fertility and micro-credit Bangladesh

Introduction: Bangladesh is a small country with large number of population. Total number of population half number of girl. In long time only male work everything but female is still inside the home. Now a day female is work in town. But still village female is only birth child and family work do. Female are very important role play fertility and microcredit. We can try some Bangladesh context fertility and microcredit in our society. 

Fertility: 

 Fertility is the natural capability to produce offspring. As a measure, fertility rate is the number of offspring born per mating pair, individual or population. Fertility differs from fecundity, which is defined as the potential for reproduction (influenced by gamete production, fertilization and carrying a pregnancy to term) [citation needed]. A lack of fertility is infertility while a lack of fecundity would be called sterility. A parent's number of children strongly correlates with the number of children that each person in the next generation will eventually have. Factors generally associated with increased fertility include religiosity, intention to have children, and maternal support. Factors generally associated with decreased fertility include wealth, education, female labor participation, urban residence, intelligence, increased female age and (to a lesser degree) increased male age.

At the beginning of the 20^th century, the total population of Bangladesh was less than 30 million. The annual growth rate of the population was less than 1 percent until 1951, when the population reached about 44 million (Bangladesh bureau of statistics, 1998). From the early 1950’s, mortality started to decline while fertility remained high until the 1970s. owing to the changes in fertility and mortality rates, from the 1950’s the population started to grow at an unprecedented rate, reaching an all time high (about 2.5% per year) in the 1960s and 1970s. The growth rate then started to decline in the 1980s and is currently about 1.2% per year. The Bangladesh population policy indicates that the population should stabilize at 210 million by 2060, if replacement level fertility is reached by 2010. This estimates of future population science is reasonably consistent with the World Bank projection from 1994 (BOS et al., 1994), and the UN projections 1996 revisions (UN 1996), both of which estimated on mid 21^st century population of 210 millions. The main source behind the decline in the population growth rate of Bangladesh in the 1980s and 1990s was a remarkable decrease in fertility during the period. In the early 1970s, the TFR was about 7 children per woman, and an estimated 2.7 children per woman obtained by BDHS 2007. The TFR is so surprisingly low that quality of the data is being questioned. The aim of the chapter is to unmark genuine trends from the BDHS 2007 data. Its aim is to reach the firmest possible conclusions about the timing, magnitude, and nature of fertility decline in Bangladesh.

Lifetime fertility:

Fertility Trends in Bangladesh since early 1970s can be examined by observing a time series of estimates produced from demographic surveys filled over the last 2 and half decades, beginning with the 1975 BFS in 1978, the government of Bangladesh declared population pressure as the leading problem of the country. Since then, the government as well as non-governmental private and international organizations has undertaken several programs to solve population problems. Some success in different areas has been achieved.

    Table:3.2: cumulated number of children ever born to all women, by age group,   various sources

For example, female field workers, known as Family Welfare Assistants (FWAs), have established a well-designed net work for providing door-to-door family planning services. As a result, a substantial increase contraceptive use and remarkable decline in fertility have been achieved in the past two decades. The Bangladeshi family planning program is therefore now considered a model for less developed countries. However, despite these achievements, the present TFR is far above the replacement level and the population problem remains leading problem in the country. A convenient starting point for the discussion of fertility is a cohort analysis of cumulative number of children ever born. Table 3.2 displays the relevant information from all major sources over the last 30 years. At first glance, there appears to be no obvious pattern to the results.

Means number of children fluctuate erratically between 3.1 and 3.8 births. The oscillation reflects differential completeness of reporting between surveys as, for instances, have occurred in surveys conducted 1981. The problem is not clearly seen with regard to the differences between the census 1961 and the BFS a year later. A detailed evolution in these years suggests strongly that appreciable omission of children occurred among older age groups (Blacker 1977). The adjusted means are close to those reported in the 1975 BFS.

When attention is confined to the more reliable sources, a pattern emerges. Starting in 1983, the CPS has been conducted by Mitra and associates under contract to USAID, employing high standards of fieldwork supervision. A comparison of three most recent Contraceptive Prevalence Surveys reveals a decline in fertility among all age groups except the oldest. Similarly, comparison of the two Bangladesh fertility surveys both of which laid particular stress on accuracy of measurements shows an appreciable decline. The overall standardized mean changes from 3.79 births in 1975 to 3.14 in 1989, a fall of 17 percent. While deterioration in completeness of birth reporting or discrepancies in sample design could account for both the CPS and BFS comparisons, a genuine decline in fertility is a more likely explanation.

