What is it about?
Micro credit programs have positive socioeconomic impact on rural women borrowers of Bangladesh. But it is also opined by the different corners that the micro credit programs do not help the borrowers to develop entrepreneurial capabilities except surviving. Thus, this paper aims at identifying the factors related to the development of entrepreneurship among the rural women through micro credit programs of the micro credit providers. A multivariate analysis technique such as, Factor Analysis was conducted to identify the factors related to entrepreneurship development. Structural Equation Modeling (SEM) was used to identify the relationship between micro credit program and the development of rural women entrepreneurship in Bangladesh. Results show that the financial management skills are the most important factor that has significant relationship with the development of rural women entrepreneurship. Results also show that the group identities of the women borrowers have significant relationship with the rural entrepreneurship development in Bangladesh. Borrowers experience from the parents’ families and the limitation of option also lead to the development of entrepreneurship among the rural women borrowers of Bangladesh.
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Why is it important?
Micro Credit plays a crucial role in fostering rural women’s entrepreneurship in Bangladesh, where financial exclusion and socioeconomic barriers often limit women's economic participation. By providing small, collateral-free loans, micro credit enables women to start and expand businesses, contributing to poverty alleviation, job creation, and overall community development. Given Bangladesh's pioneering role in microfinance through institutions like Grameen Bank and BRAC, studying its impact on rural women entrepreneurs helps assess its effectiveness in promoting financial independence and social empowerment. Understanding the relationship between micro credit and women's entrepreneurship is essential for policymakers to design more inclusive financial programs that ensure sustainable economic growth and gender equity in rural areas.
Perspectives
Micro credit has been a transformative tool in promoting rural women’s entrepreneurship in Bangladesh, but its effectiveness remains a subject of debate. While it has empowered many women by providing access to capital, fostering business opportunities, and enhancing financial independence, challenges such as high interest rates, lack of financial literacy, and market access constraints persist. Some studies argue that micro credit alone is insufficient for sustainable entrepreneurship, emphasizing the need for skill development, mentorship, and infrastructural support. Moreover, social and cultural barriers often limit the full potential of women-led businesses. Therefore, while micro credit is an important catalyst for rural women’s economic participation, a more holistic approach integrating training, market linkages, and policy support is essential for long-term entrepreneurial success.
Dr. Nazrul Islam
Independent University, Bangladesh
Read the Original
This page is a summary of: Microcredit and Rural Women Entrepreneurship Development in Bangladesh: A Multivariate Model, J of Business and Management, January 2010, Inderscience Publishers,
DOI: 10.1504/jbm.2010.141177.
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