Title : Relative Effectiveness of Alternative Microfinance-driven Poverty Alleviation Programs in Bangladesh

Authors : Tamgid Chowdhury

Abstract : In general, the effectiveness of microfinance-driven poverty-alleviation programs run by Government Organizations (GOs) and Non-Government Organizations (NGOs) in developing countries such, as Bangladesh, is assessed by repayment rates, the number of beneficiaries, the area coverage, the amount of loans disbursed, the cost of operations, profitability and the financial sustainability of the projects. This book argues that these methods are quite restrictive because none of them reflect the perceptions of poor people concerning the effectiveness of the projects. The development agencies (such as GOs and NGOs) have never been compared on the basis of service delivery effectiveness [a process based comparison], nor have they ever been compared on the basis of their relative contribution to raising the living standards of the poor [an outcome based comparison]; both of which are crucial to poverty reduction. The main reason behind the absence of such comparisons is the unavailability of the appropriate parameters that could be used for such a comparison. For the process-based comparison, this study develops and validates a two-dimensional multi-item scale through construct, convergent, discriminant and nomological validity. The scale captures different aspects of effectiveness in the delivery of services. These aspects are termed the ‘credibility dimension’ and the ‘focus towards beneficiaries dimension’ of the service delivery in poverty-alleviation programs. For the output-based comparison, this study also develops and validates a ‘multidimensional poverty model’ to compare the effectiveness of GOs and NGOs in contributing to the economic, social, political, and cultural elements in the lives of the poor. The methodology is based on 930 samples collected from 12 districts and 107 randomly chosen villages in Bangladesh during September–December 2009. The results derived from utilizing the scale items for comparative study show that in many important dimensions of service delivery, the performance of GOs is more effective than that of NGOs. Gender discrimination also is evident in poverty-alleviation programs in Bangladesh. This study reveals that female beneficiaries are disadvantaged not only due to cultural or religious customs, but also because of the less attention they receive from the managers and field staff of both GOs and NGOs. The poverty model shows that GO agencies are more effective in improving the welfare of poor beneficiaries than NGOs as a whole. While the comparative study shows that government agencies are more effective in improving the economic wellbeing of the poor, NGOs are better at improving the social aspects of their lives.

Journal : Volume : Year : 2013 Issue :
Pages : 287 City : Newcastle Upon Tyne Edition : First Editors :
Publisher : Cambridge Scholars Publishing ISBN : 978-1-4438-5275-3 Book : Chapter :
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