Exploring Multidimensional Poverty and Microfinance Programmes Impact: Poverty Alleviation In Rural Bangladesh.

Abstract: This paper examines multidimensional poverty and the effectiveness of microfinance loans in alleviating it using household survey panel data on Bangladesh. Microfinance is an innovative method to financial development of the poor, yet controversial. Several studies investigate this subject matter from a single-dimensional perspective, although, it is generally known that the primary concept of poverty is multidimensional. Hence, this paper extensively contributes to the empirical literature by exploring a multidimensional poverty measure (HMP) using three main dimensions: living standards, education and health. HMP is generated as a binary dependent variable, therefore making maximum likelihood estimation with a logit model approach the appropriate estimation technique. The household fixed-effect findings from this study show that microfinance loans are positively insignificant on the odds that poor households in rural Bangladesh escape multidimensional poverty. Nonetheless, there is an enormous impact (2.4380 odds ratio equivalent to about 144%) on living standard deprivation, which comprises of per capita consumption, land and non-land assets: Increase in the probability that poor households will improve living standard conditions after acquiring the small loans.