A comparative case assessment of the development roles of MFIs in Uganda and Bangladesh:a research report submitted in partial fulfillment of the requirements for the award of degree of Masters of Public Administration in the School of Government, Faculty of Economic and Management Sciences, University of the Western Cape
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Date
2007
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University of the Western Cape
Abstract
During the last decades of the 20th century, increased attention was given to the provision of microfinance services to low income earners, especially those from poor households of the developing world. This was done in the quest for remedies to the challenges posed by poverty as credit has been indentified as a barrier facing the poor. While the missions of different microfinance institutions (MFIs) varied, the majority focused on improving the social-economic conditions of the poor. However, there is general consensus that microfinance is not for all the poor. One wonders who the poor that benefits from the intervention are. The overall objectives of this thesis were to assess the theory and evaluate the development roles of MFIs in Uganda and Bangladesh. The study in particular focused on MFIs impact on poverty reduction, empowering women, promoting health as well as promoting children’s education in Uganda and Bangladesh. The study preferred the selected countries because Bangladesh is internationally considered as the best practice for microfinance, while Uganda is assumed to be well positioned in terms microfinance compared to other developing countries in Africa. Besides, both countries fall under the divide of developing countries. The question that guided this empirical investigation was whether MFIs empower women, reduce poverty, and promote children’s education as well as health among its beneficiaries in Uganda and whether Bangladesh has important lessons of experience for Uganda. The methodology employed in this study was mainly qualitative. The research investigation included a literature review of the prominent theoretical approaches as well as desktop study of the case Bangladesh. A case on Uganda’s MFIs was developed using relevant literature as well as in-depth interviews with government and private sector experts on MFIs in Uganda, managers of randomly selected MFIs, beneficiaries of MFIs as well as focus group discussion with women beneficiaries in three regions of Uganda where the data was collected. Findings from the study revealed undeniably that MFIs are critical tools for development with strong potential on poverty reduction, empowering women, and promoting children’s education as well promoting better health outcomes among the beneficiaries. In the same vein, the study also gives recommendations and areas for future research.
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Keywords
University of the Western Cape, microfinance institutions (MFIs), Microfinance, Development, Sustainability, Bangladesh, Capacity building, Uganda