RURAL POOR AND THE FORMAL CREDIT PROGRAMS IN BANGLADESH : An Empirical Analysis

Since de－colonization from Britain to mid－1970s, the rural credit programs in the territory of Bangladesh had followed one after another and never worked well. Moreover, those programs had seldom served the poor, especially women. This article is an attempt to understand the historical nature of the problems and weaknesses of the rural finance. By the late－1970s, a new development approach was introduced by the Grameen Bank （literally: village bank） to correct the top－down bias of previous decades. This paper also presents a brief historical overview of why and how that alterative development model emerged and of its assumptions and expectations regarding institutional arrangements for minimizing state and private involvement in the development process. Some skeptics were refused to view micro－credit as being all that different from older and this is a small contribution to remove the fogginess around this mechanism. The author also indicates prospects and the recent emerging challenges of micro－finance for the poor