A comparison of the mean of number of children ever born reported in the 2004 BDHS and various other surveys does not highlights recent changes in fertility, but rather is an indication of the cumulative changes in fertility over the decades preceding the 2004 BDHS. Despite the fluctuations between surveys, the data generally show only modest declines until the late 1980s. Between 1985 and 1989, the decline in the mean number of children gain declined considerably between 1991 and 1993-1994 and 1999-2000 at all ages except 15-19. The most recent data showed a decline in the mean number of children between 1999-2000 and 2007 among women age 30and above.

Fertility levels and trends:

Bangladesh has been cited a remarkable decline in fertility that has begun in 1980s this is the main force behind the decline in the population growth rate of Bangladesh during this period. In the early 1970s the TFR was about seven children and women in the first demographic and Health Survey 94. TFR remained almost unchanged at 3.3 children per woman in the next two DHSs conducted in 1996-97 and 1999-2000. (Mitra and others, 1997, BDHS 2000). According to the BDHS 2007, the estimated TFR is 2.7. This shows a very small change in TFR in recent years. The following table also represents the trends in current fertility

Table: 3.3.1: Trend in current fertility according to national survey:

prospect of fertility decline in Bangladesh and has created concern among planner and policy marks.

Other predictors of fertility are the age at first birth. The onset of childbearing has a direct effect on fertility. Early initiation into childbearing lengthens the reproductive period and subsequently increases fertility. In many countries, postponement of first births reflects an increase in the age at first marriage has an important role to decline fertility. Early childbearing involves substantial risks to the health of both the mother and child and restrict educational and economic opportunities for women. The following table gives the relevant evidence from the 1989 BFS and 2007 BDHS in terms of median age at 1^st birth:

Table: 3.3.2: Age t 1st birth according to the 1989 BFS and 2007 BDHS:

The median age at first birth, is about 18.2 years across all age cohorts, except for women age 45-49 years, whose median age at 1^st birth 18 years, indicating a slight change in the age at first birth. This light increases in age at 1^st birth is reflected in the smaller proportion of younger women whose 1^st birth occurred before age 15, 18% of women in their late forties report having had their 1^st birth before age 15,compared with only 6 percent of women age 15-19. Comparison of data from the 1999-2000 BDHS and the 2007 BDHS shows little change in the median age at first birth for women age 20-49. At this point, it is useful to introduce a different type of evidence to buttress the emerging conclusion that Bangladesh indeed has experienced a recent, large fertility decline. In successive surveys, currently married woman have been asked whether or not they are pregnant. As an indicator of fertility, current pregnancy data have one great virtue compared to birth data: they do not suffer from misdating problems. However, it is well known that understatement occurs, partly out of shyness but mainly because women are often uncertain about their status in the first trimester of pregnancy (Goldman and West off 1980). Nevertheless, it is likely that the degree of understatement is constant over time and to the extent that this proposition is valid, trends in the proportions pregnant can be interpreted in a straightforward manner. These proportions are given in the table 3.3.3

The prevalence of reported pregnancy is slightly lower in 1975 than in the subsequent 3 surveys; probably because of an effect on fertility of the severe 1974 famine (The Matlab data series shows a marked fertility response to the famine). Percentage of currently married women who reported that they were pregnant, 1975 and 2007 BDHS.

Table 3.3.3: Percent of pregnant in 1989 and 2004

After that declining trend has started and stalled around 6.1 percent. The above table gives a detailed comparison of the 1975 and 2007survey results. At younger ages, the fall in proportions pregnant is modest, but the difference widens among older women, comparison of the total pregnancy rate reveals on overall fall of 47 percent. The conclusion can be drawn that a large decline in marital fertility has occurred, in response to increased birth control in the later stages of marriage.

The above discussion revealed the factors behind the fertility decline in Bangladesh. There is another important factor which has important role in this decline the contraception prevalence which is discussed in later.

