Determinants of Microfinance performances in Bangladesh: The case study of Rural Development Scheme and Muslim Aid Bangladesh

Abstract

Microfinance programs have been designed for the poor people to access the formal financial system easily without any collateral. From the beginning, microfinance programs are trying to reach the poor people to improve their living standard through income generating activities. Following this objective, Rural Development Scheme (RDS) and Muslim Aid Bangladesh (MAB) is working with poor vulnerable people to improve their socioeconomic standard through delivering interest-free microfinance in Bangladesh. This study is, therefore, aims to examine the determinants of microfinance performance in Bangladesh. Towards the achievement of its objective, this study used qualitative techniques. To assess the determinants, primary data were collected from 192 borrowers from Chittagong district of Bangladesh. The quota sampling method was followed to select the clients. The findings revealed that RDS and MAB have been trying to provide the handsome amount of loan, training, to the clients to run their business though the amount of loan and training was not sufficient. Determinants, time duration with microfinance, client’s age and education level was found in the acceptable range but there are some issues need to be considered according to client’s needs.