Microfinance as a Catalyst for Soc o-Economic Transformation in Former Enclaves of Bangladesh: A Critical Appraisal

Abstract

This study mainly endeavors to meticulously evaluate the role of microfinance interventions on the socio-economic metamorphosis of people in the former enclaves of Bangladesh. Post-integration, enforced identities and rigid borders intensified enclave inhabitants' plight, amplifying economic ruin, job scarcity, substandard living, and developmental exclusion. Striving to integrate sequestered communities into the developmental framework, several NGO-MFIs instigated microfinance interventions within these former enclaves. The study deployed a multifaceted methodological framework, anchored in inductive reasoning, to delineate the profound ramifications of microfinance interventions rigorously. Findings revealed that microfinance borrowers experienced a positive economic trajectory, showcasing amplified income, expenditure, and savings, alongside enhanced employment prospects. The escalating utility and travel costs of borrowers reflect augmented financial liquidity; furthermore, borrowers prioritized liquid assets over immovable wealth, with savings surging. However, infrastructural advancements in sanitation remained lackluster, highlighting microfinance's uneven efficacy in driving holistic socio-economic upliftment. In essence, the comparative evaluation elucidates that microfinance beneficiaries in the former enclaves of Bangladesh demonstrated a moderate escalation in household income and expenditure, coupled with enhanced fulfillment of basic needs and a pronounced supremacy in accrued savings and transport assets. Conversely, non-borrowers demonstrated elevated expenditures on travel and utilities, superior access to sanitary infrastructure and potable water, greater land tenure, and a heightened prevalence of mobile phone ownership, livestock, and poultry. Inferential analysis unveils a statistically significant correlation between microfinance participation and household income elevation, utility affordability, and asset valorization, whereas non-borrowers exhibited superior land tenure and infrastructural access. Consequently, the findings necessitate policy recommendations toward holistic socio-economic elevation—such as training opportunities, improving infrastructure, and fostering entrepreneurship—beyond mere financial integration.