Microcredit:

Microcredit is used to describe small loans granted to low income individuals that are excluded from the traditional banking system. It is part of the larger microfinance industry, which provides not only credit, but also savings, insurance, and other basic financial services to the poor. The term ‘micro’ stems from the relatively small amounts of money that are being borrowed or saved

History of Microcredit: 

The Beginnings

Micro-finance has existed in various forms for centuries, and even longer in Asia, where informal lending and borrowing stretches back for several thousand years. However, the birth of ‘modern’ micro-finance is said to have occurred in the mid-1970s in rural Bangladesh. There, in the midst of a famine, Dr. Muhammad Yunus, professor of economics at the University of Chittagong, was becoming disillusioned with the abstract theories of economics that failed to explain why so many poor people were starving in Bangladesh.

A 27 Dollar Loan

Determined to find a practical solution, Yunus began visiting local villages. In one nearby village, Jorba, he found a group of 42 women who made bamboo stools. Because they lacked the funds to purchase the raw materials themselves, they were tied into a cycle of debt with local traders, who would lend them the money for the materials on the agreement that they would sell the stools at a price barely higher than the raw materials.

Yunus was shocked to find that the entire borrowing needs of the 42 women amounted to the equivalent of US$27. He lent them the money from his own pocket at zero interest, enabling the women to sell their stools for a reasonable price and break out of the cycle of debt.

Muhammad Yunus talking with borrowers of the Grameen Bank | Copyright © Grameen Bank 2006

The Grameen Bank

The Grameen Bank project, which translates literally as “Village Bank”, was born, and today works in over eighty-thousand villages with more than six million borrowers. In 2006 both Yunus and Grameen were awarded the Nobel Peace Prize for their work with the poor.

Rapid Growth

Inspired by the success of The Grameen Bank, the 1970s and 80s saw rapid growth in the number of new micro-finance institutions appearing around the world, many of them started by NGOs and funded by grants and subsidies from public and private sources. They demonstrated that the poor could be relied on to repay their loans, even without collateral, and hence that micro-finance was a potentially viable business.

A New Model

During the 1990s, the industry began to realise that it could not continue to grow at such rates while still relying on grant funding. As a result, many began to restructure themselves to attract commercial investors, adopting more formal business practices and working to improve their efficiency and sustainability.

The Formation of Positive Planet

1998 saw the formation of Positive Planet (ex Planet Finance), a not-for-profit organisation whose initial objective was to use the internet and new communication technologies to reinforce the capacities of NGOs in various sectors. This soon evolved into the Positive Planet that we know today; an international NGO whose mission is to fight against poverty by developing micro-finance.

The Entrance of Major Players

As enthusiasm for micro-finance as a tool for poverty alleviation increased, focus moved away from NGO models towards promoting a sustainable industry that could provide financial services to the poor at fair prices while offering a reasonable return to commercial investors. As well as the many micro-finance investment firms that exist today, several large banking institutions have also entered the industry, such as Credit Suisse, Deutsche Bank and Citigroup.

By the end of 2008, nearly $15 billion of foreign investment had been channeled into micro-finance institutions, the majority still from government development organizations such as the World Bank, but with large amounts arriving from a variety of private and commercial sources.

Recent Innovations

In recent years’ micro-finance has been the subject of various innovations and experiments, from leveraging the hugely popular mobile banking industry, where mobile phones are used to send and receive money, for the purpose of micro-finance; to the introduction of new loan products tailored to local contexts, such as machinery loans, harvest stock spaces, and cattle fattening loans.

Loan methodologies have also diversified, and the original model of supportive group loans pioneered by the Grameen Bank, which have become more complex and adapted to local realities. Currently, products such as micro-insurance and micro-savings, which previously took the back-seat to micro-credit, are seeing their popularity increase.

Impact of Micro-finance Services on Borrowers and on the Economy 

The impact of micro-finance at macro level is not still clear (CPD, Task force Report, 2001), even though it has some impact at micro level on the society both in terms of economy and social value. There are a few studies on this impact assessment of micro-finance, findings of those studies are as follows:

1. The dependency of poor people on the moneylender or richer people has been reduced substantially in the society and people are getting access to institutional sources for credit. Even the formal sectors have been keeping confidence on the poor for lending money, which is a qualitative change in the rural society due to micro-finance intervention.

