Shahidur R. Khandker

The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?

This paper estimates the impact of participation, by gender, in the Grameen Bank and two other group‐based micro credit programs in Bangladesh on labor supply, schooling, household expenditure, and assets. The empirical method uses a quasi‐experimental survey design to correct for the bias from unobserved individual and village‐level heterogencity. We find that program credit has a larger effect on the behavior of poor households in Bangladesh when women are the program participants. For Example, annual household consumption expenditure increases 18 taka for every 100 additional taka borrowed by women from these credit programs, compared with 11 taka for men.

Handbook on Poverty and Inequality

The handbook on poverty and inequality provides tools to measure, describe, monitor, evaluate, and analyze poverty. It provides background materials for designing poverty reduction strategies. This book is intended for researchers and policy analysts involved in poverty research and policy making. The handbook began as a series of notes to support training courses on poverty analysis and gradually grew into a sixteen, chapter book. Now the Handbook consists of explanatory text with numerous examples, interspersed with multiple-choice questions (to ensure active learning) and combined with extensive practical exercises using stata statistical software. The handbook has been thoroughly tested. The World Bank Institute has used most of the chapters in training workshops in countries throughout the world, including Afghanistan, Bangladesh, Botswana, Cambodia, India, Indonesia, Kenya, the Lao Peoples Democratic Republic, Malawi, Pakistan, the Philippines, Tanzania, and Thailand, as well as in distance courses with substantial numbers of participants from numerous countries in Asia (in 2002) and Africa (in 2003), and online asynchronous courses with more than 200 participants worldwide (in 2007 and 2008). The feedback from these courses has been very useful in helping us create a handbook that balances rigor with accessibility and practicality. The handbook has also been used in university courses related to poverty.

Empowering Women with Micro Finance: Evidence from Bangladesh

This article examines the effects of men’s and women’s participation in micro credit programs on various indicators of women’s empowerment using data from a special survey carried out in rural Bangladesh. These credit programs are well suited to studying how gender‐specific resources alter intrahousehold allocations because they induce differential participation by gender through the requirement that only one adult member per household can participate in any micro credit program. Empowerment is formalized as an unobserved latent variable reflecting common components of qualitative responses to a large set of questions pertaining to women’s autonomy and decision‐making power. The empirical methods are attentive to various sources of endogeneity, and the results are consistent with the view that women’s participation in micro credit programs helps to increase women’s empowerment. The effects of male credit on women’s empowerment were generally negative.

The Poverty Impact of Rural Roads: Evidence from Bangladesh

A rationale for public investment in rural roads is that households can better exploit agricultural and nonagricultural opportunities to employ labor and capital more efficiently. Significant knowledge gaps persist, however, as to how opportunities provided by roads actually filter back into household outcomes as well as distributional consequences. This study examines the impacts of two rural road‐paving projects in Bangladesh using a new quasi‐experimental household panel data set surveying project and control villages before and after program implementation. A household panel fixed‐effects methodology controlling for initial area conditions is used to estimate the impact of paved roads on household and individual outcomes and account for potential bias in program placement at the village level. Rural road investments are found to reduce poverty significantly through higher agricultural production, lower input and transportation costs, and higher agricultural output prices at local village markets. Rural road development has also led to higher secondary schooling enrollment for boys and girls, as compared to primary school enrollment. We find that road investments have also benefited the poor, meaning the gains are significant for the poor and in some cases disproportionately higher than for the nonpoor.

Credit Programs for the Poor and Reproductive Behavior in Low-Income Countries are the Reported Causal Relationships the Result of Heterogeneity Bias?

Group-based lending programs for the poor have drawn much attention recently. As many of these programs target women, an important research question is whether program participation significantly changes reproductive behavior and whether the gender of the participant matters. Using survey data from 87 Bangladeshi villages, we estimate the impact of female and male participation in group-based credit programs on reproductive behavior while attending to issues of self-selection and endogeneity. Wefind no evidence that women s participation in group-based credit programs increases contraceptive use or reduces fertility. Men So participation reduces fertility and may slightly increase contraceptive use.

Credit Programmes for the Poor and Seasonality in Rural Bangladesh

This article examines the effect of group-based credit used to finance self-employment by landless households in Bangladesh on the seasonal pattern of household consumption and male and female labour supply. This credit can help smooth seasonal consumption by financing new productive activities whose income flows and time demands do not seasonally covary with the income generated by existing agricultural activities. The results, based upon 1991/92 survey data, strongly suggest that an important motivation for credit programme participation is the need to smooth the seasonal pattern of consumption and male labour supply. It is only the extent of lean season consumption poverty that selects household into these programmes. In addition, the largest female and male effects of credit on household consumption are during the lean season.

