Socio-economic Profile of Households in Haor Region of Bangladesh: A Study on Micro-Credit Perspective

Abstract

Purpose: The study aims to construct the socio-economic profile of Hoar people in respect of micro-credit activities. Methodology: Primary data have been collected from 2340 households consisting of 1560 micro-credit borrowers and 780 non-borrowers from 30 clusters of Haor region of Bangladesh. It has also conducted 30 KII and 30 IDI to cross check the survey data. Z-test, F-test, t-test and factor analysis have been used in analysing the data. Findings: The Haor people live below the national and rural poverty levels. About 95% households have knowledge on micro-credits while 85.8% tried to get that support, 59.2% borrowed from formal, 18.4% from informal sources and 8.2% from the both. The reasons for exclusion from micro-credits are credit misappropriation, non-cooperation of authorities, bureaucratic complexity, budget limitations, ignorance and corruption. Other negative aspects are high interest rate, short term loan, insufficient amount, local loans are easier and client friendly, low cost and flexible terms and conditions are applied. Based on these findings, a set of recommendations have been developed to improve the current situation for the people of the studied area. Practical Implications: The micro-credit authorities will gain pragmatic insights of the socio-economic characteristics of Haor people. They will also be able to re-structure or re-design micro-credit programs and concerned policies to get better results from the related programs. Originality/Value: Appropriate micro-credit programs can maximize productivity to the Haor people which can bring them out from the vicious cycle. Limitations: The study was restricted to the formal and informal micro-credit sources. Modern financial technologies were excluded for some practical reasons.