Microfinance and Rural Development: The Bangladesh Way

The definition of poverty has evolved from consumption of calories to deprivation of income to lack of assets to sustainable livelihoods (Carney, 1998; DFID, 1999) to a more recent multidimensional poverty index (Alkire and Santos, 2014). Among the strategies for poverty alleviation, the Graduation Approach pioneered by Hashemi and De Montesquiou (2011) on behalf of Bangladesh Rural Advancement Committee (BRAC) is the most popular one. This approach lays emphasis on promotion of livelihoods, social protection and better access to microfinance for the poor. While declaring 2005 as the year of micro credit, Kofi Annan, the then United Nations Secretary-General, remarked, ‘sustainable access to microfinance helps alleviate poverty by generating income, creating jobs, allowing children to go to school, enabling families to obtain health care, and empowering people to make the choices that best serve their needs’.