Microcredit Programmes: Who Participates and to What Extent?

This paper uses multivariate analysis to examine differing characteristics of 'properly targeted' versus 'non eligible' participants in a credit programme, based on data collected in fourteen villages in Matlab thana Chanpur, Bangladesh.

It questions the 'depth' of program participation of members using a set of credit based indicators. The paper examines differences between 'correctly targeted' and 'non-targeted' households in terms of 'participation depth' to establish possible determinants of active participation.

It concludes that agencies targeting the rural poor can take two approaches with regards to the issue of 'non target group members':

• One approach is to gradually exclude non- target group (NTG) members from the group and replace them with eligible households taking the view that the large unmet demand for credit amongst the poor ought to take priority;
• The second approach is that these NTG members should be retained within the group.

[Author's abstract]