Proceedings of 4th Global Business and Finance Research Conference
25 - 27 May 2015, Marriott Hotel, Melbourne, Australia
ISBN: 978-1-922069-76-4
Risks in Micro-Finance Programs for Alleviating Poverty in
Bangladesh
Nilufa A. Khanom
Poverty is the most daunting problem to achieve the sustainable development in
Bangladesh. The Government of Bangladesh thus has introduced various initiatives
involving NGOs to address the problem of poverty and thus to achieve sustainable
development. The Rural Micro Credit (RMC) program of the Palli Karma-Shahayak
Foundation (PKSF) is one of important poverty alleviation initiatives. Although, the
effects of the micro-finance programs are well-known for numerous positive
outcomes in Bangladesh, it yet involves several risks.
This article attempts to explore different risks involved in the Rural Micro Credit
(RMC) programs of the PKSF in alleviating poverty in Bangladesh. To explore the
risks in the micro-finance programs, this research employed semi-structured
interviews with 46 respondents from different levels who were involved in designing
and implementation of the RMC programs. The respondents included fifteen
government officials, two experts, five PKSF executives, five NGO executives and
eight field level employees. The research also interviewed eleven RMC beneficiaries.
The qualitative data were collected from July 2009 to June 2010 and revisited in
2012 with 19 interviews of beneficiaries; and analysed using content analysis.
The research identified several risks involved in micro-finance programs that limit the
success of poverty alleviation in attaining sustainable development in Bangladesh.
The risks identified by the respondents were political risks, policy risks, economic
risks, management risks, financial risks, natural risks and personal risks. Political
risks, for example, included item such as lack of political commitment of the
government. The research also discovered that the risks are interrelated that further
affect the success of the micro-finance programs.
Key words: Poverty alleviation, Micro-finance, Risks and Bangladesh.
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Dr. Nilufa Akhter Khanom, Lecturer, College of arts, Victoria University, Melbourne, Australia,
Email: Nilufa.Khanom@vu.edu.au, Nilufa.khanom@yahoo.com.au