Munich Personal RePEc Archive

Location Decisions of Microfinance Institutions of Bangladesh

Wadood, Syed Naimul and Mahmoud, Chowdhury Shameem (2010): Location Decisions of Microfinance Institutions of Bangladesh.

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The microcredit programs have expanded rapidly in Bangladesh in recent times. A recent phenomenon is that a large number of small and localized micro-finance institutions are operating side by side with established national-level institutions in the local-level microfinance markets. Here we examine the recent data from the Pathrail union of the Tangail district, one of the old places of microcredit, and we find interesting features regarding entry and operations of microcredit activities. One clear finding is that large and small micro-finance institutions tend to choose economically more prospective locations as their choices of destinations and in turn do have a tendency to ignore economically less prospective regions. We specify a panel data probit regression framework and the results derived are consistent with our casual observations of the data.

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