A Human Development Approach to Sustainable Financial Inclusion: The Case of Microfinance in Rural Bangladesh

Abstract

Human development typically refers to the set of opportunities that allow individuals to flourish in their lives. This study explores whether the provision of human development opportunities such as education and primary healthcare contributes to economic well-being among poor households who obtain microfinance loans. Using panel data from over 1,700 households in rural Bangladesh, this study analyzes the interaction effect between credit and human development opportunities. The findings suggest that when access to credit is coupled with conditions for human flourishing, household earnings are further enhanced.