Does Microcredit Reduce Household Vulnerability to Poverty? Empirical Evidence from Bangladesh
Khan Jahirul Islam

Household poverty is a dynamic phenomenon, and thus requires dynamic analyses rather than traditional static measurements. We argue that if we use dynamic measurements of poverty, microcredit does not reduce a household’s poverty. Not only that, it may increase vulnerability to poverty for chronically poor households. These results contradict most of the existing literature that measures poverty with static methods. We analyzed our data both with static and dynamic measurements, and find the same results as the existing literature when using static measures. Thus, we argue that impact analyses of micro-credit need to incorporate the dynamic nature of poverty.

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