2. Employment opportunities of the poor have increased to a great extent in terms of both longer working hours and new employment. The targeted households that are eligible for participation in micro-finance programs have a higher probability of being self-employed than their counterparts in non-program villages.

3. The labor force participation rate (LFPR) for more employment opportunity of the participants was found higher than the non-participants. Before nineties the wage rate for women labor force did not get importance because of social backwardness, women labor was sold at a very low non-bargaining rate. This was equally true in case of male labor force before the eighties. But with time passing situations have changed noticeably; it is recognized that there is now a days a serious scarcity of labor in rural areas, especially in the peak season and this shortage even hampers agricultural production. The intervention of micro-finance in the rural market is one of the main reasons for this change. Therefore, the labor force of rural areas now has the ability to influence rural wage rate.

4. As the main target group of micro-finance is women, they have gained a special financial power over men. Though women are dominated by men culturally, their access to get credit and do their own business has increased their confidence on their own ability. This is especially true for the rural poor women of the country. Now more and more rural women move outside their home after joining micro-finance program. They now go to office, banks, market and other places without a male company. This is a positive indicator of women empowerment.

5. There is a controversy about the impact of micro-finance on poverty alleviation. The poverty rate of the country did not decrease significantly in last few years. It did not increase though. The main focus of micro-finance is to alleviate poverty, but it could not reach the poorest of the poor till now. One of the reasons might be the failure to reach the hard-core poor by these programs. Now MF-NGOs are seriously thinking about this issue and have started some programs to solve this problem. But it is a challenging work to do, because this group of the population first needs money for consumption. Without solving these problems they are not able to invest credit for cash flow, which they need to repay the loan in time. Therefore, it has been seen that there are big successes of micro-finance at micro level that do not show any significant impact at macro level. In the recent literature it is often mentioned as the problem of "Macro-Micro Mis-match" (Sen, 2001).

To know the real extent and to quantify the impacts of micro-finance mentioned above thorough study is needed, which is time consuming and costly. However, government needs to do that to make a correct decision. There is another problem to assess the real net positive impact of micro-finance program, which is again impossible without assessing the real cost involved in operating this financial service. Different MF-NGOs are charging different interest rates but none is based on rational cost involved. A real positive impact of micro-finance program can be measured if and only if the recipients of this facility pay the full cost of the services they receive.

Suggested Reforms To Face The Future Challenge

Since NGO-MFIs have to face the realities of declining subsidized fund, they should take effort to reduce administrative and transaction cost which seems very high. Most of them do not practice proper bookkeeping and accounting policies, lack professionalism in financial transaction, therefore, training and capacity building in accounting and financial management plus greater transparency in their operation is essential not only to make them attractive to the donors but also to enable them to tap commercial markets and banks.  

Formal commercial banks lack experience and expertise to operate in this market; they can overcome this problem by linking them with NGO-MFIs who already have a ready set up of operation and experience. This linkage program on one side can reduce operational cost of commercial banks and on the other side can reduce the financial problem of NGO-MFIs. Especially, smaller NGO-MFIs could be encouraged strongly to play the role of brokers between the banks and the borrowers. Here the banks bear the credit risk by lending directly to the borrowers and share a part of its spread with the NGO-MFIs. The NGOs will receive a commission for identifying borrowers and ensuring repayments. Large NGO-MFIs can also be integrated into this program of poverty alleviation by encouraging them to establish themselves as banks.

Present legal framework of formal financial institution can be changed in favor of the rural poor. Under this framework moveable property, accounts receivables, credit history or good previous repayment performance etc. are not useable as security to access credit. But most of the rural poor people have only these things to offer as security. These realistic changes in the legal framework can help poor people to enter into the formal financial market easily.

Therefore, micro finance sector will have to develop a concrete long run vision of a flexible, self-sustainable, well-regulated and pro-people micro finance industry capable of facing all these challenges. That means the industry will:

� Design its product according to the market need - what kind of loan poor people really need and which terms and conditions are applicable to them. They should not just follow Grameen Bank model, rather they should be innovative in product designing,

� Diversify its loan portfolio, not just depending only on the agricultural sector for investment,

� Identify the exact cost involved and find out reasonable service charge for each product offered,

� Apply internationally accepted accounting policy,

� Formulate transparent policy for the stakeholders,

� Acquire a corporate legal identity owned by the clients themselves or focus on a single activity with corresponding single legal identity.

