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Bangladesh: Empowering Poor through Microcredit                                                            July 1, 2002
                      Microcredit, the provision of small loans for income-generating self-employment activities, can make all
                      the difference for a poor family. Through two interest-free IDA credits totaling $266 million, the World
                      Bank is supporting Bangladesh's growing microcredit movement.

                        The first project, begun in 1996, channeled funds an innovative quasi-government poverty foundation
                        that lends to promising small and medium NGOs to expand their microcredit programs. By the time it
                        closed in late 2000, the program had provided micro-credit to about 2.2 million borrowers. It helped
                        reduce poverty by stabilizing income and consumption as well as by increasing access to clean water
and better health. The project also increased school enrollment rates and boosted family assets. In addition, by supporting
partner-NGOs that retail microcredit, it enabled them to seek part of their funding needs from the financial market, and
allowing their gradual integration into the formal financial sector.   

Inspired by this success, the World Bank approved the Second Poverty Alleviation Micro-finance project in January 2001.
Aided by the follow-up program, partner organizations have estimated an expansion of around 4.5 million borrowers in the
next five years.  The Bank-sponsored project alone is projected to reach an estimated 1.2 million new borrowers and support
19,500 micro-entrepreneurs.

Updated: July 2002