Impact of Grameen Bank Financing on the Rural Poor in Bangladesh

Abstract

Grameen Bank (GB) provides micro finance facilities to people in rural regions so they can use the funds for productive work and become financially stable and independent. Since 78.3% (Report of the Post Enumeration Check of the Population and Housing Census: 2011: 23) of the population still lives in villages, the development of rural Bangladesh depends largely on the development of the poor villagers. The financial position of people in rural Bangladesh is tied to several monetary functioning related variables such as annual income, amount of own capital, total income from business sectors, expenditure of business sector, total income from agriculture sector, total expenditure of agriculture sector, cost of living and amount of annual bank savings. Income and expenditure of other sources also have a vital impact on the cost of living of the respondents included in the sample. Therefore, in this paper, we attempt to explore the impact of other variables on the respondents‟ cost of living. Consequently, it has been found that the cost of living of the respondents depends only on the loan amount received from micro financing institutions.

Keywords: Grameen Bank; Financing; Rural Poor; Monetary Functioning Related Variables

Australian Academy of Accounting and Finance Review, vol 2, issue 1, January 2016, page 76-90