Household and Intrahousehold Impact of the Grameen Bank and Similar Targeted Credit Programs in Bangladesh

This paper estimates the effects of borrowing from the Grameen Bank, the Bangladesh Rural Advancement Committee and the Bangladesh Rural Development Board's RD-12 program on household and individual outcomes.

It reveals that:

• Credit is often a significant determinant of household behavior;
• Credit provided to women affects outcomes more often than credit provided to men;
• Grameen Bank credit has the greatest positive impact on variables associated with household wealth and women's independence, girl's schooling, women's labour supply and total household expenditure;
• Women's credit from the BRDB had the largest impact on boy's schooling and the value of women's assets;
• Little evidence is provided of any impact of credit on the anthropometric status of children;
• Treating the placement of credit programs across villages as non- random has an important influence on the estimated program impacts;
• Program participation benefits the poor.

The paper concludes that:

• Targeted credit programs can empower women by increasing their contribution to household consumption expenditure, hours devoted to production for the market, and the value of their assets;
• Targeted credit programs can be seen as anti- poverty schemes: Increase the total per capita consumption of the poor and the asset holdings of women;
• Group-based credits provided to men can also have beneficial effects, on the schooling of children, contraceptive use, fertility and total household expenditure.