Publication:
Are Microcredit Borrowers in Bangladesh Over-indebted ?

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dc.contributor.authorFaruqee, Rashid
dc.contributor.authorKhandker, Shahidur R.
dc.contributor.authorSamad, Hussain A.
dc.date.accessioned2013-10-02T13:59:22Z
dc.date.available2013-10-02T13:59:22Z
dc.date.issued2013-08
dc.description.abstractMicrocredit programs in Bangladesh have experienced spectacular growth in recent years, with a growing number of borrowers availing credit from multiple microcredit agencies. There is a growing concern that if there are not sufficient returns to borrowing from microfinance institutions (MFIS), some borrowers might be taking loans that they will not be able to repay. A household may be considered over-indebted, for example, if its debt liability exceeds 40 percent of its income or assets. Using a long panel of household survey data from Bangladesh, the paper finds that some 26 percent of microcredit borrowers are over-indebted on this measure versus 22 percent of non-microcredit borrowers. Econometric analysis suggests that both MFI competition and multiple borrowing raise indebtedness. However, repeated borrowing, while it affects short-term liability adversely, does affect the long-term debt-asset ratio favorably. That is, repeated borrowing helps increase assets more than debt over time. Microcredit borrowers in Bangladesh are thus not necessarily over-indebted. But when borrowing is seen as protection against shocks such as floods even at the cost of being indebted, MFIs may offer micro-insurance schemes to safeguard borrowers against economic shocks.en
dc.identifierhttp://documents.worldbank.org/curated/en/2013/08/18111659/microcredit-borrowers-bangladesh-over-indebted-microcredit-borrowers-bangladesh-over-indebted
dc.identifier.doi10.1596/1813-9450-6574
dc.identifier.urihttps://hdl.handle.net/10986/16007
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 6574
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectACCESS TO CREDIT
dc.subjectADVERSE EFFECT
dc.subjectADVERSE SHOCKS
dc.subjectAGRICULTURAL BANKS
dc.subjectAGRICULTURAL DEVELOPMENT BANKS
dc.subjectARREARS
dc.subjectASSET RATIO
dc.subjectASSET VALUES
dc.subjectBANK OF ENGLAND
dc.subjectBANK POLICY
dc.subjectBANKRUPT
dc.subjectBIDS
dc.subjectBORROWER
dc.subjectBUFFER
dc.subjectCOMMERCIAL BANK
dc.subjectCOMMERCIAL BANKS
dc.subjectCONSUMER CREDIT
dc.subjectCONSUMER GOODS
dc.subjectCONSUMER PROTECTION
dc.subjectCONSUMPTION SMOOTHING
dc.subjectCONTROL VARIABLES
dc.subjectCREDIBILITY
dc.subjectCREDIT BUREAUS
dc.subjectCREDIT CONSTRAINT
dc.subjectCREDIT CONSTRAINTS
dc.subjectCREDIT LIMIT
dc.subjectCREDIT LIMITS
dc.subjectCREDIT MARKETS
dc.subjectCREDIT PROGRAMS
dc.subjectCREDIT RISKS
dc.subjectCREDITWORTHINESS
dc.subjectDEBT
dc.subjectDEBT CONTRACTS
dc.subjectDEBT LIABILITY
dc.subjectDEBT PAYMENT
dc.subjectDEBT PROBLEMS
dc.subjectDEBT RATIOS
dc.subjectDEBT SERVICE
dc.subjectDEBT SERVICING
dc.subjectDEBT SERVICING COSTS
dc.subjectDEBTS
dc.subjectDEFAULT CASES
dc.subjectDEFAULTS
dc.subjectDEMAND FOR CREDIT
dc.subjectDEMAND-SIDE FACTORS
dc.subjectDEPENDENCY RATIO
dc.subjectDEPENDENT
dc.subjectDEPENDENT VARIABLE
dc.subjectDEPENDENTS
dc.subjectDEPOSITS
dc.subjectDEPRESSIONS
dc.subjectDESCRIPTIVE STATISTICS
dc.subjectDEVELOPING COUNTRIES
dc.subjectDISBURSEMENT
dc.subjectDISBURSEMENTS
dc.subjectECONOMIC CRISIS
dc.subjectECONOMIC SHOCKS
dc.subjectENTREPRENEURSHIP
dc.subjectENVIRONMENTAL FACTORS
dc.subjectEXPENDITURES
dc.subjectEXPLANATORY VARIABLES
dc.subjectEXPOSURE
dc.subjectEXTERNAL FACTORS
dc.subjectFEDERAL RESERVE
dc.subjectFINANCIAL DISTRESS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL SERVICES
dc.subjectFIXED EFFECTS
dc.subjectFOREIGN CURRENCY
dc.subjectFOREIGN CURRENCY MARKETS
dc.subjectGOVERNMENT POLICIES
dc.subjectHOLDING
dc.subjectHOUSEHOLD DEBT
dc.subjectHOUSEHOLD DEBTS
dc.subjectHOUSEHOLD INCOME
