Micro credit

Micro Credit experience and lessons in Bangladesh

Bangladesh, a country that was once internationally identified and derided as ‘bottomless basket’

is now known as the ‘motherland of micro credit’ or ‘university of micro credit’. Micro finance sector in

Bangladesh is relatively advanced in the world and has gone to earn global fame. Here, micro finance /

micro credit may be defined as “a small loan size with collateral free, short processing time, reasonable

delivery cost, easy installment repayment to the advantage of the loanee, disadvantaged target members. preferably distressed woman, supervised institutional structure, culture of sympathy and compassion, etc”.

Bangladesh government has always been supportive of micro credit programs/projects in both GOand NGO sectors. As many as 14 ministries and 26 department/agencies and hundreds of NGOs (15,000

registered with government’s NGO Bureau) and handful of financial institutions serve more than 12.5

million clients across the country. At present estimated effective target households for micro credit are

about 15 million (2,100 K calories). The hard-core poor (1,800 K calories) constitutes about 25 per cent of the total households. But there is a sub-set of the hard-core poor called the ultra hard-core poor or destitute that constitute approximately the bottom 10 per cent of the population i.e., around 3 million households who have been excluded from micro credit programs for various reasons. Total membership and borrowers under various organization are about 13 million and 12.5 million respectively. But by excluding 15 per cent overlapping the actual membership of borrowers stand about 9 million households.