Impact of Microcredit on the Rural Poverty Alleviation in Bangladesh: An Evaluation

Abstract

The 21st century global development economy has been enriched and enlightened with the rapid expansion of microcredit (MC) that works for eradicating poverty and promoting human potentiality in order to build a poverty-free better world for the upcoming generations. The thousands of millions of MC members especially the downtrodden, destitute, rural poor women are fighting against poverty and changing their fate with the help of MC. For this reason, the scientist community and the climate expert groups of the world including Intergovernmental Panel on Climate Change (IPCC) have also recommended microcredit for reducing climate vulnerability and educating climate adaptation (Cannon, 2002; Fenton et al. 2017; Heltberg and Jorgensen, 2009; Hammilli, et al. 2008, IPCC, 2001). The principal objective of this study is to examine the impact of microcredit on the rural poverty alleviation in Bangladesh. For doing this examination, an integrated theoretical framework, has been developed based on the previous related literature review. All items of the framework have been adapted from the related studies. A field survey was conducted amongst 430 respondents across the whole Bangladesh. Partial least square (PLS)-structural equation modeling (SEM) was deployed for examining the validity of the theoretical framework and testing the hypotheses. The research model of this study was tested using the SmartPLS 4.0. The research model test was constructed with two stages—one is measurement model test and another is structural model test (Crocker, L. and Algina, J. 1986 and Hair, J.F. et al. 2009). Measurement model and structural model tests were dully measured. Besides these tests, eight case studies, selected one case from each division of Bangladesh, and descriptive analysis, social-cost benefit analysis (SCBA) were also done. There are 9 hypotheses in the study. All of them have been accepted in the hypotheses test. As an advanced test, specific indirect effects were also tested for making the analysis more perfect, credible and acceptable. The result of hypotheses test is given below: