Reducing Ultra Poverty with Packaged Microfinance

Dinajpur, Bangladesh

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In Bangladesh, the agriculture sector has the largest concentration of the labor force though it contributes only about 20% of the GDP. Among the farmers (agricultural labor), most of them have no land of their own. They usually work as agricultural day laborers. However, among landless farmers, them are tenants and share croppers. Sharecroppers usually have to share about and sometimes more than 50% of their production. Though sharecropping is usually less profitable to farmers than fixed rent, however, due to the liquid crisis farmers often have to go for sharecropping.
To meet the farmers’ demand for liquid money central bank of Bangladesh and some other financial institutions and MFIs started to provide cash during the agricultural season. However, we are not fully sure that providing cash to the farmers can ensure good production as they might be not aware of the use of appropriate inputs and methods or they might use the liquid in meeting other needs.
Considering these possibilities, we are in a partner association with IDE-JETRO and Kyoto University Japan, and Gana Unnayan Kendra (GUK), Gaibandha implemented an experiment on alternative designs in Ranigonj of Dinajpur district. Dr. Abu S. Shonchoy and researchers from IDE-JETRO and Kyoto University conducted the impact study based on Randomized Control Trial (RCT) design.