Microfinance and Environment: Does the Participation in the Microcredit Based Social Forestry of Proshika in Bangladesh Improve Environmental Literacy?

This study assesses the impact of participation in a microcredit-based social forestry program on the environmental literacy of participating households. The analysis of Proshika, an NGO in Bangladesh, is based on a household-level survey of 450 households. Proshika uses microcredit to motivate poor households to participate in the social forestry program that deals with tree planting, caring for trees and using them for economic and environmental benefits. Social forestry programs are aimed at helping small farmers and the landless to meet their consumption and income needs. The program aims to induce a large number of poor people to plant trees for their own benefit and make them more environmentally knowledgeable. 'Environmental literacy' can be defined as individuals' understanding about the factors and issues related to the environment. Considering the endogeneity in program participation, the instrumental variable technique was used to assess impact. Study results indicate that participation in Proshika's program significantly enhances environmental literacy in participating households.