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Prospects of Microfinance in the Hilly Region of Bangladesh

Sajjad Zohir

Seminar Paper

In the process of assisting a newly established NGO in Rangamati to develop their research capacity, a survey was undertaken. The findings found way into a seminar paper at the World Mountain Symposium in 2001.

Microfinance is generally believed to have impacted upon the lives of millions of rural people in Bangladesh, and the country has achieved great repute in the international community due to the achievements of some locally-groomed microfinance institutions (MFIs). Financial viability of the latter has, however, been often questioned. While the plain land terrain of the country enables the MFIs to organize groups and carry out financial transactions in a (relatively) cost-effective manner, the same is not true in the case of the hilly region of the country. Moreover, introduction of microfinance in the plain land of Bangladesh (late 1970s to early 1980s) was preceded by two decades of providing social services by various non-government organizations (NGOs). In contrast, the Chittagong Hill Tracts (CHT), the main hilly region of the country, had long been engaged in armed struggle for autonomy. The protracted
war had isolated numerous communities, and many of them had been deprived of accessing basic social services. The peace treaty accorded in late 1997 has now provided an enabling environment for peaceful development in the region. The national-level NGOs/MFIs have been quick to respond and a few local institutions have already emerged. Against the backdrop of these events, the present study proposes to map the current microfinance activities in the CHT and probe into the prospects of replicating microfinance programs of the plain land into the hilly area of the country.

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