Small Loans Help Increase Rice Yield In Bangladesh, Study Shows
An international research group has found that microfinance schemes could increase rice yields in Bangladesh. They published their findings in the American Journal of Agricultural Economics.
In the developing world, access to credit can lead to higher productivity and an increase in living standards. However, formal financial institutions are reluctant to finance households with low incomes or which lack collateral. This is where microfinance institutions, or MFIs, play a role.
MFIs extend small loans, called microcredit, to individual households. While standard microloans tend to be geared toward business and entrepreneurial endeavors, in recent years, Bangladesh has made a name for itself internationally by providing microcredit to tenant farmers.
Photo courtesy of Global Water Forum.