, it explores both the traditional and new approaches that governments have taken to rural finance. First, the report outlines the traditional approach to rural finance, which relied heavily on supply-led, state-- owned agricultural credit institutions. Second, it highlights how widespread, urban-based policies impeded rural development and the promotion of rural financial markets. These policies included overvalued exchange rates, inflexible price controls on food produce, underinvestment in rural infrastructure, and protection of domestic industries against import competition. The report then illustrates the emerging new approach, which focuses on creating a favorable policy environment in terms of the macroeconomy, agricultural and financial sectors, rural development, and the legal and regulatory framework. Moving to the institutional level, the report offers two primary criteria -- outreach and self-sustainability -- as the bases for assessing the performance of rural financial institutions. It reviews and analyzes the modes of operation and performance of three successful rural institutions in Bangladesh, Thailand, and Indonesia. These three case studies provide insights for the design of future interventions.

Rural finance : issues, designs, and best practices

Developing Rural Financial Markets

Reforming finance in transitional socialist economies. How do market failures justify interventions in rural credit markets? What makes rural finance institutions successful? Animal health services: finding the balance between public and private delivery. The roles of the private and public sectors in enhancing the performance of seed systems. The impact of EC-92 on trade in developing countries. Is European integration bad news for developing countries? a comment on Hughes Hallett.

Jacob Yaron

Papers

What makes rural finance institutions successful

Rural finance : issues, designs, and best practices

Developing Rural Financial Markets

The World Bank research observer 9 (1)

Financiamiento rural: problemas, diseno y practicas optimas