The Role of Microfinance in Poverty Reduction and Empowerment of Marginalized Populations: A Qualitative Study in Tangail, Bangladesh

Abstract

Poverty remains a persistent challenge in many developing countries, including Bangladesh, where marginalized communities often lack access to financial resources and economic opportunities. This qualitative study examined the role of microfinance in poverty reduction and empowerment of marginalized populations in Tangail, a region characterized by high poverty rates and limited socioeconomic opportunities. The study focused on 30 participants selected through purposive sampling, and data were collected via in-depth interviews. Thematic analysis was employed to interpret the participants’ experiences and perspectives regarding microfinance programs. Findings indicate that microfinance institutions (MFIs) contribute to poverty alleviation by empowering low-income individuals, particularly women, through self-employment, small business development, and enhanced economic resilience. Participants reported improvements in living standards, financial access, and skills development through financial literacy and business support programs. Nevertheless, challenges such as over-indebtedness, rigid repayment schedules, time constraints, and inadequate support services were also identified. The study recommends that MFIs strengthen their programs by promoting financial literacy, responsible lending, technological integration, and collaboration with local government and community organizations. These measures can enhance the effectiveness of microfinance initiatives and provide valuable insights for policymakers, practitioners, and stakeholders aiming to leverage microfinance for sustainable poverty reduction.