A comparative analysis of the financial performance of microfinance institutions of India and Bangladesh

Abstract

India and Bangladesh are two developing countries in the world. Poverty is the major problem in these countries. In these economies, it is argued that among others absence of access to newlinecredit is presumed to be the cause for the failure of the poor to come out of poverty. Lending to the poor involves high transaction cost and risks associated with information asymmetries and moral hazards. Microfinance is one of the ways of building the capacities of the poor who are largely ignored by commercial banks and other lending institutions and graduating them to sustainable self-employment activities by providing them financial services like credit,savings and insurance. newlineTo provide microfinance and other support services, Microfinance Institutions (MFIs) should newlinebe able to sustain themselves for a long period. Bangladesh has been the pioneer in the field newlineof microfinance movement and a significant contribution to the development of the country newlinehas been made by the several MFIs. Grameen Bank, BRAC, ASA and Prashika are some of newlinethem. Therefore it is interesting to compare the financial performance of MFIs of India and newlineBangladesh and to see where they stand against each other. newline