Project proposal on

Role of Microcredit in Women Empowerment: A Study on

Borrower in Noakhali.

Prepared for,

Dr SM Nazrul Islam
Associate Professor, & Chairman
Department of Business Administration
Noakhali Science & Technology University

Submitted by,
Sushanta Kumar Dalal
ID: ASH1610013M
Session: 2015-2016
Department of Business Administration
Noakhali Science & Technology University
Introduction
Micro-credit is a system of small loans for income-generating activities, which enable poor
communities to gain some economic stability. The system is carefully planned to provide people
with the resources they need to improve their economic status, without encouraging debt. Micro
credit is one of the most important factors for enhancing socio-economic development of the
rural poor. Besides, GOs, NGOs play the most important role in distributing micro credit to
clientele to overcome poverty and helping the poorer sector to uplift their situations that are
living below the poverty line. Micro credit is considered now not merely an instrument for credit
extension to the poor borrowers but also a movement to emancipate the poor--especially
women--to alleviate their poverty, improve their quality of life, build their capacity and
awareness, to integrate them economically and socially into the mainstream of the economy.

In recent years, governmental and non-governmental organizations in many countries have

introduced micro-credit programs targeted at the poor. Many of these programs specifically
target women based on the view that they are more likely than men to be credit constrained, have
restricted access to the wage labor market, and have an inequitable share of power in household
decision-making.
In Bangladesh micro-credit has come a long way since its start by Professor Yunus, Managing
Director of Grameen Bank, in 1974 in Jobra, a village in Chittagong of Bangladesh. The strength
of micro-credit lies in its ability to organize idle women into a productive workforce with their
proven creditworthiness (Chavan and Ramakumar, 2002).
This paper will estimate the impact of participation in micro-credit programs on a large set of
qualitative responses to questions that characterize women’s autonomy (Economic) and gender
relations within the household. The data will be collected by household survey in rural
Bangladesh in 2021 at Noakhali district, chattagram, Bangladesh. I will test the assertion that
participating in micro-credit programs is an empowering experience for women whose life
choices are otherwise restricted through poverty and societal norms.

Objectives of the study

The study will basically represent the impact of micro-credit loan on women in Bangladesh,
specially women living on rural area. This will show how much changes have taken places in
financial status, decision making ability, employment rate of women of this territory after having
a micro-credit loan.
Justification
Micro finance is needed for the countries like Bangladesh. This kind of finance is mostly used to
reduce poverty from the rural area and financial safety. But in our country (Bangladesh) the use
of micro finance is not focused on poverty reduction. The borrowed money is not used in proper
way. The rural women are not also concerned about its use and proper education and proper
management is not also be taken from the NGO’s about credit management. This finding will
articulate the level of necessity of micro credit loan for women.
Some studies (like (Habib and Jubb, 2012)) support that significant improvements in women’s
socio-political empowerment due to microcredit loans to women, while others studies (like
Hashmi, 2012 & Melik, 2010) assert that microcredit is neither a solution to poverty nor a tool
to empower women. This study will help to find out the exact answer of this argue.

Literature Review:
Women empowerment is now top priority issue in developing country , even on the developed
country too. Bangladesh has been ranked the top country among its South Asian neighbours by
performing the best in bringing down gender gap, World Economic Forum said in its latest
report. Bangladesh closed 72.6% of its overall gender gap and obtained 50th position out of
153 countries globally.( 'Global Gender Gap Report 2020, WEF').
Micro-credit is a strong tool for women empowerment. (kessey 2005). According to finding
there appears a gap between the optimistic social belief about the power of micro credit to
support decision making, social status and empowerment of women and the reality. (Jos
Vaessen july 2013)
There are four types of institutions involved in micro-finance activities:
1) Grameen Bank (GB), a member owned specialized institution,
2) 1500 Non- Governmental Organizations (NGO) like BRAC, Proshika, ASA, BURO-Tangail,
BEES, CODEC, SUS, TMSS, Action- Aid etc.
3) Commercial and Specialized banks like Bangladesh Krishi Bank (BKB), Rajshahi Krishi
Unnayan Bank (RAKUB) and
4) Government sponsored micro finance projects/ Programs like BRDB, Swanirvar Bangladesh,
RD-12 and others which are run through several ministries viz., Ministry of Women & Children
Affairs, Ministry of Youth & Sports, Ministry of Social Welfare etc.
These four kinds of institutions has Total loan disbursement (cumulative) till December 2001 of
taka 434.55 billion; In this disbursement under Government program was taka 37.77 billion
(8.69%), Grameen Bank disbursed taka 154.11 billion (35.46%), other Banks and MF-NGOs
disbursed taka 78.41 billion (18%) and taka 164.26 billion (37.80%) respectively (figure-1).
Recovery rate of all these organizations excluding formal banks and government sponsored
programs stood at 95 percent.
Grameen Bank (GB) has reversed conventional banking practice by removing the need for
collateral and created a banking system. Now it has 9.60 million members, 97 percent of whom
are women. They introduced the term grameen credit which targeted people are women.
Brac, a leading micro credit provider in Bangladesh, total client of micro credit was 7.1 million,
87% of them was women and they have distributed USD 4 billions . (annual report of Brac 2018)

ASA was founded in 1978 and is a non-governmental organization which work for poverty
reduction.
ASA had 5.5 millions of microcredit members, 71% of them are women. It has topped the
famous US-based magazine’s first-ever list of 50 top MFIs considering Scale, Efficiency, Risk
and Returns. The top 50 MFIs were chosen out of 641 micro-credit providers across the globe.

Methodology:
Sample households of Noakhali district will be used to analyze the role of microfinance in
women empowerment. The study will be a descriptive in nature and based on both primary and
secondary data. Analyzed data will help to answer the research objectives The methodology
includes statistical tools such as mean, standard deviation, correlation of coefficient and
regression equation model with the help of SPSS. Random sampling technique will be used to
collect the primary data from 100 sample households of Noakhali district.
A questionnaire will be built here to collect the data from the users of micro-credit. Objectives
will be focused at the time of developing the questionnaire. Further corrective actions could be
taken in need.
The primary data will be collected from face to face conversation and the secondary data will be
collected from the Annual reports of ASA ,Grameen Bank, journals, project papers and different
websites.
Primary data and secondary data will be collected during the month of February 2021.

Reference:
Ather, S M and Solaiman, M. (1995), “Human Resource Development (HRD)
Practices in Bangladesh-A case study on some selected firms in Chittagong, Chittagong
University Studies (Commerce), volume IX, P.19 -37

Shamsuddoha, Mohammad, Micro Credit Program of Selected NGOs: An Empirical Study on

Rural Women of Comilla District in Bangladesh (February 10, 2009). Available at SSRN:
https://ssrn.com/abstract=1340542 or http://dx.doi.org/10.2139/ssrn.1340542
ASA bank annual report 2018 http://www.asa.org.bd/AnnualReport/ASA%20Annual
%20Report%20a%20to%20z%202018-19.pdf
Microfinance in Bangladesh : Paper for the SAARCFINANCE Seminar on Microfinance
21-23 December 2002, Dhaka, Bangladesh., Bangladesh Bank
https://www.bb.org.bd/saarcfinance/seminar/cpbdesh.php