02Oct 2018

THE CAUSES AND CONSEQUENCES OF OVER-INDEBTEDNESS OF MICRO-FINANCE CLIENT: EVIDENCE FROM KHULNA DIVISION, BANGLADESH.

  • Department of Banking and Insurance, University of Dhaka, Bangladesh.
  • Department of Marketing, University of Rajshahi, Bangladesh
  • Abstract
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Microfinance strives to reduce poverty and promote social welfare, and thereby, MFIs provides a wide range of financial services to their client. However, some critics argue that microfinance can adversely drive its client towards over-indebtedness. Therefore, the key purpose of the study is to shed light on examining the causes and consequences of microfinance client in Bangladesh, especially in the context of Khulna division, as a few numbers of studies in Bangladesh have made an effort to serve this purpose. Using a partial least square method (PLS), and structural equation modelling (SEM), the study analyzed data of respondents (n=380). The study employed cross sectional survey method and infield (on-site) interaction with respondents to maximize response rate. The study found that psychological and cognitive bias, sociological, and economic factor cause over-indebtedness of micro-finance clients in Khulna division, Bangladesh. The study revealed that over-indebtedness causes negative material, social, and psychological and physical consequences. The findings of the study can be used to develop sophisticated policies and devise effective strategies as a mean of assisting the people, who are over-indebted, and who have the possibility to be over-indebted.

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[Md. Ismail Hossain and Md. Shahin Quader. (2018); THE CAUSES AND CONSEQUENCES OF OVER-INDEBTEDNESS OF MICRO-FINANCE CLIENT: EVIDENCE FROM KHULNA DIVISION, BANGLADESH. Int. J. of Adv. Res. 6 (Oct). 6-16] (ISSN 2320-5407). www.journalijar.com

Md. Ismail Hossain
BBA (University of Dhaka)

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