Literature Review

Background of the Study:

This paper explores an important aspect of the relationship between poverty and domestic violence among women in Bangladesh by examining the role of women's participation in micro credit groups in influencing their risk of domestic (spousal) violence. In Bangladesh, where the micro credit revolution began with the founding of organizations such as the Grameen Bank, savings or credit group membership is among the most visible and common anti-poverty programs in the country. Affiliation to membership groups among the poor is widespread with approximately one in three households reporting some affiliation to the myriad of micro-finance institutions that operate in the country. While much of the current popular and scientific literature has touted micro-credit as a powerful agent of social change and an effective means out of poverty for the poor, the debate on whether or not micro-credit is actually effective in reducing poverty has grown significantly in recent years (see Roodman & Morduch, 2009; Kabeer, 2001 for a detailed discussion). In an extension to this debate, researchers have also become interested in whether or not membership in micro-credit programs, targeted primarily to women, enhances their status and autonomy. In the context of Bangladesh, one specific aspect of women's empowerment, domestic violence, has garnered a great deal of attention in these debates, particularly given the high levels of spousal violence that characterizes the largely patriarchal and impoverished society of Bangladesh (Schuler & Hashemi, 1994). These debates have been fueled further as studies that have addressed this topic have raised concern about micro-credit programs by reporting higher incidence of gender based violence among women who are members (Koenig, Ahmed, Hossain & Mazumdar, 2003).

In this paper, we address this question by employing a research technique that helps highlight selection issues that might confound the relationship between micro-credit membership and domestic violence. Studies that find higher rates of domestic violence among group members clearly contradict the objectives of most micro-credit organizations that include raising women's status by empowering them. In this paper, we argue that the presence of a statistical association between membership and violence does not imply causality and a causal attribute of violence to membership is misleading if membership is selective of women who are vulnerable to violence. Members of micro-credit organizations may differ from non-members in significant ways on other characteristics, most notably household poverty and vulnerability, potentially making them more susceptible to domestic violence (Steele, Amin & Naved, 2001). In this paper, we explore the association between micro-credit and domestic violence by focusing centrally on the question of selection 2 bias. We utilize the technique of logistic, uni-variate as a way of finding an appropriate comparison among the factor which is related with the violence and micro-credit.

Micro-credit in Bangladesh:

Micro-credit programs in Bangladesh is implemented by NGOs, Grameen Bank, state-owned commercial banks, private commercial banks, and specialized programs of some ministries of Bangladesh government. In the micro-finance sector total loan outstanding is around TK 248 billion (including Grammen Bank TK 72 billion) and savings TK168 billion. The total clients of this sector is 35 million (including 8.4 million clients from Grameen Bank) that accelerates overall economic development process of the country. Credit services of this sector can be categorized into six broad groups: 

1. General micro-credit for small-scale self employment based activities,
2. Micro-enterprise loans, 
3. Loans for ultra-poor, 
4. Agricultural loans, 
5. Seasonal loans, and, 
6. Loan for the disaster management.

Loan amounts up to BDT 50,000 are generally considered as micro-credit; loans above this amount are considered as micro-enterprise loans. Since the founding of Grameen Bank by Mohammad Yunus in the late 1970's in Bangladesh, micro-credit, or the provision of small collateral free loans targeted primarily to poor women has grown exponentially and has come to occupy an important position in poverty alleviation strategies. In just 30 years, micro-finance institutions are estimated to have reached over 100 million women all over the developing world. Proponents of micro-finance believe that it has contributed significantly to the reduction of worldwide poverty and has forwarded the cause of achieving the Millennium Development Goals (MDG) (Micro-credit Summit Campaign). The efforts of Mohammad Yunus and Grameen Bank were recently awarded the Nobel Peace Prize for their role in reducing world poverty. In Bangladesh, where the micro-credit revolution began, it has come to play a central and critical role in its poverty alleviation strategies.

