Uses and users of MFI loans in Bangladesh

Abstract:

The author's study of the ‘financial diaries’ methodology provided unusual and valuable insights into how MFI loans are actually used and why. This is because they tracked the day-to-day activities of 53 village households over two or three years in great detail, helping them to construct ‘diaries’ of their financial lives. Unlike questionnaire-based surveys, and unlike rival ways of using case-studies, which depend on recall by the interviewees, this method allowed observation in real-time as people struggled to decide what to use their loans for, and then dealt with the consequences of their choices. This Grameen II note covers the methodology used in collecting ‘financial diary’ information from clients and provides the results of the study as well, focusing on how clients used the funds and for what purpose.

Tags: Microfinance, Grameen II, Portfolios of the poor, Impact assessment, Financial diaries, Micro pension, Group lending, MFIs, Microfinance institution, Mohammad yunus, Stuart Rutherford, Grameen bank, Bangladesh, South Asia