PROBLEMS AND PROSPECTS OF MICRO FINANCING IN BANGLADESH: A COMPARATIVE STUDY BETWEEN ISLAMI BANK BANGLADESH LIMITED AND GRAMEEN BANK

Abstract

The study attempts to analyze the problems and prospects of micro financing in Bangladesh especially in Islami Bank Bangladesh (IBBL) and Grameen Bank (GB). Since the inception of micro financing organization like Grameen Bank in Bangladesh in the mid-1970s, a number of countries have copied this model. Different conventional and Islamic banks also use this model. The apparent popularity of this model among developing countries is established in poverty alleviation. The paper shows that micro financing in Bangladesh faces enormous problems in infrastructural inadequacies, social misconception, poor legal and regulatory framework, unbridled competition from other financial institutions, and lack of qualified manpower. The researcher found some problems in both the banks commonly like: insufficient amount of credit, illiteracy, social custom barrier, severe poverty, migration of the clients to other countries and identifying the skilled & reliable customer. Despite this embarrassment of problems, the study identified several areas where opportunities exist for micro finance. This paper therefore concludes that the future of microfinance in Bangladesh is bright if the government and the policy makers consider the recommendations provided by the researcher.