Poverty Impact and Outreach of Microfinance in Bangladesh: Current Knowledge, Practices and Moving Ahead

This paper reviews the microfinance sector in Bangladesh. It discusses the changing microfinance landscape in Bangladesh, its poverty outreach, impact research, enhancing impact and the role of donors.

The paper states that the new microfinance landscape and the ground realities facing the sector demand new knowledge. Existing knowledge service providers and structures that create this knowledge need to face up to this challenge. Conclusions include:

• New knowledge demands of the sector focus on improving existing services and enhancing impacts;
• Research needs to focus on the whole sector rather than on specific institutions;
• Donors can help find mechanisms to support local providers who are able to deliver on depth of poverty outreach and poverty alleviation;
• Investments in innovative approaches will need donor support;
• Microfinance sector needs to innovate both for its survival and to enhance impact;
• Relatively small investments in the form of technical assistance can add value to existing initiatives;
• Donors need to consider the idea of enhancing poverty impacts by leveraging the institutional capital of larger MFIs.