On the other side the government and the donors should try to help the industry to be sustainable by developing infrastructure needed, providing training and technical assistance, providing correct guidelines and regulation, offering proper incentive for positive contribution and punishment for the opposite.

The future of micro-finance is hard to forecast, but several estimates suggest that 500 million to 1,5 billion people still lack access to financial services that could strengthen their economic situation and improve their life conditions.

Additionally, 2.5 billion young people will become adults within the next ten to twenty years, and it seems uncertain whether the traditional working market will be able to absorb such demographic boom. The role of micro-finance and other alternatives ways to encourage and assist auto-entrepreneurship are likely to remain important in the global economy.

Conclusion:

It is expected that with the fulfillment of the above vision this service sector would contribute to our economy by alleviating poverty in real sense. It would help to generate permanent employment, remove over dependency on agriculture and help people by eliminating their dependency on the moneylenders and informal credit suppliers. Poor people would be able to take care of their health and education by getting the benefit from this service and they would also help MFI to be sustainable by paying their due on time. It is also expected that since members' savings is becoming the main capital of this business, therefore the representative of the members should have a say in the decision making process of the MFIs for the long run benefit of the industry.

References:

1. Ahmed Faruque (2000), A Review of Impact Studies on Microfinance Programs in Bangladesh., Credit and Development Forum, Dhaka, Bangladesh.

2. Ahmed, Salehuddin (2000),"Microfinance Institutions In Bangladesh: In Search of A Regulatory Framework", Paper Presented in Regional Workshop on Micro-finance for East Asia and The Pacific, Manila, Philippines (March 20-24, 2000).

3. ASA (1999), Annual Report-1999, ASA, Dhaka

4. Association of Development Agencies in Bangladesh (ADAB) (1994), Grassroots: Alternative Development Journal (Quarterly, Vol. IV, Issue XII-XIII), July to December.

5. Bangladesh Bank/ Development Planners and Consultants (DPC) (1999), Final Report on Regulatory Framework, Bangladesh Bank, Dhaka, Bangladesh.

6. Bruntrup Michael, Alauddin S.M. et.al (1987), Impact Assessment of The Association For Social Advancement (ASA) Part-1, ASA, Dhaka, Bangladesh.

7. CARITAS (2000), Annual Report-1999-2000, CARITAS, Dhaka.

8. CDF (1998), "Proceeding of the Workshop on Appropriate Regulatory Framework for NGO-MFIs", Credit and Development Forum, Dhaka, Bangladesh.

9. CDF (1999), Study Report on Accessibility of Small and Marginal Farmers to NGO-Run Microfinance Programs, Credit and Development Forum, Dhaka, Bangladesh.

10. CDF (2000, 2001), CDF Statistics (Micro-finance Statistics of NGOs and Other MFIs), Vol. 10, 11,12,13 Credit and Development Forum, Dhaka, Bangladesh.

11. Circulars of Government of Bangladesh effective for NGOs/MFis.

12. Grameen Bank (1998) Annual Report - 1998, 1999, 2000, 2001, Grameen Bank, Dhaka, Bangladesh.

13. M.A. Baqui Khalily and M.O. Imam (1998) " Behavior of Micro-finance Institution of the Case for Regulation and Supervision", Paper presented at a seminar arranged by PKSF/Proshika, Dhaka, Bangladesh.

14. MIDAS(1998), Annual Report-1998, MIDAS, Dhaka.

15. Palli Karma Shahaok Foundation (2000), Annual Report, Palli Karma Shahawak Foundation, Dhaka, Bangladesh.

16. Parvin Shahedara (1998), Institutional Sustainability of ASA Part-2, ASA, Dhaka, Bangladesh.

17. Sen Binayak, et. al (Task force chairman was Professor Muhammad Yunus) (2001) , Task force Report on Poverty, CPD, 2001, Dhaka, Bangladesh.

18. Yunus, Muhammad (1994, reprinted), "Grameen Bank Experiences and Reflections", Paper Presented at the Consultation on the Economic Advancement of Rural Women in Asia and the Pacific, Kuala Lumpur, Malaysia on 15-21 September 1991.

19. Wikipidia

20. Bangladesh Bank

21. BBC