State of Micro-credit in Bangladesh:

In the backdrop of global 'double-dip' recession and over-indebtedness crisis in micro-credit sector in several countries, Bangladesh's micro-finance sector shows strong resilience and continues to contribute towards enhancement of macroeconomic growth. Bangladesh micro-finance sector is mature now and its assets constitute around 3 percent of GDP in 2011. Total outstanding loan of this sector (only licensed MFIs) has increased by 20.0 percent from BDT 145.0 billion in June 2010 to BDT 173.8 billion in June, 2011 disbursed among 20.7 million poor people, helping them to be self-employed and accelerating overall economic development process of the country. The total savings has also increased by 23.25 percent to BDT 63.3 billion in June 2011 compared to previous year from 26.1 million clients, over 93 percent of them are women. 

The top three MFIs contribute 54 percent of total loan outstanding as well as savings of the microfinance sector in Bangladesh. Two of the largest MFIs, viz., BRAC & ASA, are each serving over five million borrowers. There are a few more developing fast. On the other hand the smallest 428 NGO-MFIs have contributed only 4 percent of total loan outstanding and 5 percent of total savings. Institutional concentration ratio is highly skewed in favor of large MFIs: just 22 institutions are in control of 76 percent of the market share while three largest organizations have control of over 50 percent in terms of both clients and total financial portfolios.

The overall trend of micro-finance statistics in Bangladesh has created direct job opportunities for over 111,800 people; 80 percent of them are male and 20 percent are female. At the end of June 2011, the sector had outstanding loans of BDT 173.8 billion disbursed to 20.7 million borrowers, and had accumulated BDT 63.3 billion as savings from around 26.10 million clients - over 93 percent of them are women - through more than 18,000 branches, by 576 NGO-MFIs licensed by MRA. 

The scenario of micro enterprise loan, i.e., loans above BDT 50,000, of different NGO-MFIs in Bangladesh. It is observed that micro enterprise loan outstanding is BDT 40 billion which is around 24 percent of total loan outstanding in which the top ten NGO-MFIs contributed around 19 percent. It also shows that BDT 40 billion is disbursed to around 6 lakh borrowers which are only 3 percent of total borrowers. The table expresses that only the top NGO-MFIs are capable to run micro enterprise loan. 

The growth of cumulative disbursement of loans of the top NGO-MFIs in Bangladesh over the last 5 years. The total disbursement of BRAC and ASA is BDT 1000 billion as of June 2011. Although their total disbursement is overwhelmingly high but growth rate has reduced over the last four years. The total disbursement of most of the MFIs has increased during the last four years but yearly growth rate did not increase except for Shakti Foundation for Disadvantaged Women (SFDW).

Micro-credit Membership and Domestic Violence:

As discussed earlier, in the debate on micro-credit programs and women's empowerment, domestic violence is an issue of critical importance in Bangladesh, where severe gender disparities in a rigid patriarchal society has caused domestic violence to become an accepted and even institutionalized practice (Koenig et al., 2003). In fact, according to the Demographic and Health Surveys, which collects standardized data on domestic violence in many countries in the developing world, domestic violence rates in Bangladesh are among the highest in the world with recent figures from the 2007 DHS, showing that over 52% of ever-married women had experienced some form of violence from their husbands in their lives. Micro-credit membership in Bangladesh also is widely prevalent, with recent figures showing membership rates as high as one in three households. In the 2007 BDHS domestic violence module, the representative subs ample of women that we use in this study, the proportion of women who are members of groups with a micro-credit component was as high as 38%.As in the larger literature on women's empowerment, there appears to be no clear consensus in the current evidence on whether the micro-credit groups reduces or exacerbates spousal violence either. Some studies have found clearly positive influences on domestic violence.

For example, Schuler et al. (1996) found unambiguous results that suggest that women's membership in micro-credit organizations is associated with reduced risk of domestic violence. Their study found a reduction in levels of violence of as much as two thirds among members when compared to women who did not have micro-credit programs in their villages. These positive effects also extended to women who were non-members but lived in villages with micro-credit programs. As Koenig et al. (2003) note, these beneficial effects could be a manifestation of a number of factors. First of all, it could be a result of the reduction in economic scarcity in the household resulting from the woman's membership in such organizations which brings in a loan and thus additional resources into the household. The access to loans and the subsequent control of a resource as valuable as money that membership in a micro-credit group enables a woman to have could increase self-reliance and elevate their 6.