Comparative spatial advantage between microfinance institute and banking in reaching rural enterprise financial services in Bangladesh
- Autores: Azim Uddin Mahmud
- Directores de la Tesis: Antoni F. Tulla i Pujol (dir. tes.)
- Lectura: En la Universitat Autònoma de Barcelona ( España ) en 2017
- Idioma: español
- Tribunal Calificador de la Tesis: Montserrat Pallarès-Barberà (presid.), Antoni Luna (secret.), Stefan Gärtner (voc.)
- Programa de doctorado: Programa de Doctorado en Geografía por la Universidad Autónoma de Barcelona
- Materias:
- Enlaces
- Tesis en acceso abierto en: TESEO
- Resumen
The objective of this thesis is to explore the little known reality of Rural Financial Intermediation, its’ location arrangement and barrier in reaching Rural Enterprise, rural economic activities and agrarian farm and producing indication of multidimensional financial inclusion agenda. We need to analyse rural credit and savings culture and determine institutional good practice both for Bank and Microfinance Institute (MFI) at rural level and compare between Bank and MFI, whether it has the advantageous spatial arrangement along with favourable environment in rural context to deliver core services (Savings & Credit) by giving “access to finance” for Rural Enterprise.
The research is based on questionnaire survey on the demand side of four rural fields in Bangladesh including extensive literature review that express discriminative financial structure which avoid rural entities. Our finding ensures a significant association between distance and borrowing and in case of MFIs it is highly supported by tolerable costing and flexible documentation compared to conventional banks, though with lower loan ceiling. There are several dimensions around the situations. In remote areas of Bangladesh, it is difficult for people and their enterprises to get loans and other financial services because banks are geographically away from them being located in well-endowed areas like administrative centres. Moreover, the basic products (mainly credit facilities) are not easily reachable to them because of the required formalities, imperfect product design and sceptical attitude of the bankers to deliver necessary service properly. Banks’ predetermination to physical collateral for lending disappoints further entrepreneurship. The inherent insolvency and weak management restrict agricultural banks to take challenges of rural enterprises in spite of their presence in rural areas. Few banks have their outlets in rural areas to meet regulatory bindings and work as deposit hunting agents. Thus around 60% of rural deposits are being channelized to urban appetite showing a clear discrimination through policy limitation of spatial banking regulation. On the other hand bank default culture has become adjusted in social system showing an alarming rise of non-performing loan (NPL) at national level. It is assumed that against this scenario, a continuous scarcity of fund limits allocation for small and microenterprises.
However, the rise of NGO-MFIs (Non-Government Organization- Microfinance Institute) during 1970s has reshaped rural banking through functional and operational proximity, innovative lending model favouring poor and by erasing cultural and organizational barriers. But capability constraints of MFIs strangulate further growth of rural enterprises, therefore, few rural big enterprises have to hire fund from conventional banks enduring much hindrances and going across geographical boundaries, because the MFIs fail to meet their growing commercial demand and they are also barred by regulations to collect public fund (exception exist). They also cannot perform regular baking business, required by the rural enterprises.
This thesis is structured in seven chapters. The First makes a ground for conceptual framework and identify the background problems that leads to research questions, explain research objectives, hypothesis and finally explain the justification of this research work. The Second tells about rural economy and rural credit including geographic approach in Bangladesh. The Third presents the literature review and the Fourth reveals the “Research Methodology” including the process applied in the research. The Fifth describes few in-depth issues and concepts related to money, rural financing environment including rural informal money market and historical development, MFIs, its evolution, women empowerment and so on. The Sixth presents research result through analysis and interpretation and the conclusion exists in the Seventh.
Keywords: Applied Geography; Bangladesh; Microfinance; MFI and Bank Location; Rural Finance;
