A SOCIAL AND FINANCIAL ASSESSMENT OF MICROFINANCE FOR THE EXTREME POOR : A CASE STUDY FROM BANGLADESH

Abstract: The study tries to look at the impact of microfinance on the lives of the extreme poor people. There are different views on microcredit/microfinance as a powerful development tool regarding its success in developing the lives of the extreme poor and sometimes these views are contradictory. The purpose of the study was to observe the social and financial changes that have occurred also with an effort to find out the causes of success or failure. The study was conducted in a community of extremely poor indigenous people living in a village of the north-western part of Bangladesh. The study was based on interview, case study, and observational information collected during a four-week fieldwork period in the village. The findings show that vulnerability and income security plays a major role in the success of microcredit for the extreme poor. Though it helps to smooth consumption and improve living standard for the extreme poor vulnerability, risk and lack of skill in microcredit management by the clients cause chronic loan dependency.