Income and employment effects of micro‐credit programmes: Village‐level evidence from Bangladesh

Micro-credit programmes, having made their mark in providing credit and other development services to the poor in a non-traditional way, are able to make significant changes in a rural economy. This article attempts to quantify the village-level impacts of the three most important micro-credit programmes of Bangladesh, namely Grameen Bank, Bangladesh Rural Advancement Committee (BRAC), and Bangladesh Rural Development Boards (BRDB) RD-12 project. Descriptive and econometric analyses show that these programmes have positive impacts on income, production, and employment, particularly in the rural non-farm sector. Also, growth in self-employment has been achieved at the expense of wage employment, which implies an increase in rural wages. The article emphasises that an upward shift in the labour demand curve is required for both improved productivity and wage gains on a sustainable basis, which can only be supported through a structural transformation of the rural economy.

Does Micro-Credit Empower Women? Evidence from Bangladesh

This paper examines the effects of mens and womens participation in group-based micro-credit programs on a large set of qualitative responses to questions that characterize womens autonomy and gender relations within the household. The data come from a special survey carried out in rural Bangladesh in 1998-99. The results are consistent with the view that womens participation in micro-credit programs helps to increase womens empowerment. Credit program participation leads to women taking a greater role in household decisionmaking, having greater access to financial and economic resources, having greater social networks, having greater bargaining power compared with their husbands, and having greater freedom of mobility. Female credit also tended to increase spousal communication in general about family planning and parenting concerns. The effects of male credit on womens empowerment were, at best, neutral, and at worse, decidedly negative. Male credit had a negative effect on several arenas of womens empowerment, including physical mobility, access to savings and economic resources, and power to manage some household transactions.

Welfare Impacts of Rural Electrification: A Panel Data Analysis from Vietnam

Most past studies on the development impact of rural electrification have relied on cross-sectional surveys comparing households with and without electricity. This study tests the validity of the perceived correlation between welfare outcomes and rural electrification and quantifies electricity’s benefits on the basis of sound econometric techniques that control for endogeneity bias. The study used panel surveys conducted in rural Vietnam in 2002 and 2005, covering some 1,120 households in 41 communes; by 2005, all surveyed communes had connected to the grid, and four-fifths of their households had a connection. The econometric estimations suggest grid electrification’s positive effects on both household income and expenditure and education. We find differential returns to electricity for commune- and household-level connection: the former generates externality benefiting the poor more than the rich, farm more than nonfarm income, and girls over boys for schooling outcome; conversely, the latter benefits the rich more than the poor, nonfarm more than farm income, and boys over girls for schooling outcome. We recommend further study on rural electrification’s long-term benefits for the overall rural economy.

Restoring Balance : Bangladesh's Rural Energy Realities

Bangladesh is one of the worlds poorest countries. Nearly 80 percent of the nations 140 million people reside in rural areas; of these, 20 percent live in extreme poverty. Geographically, many low-lying areas are vulnerable to severe flooding, while other regions are prone to drought, erosion, and soil salinity. Such an unfavorable agricultural landscape, combined with mismanagement of natural resources and increasing population pressure, is pushing many of the rural poor to the brink. Because Bangladesh is such a poor country, it also is one of the worlds lowest energy producers. Total annual energy supply is only about 150 liters of oil equivalent per capita (International Energy Agency, or IEA 2003); in rural areas, conditions are even worse. Compared to other developing countries, Bangladesh uses little modern energy. Despite its successful rural electrification program, close to two-thirds of households remain without electricity and, with the exception of kerosene, commercial fuels are beyond reach for many. Moreover, biomass fuels are becoming increasingly scarce. Collected mainly from the local environment as recently as two decades ago, bio-fuels are fast becoming a marketed commodity as access to local biomass continues to shrink. This study, the first to concentrate on Bangladeshs energy systems and their effects on the lives of rural people, drew on these background studies, as well as other World Bank-financed research on indoor air pollution (IAP) and rural infrastructure, to present a rural energy strategy for the country. Much of this studys analytical underpinning was based on several background studies. This study also reanalyzed data from earlier research to better understand the benefits of modern energy use for rural households, farm activities, and small businesses.