dc.subjectINCIDENCE OF INDEBTEDNESS
dc.subjectINCOME GENERATION
dc.subjectINCOME-GENERATING ACTIVITIES
dc.subjectINCOMES
dc.subjectINDEBTED
dc.subjectINDEBTED HOUSEHOLDS
dc.subjectINDEBTEDNESS
dc.subjectINDIVIDUAL ACCOUNTS
dc.subjectINFORMAL LOANS
dc.subjectINSOLVENCY
dc.subjectINSOLVENT
dc.subjectINSTITUTIONAL ENVIRONMENT
dc.subjectINSTRUMENT
dc.subjectINTEREST RATE
dc.subjectINTEREST RATES
dc.subjectINTERNATIONAL BANK
dc.subjectINVESTMENT OPPORTUNITY
dc.subjectIRRESPONSIBLE BORROWING
dc.subjectJUDGMENT
dc.subjectJUDICIAL EFFICIENCY
dc.subjectLAND ASSET
dc.subjectLAND ASSETS
dc.subjectLEGAL ENVIRONMENT
dc.subjectLENDER
dc.subjectLENDERS
dc.subjectLEVEL OF INDEBTEDNESS
dc.subjectLEVEL OF REPAYMENT
dc.subjectLIABILITY
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY PROBLEMS
dc.subjectLOAN
dc.subjectLOAN AGREEMENTS
dc.subjectLOAN AMOUNT
dc.subjectLOAN APPROVALS
dc.subjectLOAN CONTRACTS
dc.subjectLOAN MATURITY
dc.subjectLOAN PAYMENT
dc.subjectLOAN PORTFOLIO
dc.subjectLOAN PORTFOLIOS
dc.subjectLONG-TERM BORROWING
dc.subjectLONG-TERM DEBT
dc.subjectMARKET INFORMATION
dc.subjectMATURITIES
dc.subjectMICRO CREDIT
dc.subjectMICRO-CREDIT
dc.subjectMICRO-INSURANCE
dc.subjectMICROCREDIT
dc.subjectMICROFINANCE
dc.subjectMICROFINANCE INSTITUTION
dc.subjectMICROFINANCE INSTITUTIONS
dc.subjectNATURAL DISASTERS
dc.subjectNET ASSETS
dc.subjectNET SAVINGS
dc.subjectOUTSTANDING LOANS
dc.subjectPAYMENT OBLIGATIONS
dc.subjectPAYMENT SERVICES
dc.subjectPORTFOLIO GROWTH
dc.subjectPOVERTY ALLEVIATION
dc.subjectPOVERTY REDUCTION
dc.subjectPRIVATE INVESTMENT
dc.subjectPRODUCTIVE INVESTMENTS
dc.subjectRATES OF INTEREST
dc.subjectREGULATORY REFORM
dc.subjectREORGANIZATION
dc.subjectREPAYMENT
dc.subjectREPAYMENT BEHAVIOR
dc.subjectREPAYMENT CAPACITY
dc.subjectREPAYMENT RATES
dc.subjectREPAYMENTS
dc.subjectRETURN
dc.subjectRETURNS
dc.subjectRISK MANAGEMENT
dc.subjectRISK MANAGEMENT STRATEGIES
dc.subjectSEIZURE
dc.subjectSEIZURE OF ASSETS
dc.subjectSHOCKS TO INCOME
dc.subjectSHORT-TERM LIABILITY
dc.subjectSTANDARD DEVIATIONS
dc.subjectSTOCKS
dc.subjectSUPPLY OF CREDIT
dc.subjectSUPPLY SIDE
dc.subjectSUPPLY SIDES
dc.subjectSUPPLY-SIDE
dc.subjectSUSTAINABLE DEVELOPMENT
dc.subjectUNSECURED DEBT
dc.subjectVALUE OF ASSETS
dc.subjectWAGE RATES
dc.subjectpoverty
dc.titleAre Microcredit Borrowers in Bangladesh Over-indebted ?en
dspace.entity.typePublication
okr.crossref.titleAre Microcredit Borrowers in Bangladesh over-Indebted?
okr.date.disclosure2013-08-01
okr.date.doiregistration2025-04-10T11:55:34.539815Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2013/08/18111659/microcredit-borrowers-bangladesh-over-indebted-microcredit-borrowers-bangladesh-over-indebted
okr.globalpracticeFinance and Markets
okr.globalpracticeTrade and Competitiveness
okr.guid967641468210580595
okr.identifier.doi10.1596/1813-9450-6574
okr.identifier.externaldocumentum000158349_20130815085751
okr.identifier.internaldocumentum18111659
okr.identifier.reportWPS6574
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/08/15/000158349_20130815085751/Rendered/PDF/WPS6574.pdfen
okr.region.administrativeSouth Asia
okr.region.countryBangladesh
okr.sectorFinance :: Micro- and SME finance
okr.themeMicro, Small and Medium Enterprise support
okr.themeFinancial and private sector development
okr.topicBanks and Banking Reform
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicFinance and Financial Sector Development::Bankruptcy and Resolution of Financial Distress
okr.unitAgriculture and Rural Development Team (DECAR), Development Research Group
okr.volume1 of 1
relation.isAuthorOfPublication1dc630c1-c19d-5c71-8d7c-1299435d0456
relation.isAuthorOfPublicationb91822c4-75b2-5ebb-a3d8-2fb46660d3b9
relation.isAuthorOfPublication.latestForDiscovery1dc630c1-c19d-5c71-8d7c-1299435d0456
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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