Assessment of the Role of Micro-credit in the Development of Social Capital : A Field Study about Micro-credit Programme Clients in Bangladesh

Abstract: The aim of the study is to investigate how does the micro-credit does, small scale loans to poor people, work in poverty alleviation and building social capital in rural Bangladesh. The major objective of the study is to show how the NGO activities help to increase women's access to micro-finance, generate new income earning opportunities, and to enhance social mobilization and create formal network, norms and trust for collective action and thus develop social capital. The empirical study is conducted in Bangladesh to assess the increase of women's economic opportunity, security and empowerment and their effect on poverty and changes in the traditional rural social structure. Based on both qualitative and quantitative survey research, the study has organized in-depth interviews and focus group discussion with the programme clients of the two NGOs in Bangladesh. The findings suggest that, microcredit and its supportive programs have lead to a remarkable enhancement in social network formation and development, an improved status in family and community, increased mobility and to some extent also greater self-confidence and feeling of identity for the women. It also has given space to establish and strengthen social ties that reach beyond their familia networks. This process has been nurtured by NGO membership norms at the centre building. Emboldened with the awareness of self-identity beyond kinship ties, women then began to build a collective identity with an extra-familial "face to face" effective group beyond her small locality. These self-identified components of social capital have expanded each woman's life options and introduced new social opportunities for the group. Interaction at the centre has graduated into new and strengthened networks while mobility has given each woman a socially sanctioned license to move about the village and, therefore, the opportunity to call on and continue to build her networks. Perhaps, social implications of micro-credit lending system are more powerful than the economic implications. Sustainable economic and social prosperity seems to be cultivated by regular and frequent interaction and have enabled women to continue to prosper through trust and community cooperation networks long after the initial acquisition of financial capital. The collective nature of group lending NGO style has proved it's far reaching implications on rural women's ability to build social capital