Bangladesh study finds heavier debt burden among poorest rural families

Seventy-nine percent of Bangladesh’s poorest rural families spend more than 40% of their income repaying loans, up from 49% in 2010, according to a study presented Monday.

The Bangladesh Institute of Development Studies (BIDS) found that the share of all borrowers exceeding that repayment threshold rose from 22% to 41%. Research director Kazi Iqbal presented the findings at a workshop, The Daily Star reported.

Households with two or more loans increased from 27% to 33% since 2010. The research did not examine why debt burdens grew.

“It means increased indebtedness for the poor and running into a cycle of debt,” Iqbal said.

Microfinance institutions now provide three out of four rural loans. Iqbal said competition had failed to lower effective interest rates and called for regulatory action.