Rural Financial Landscape in Bangladesh: Who is More Convenient for Rural Enterprises—Banks or Microfinance Institutions?

This article presents a comparative position of banks and microfinance institutions (MFIs) in reaching rural enterprises in Bangladesh, particularly in lending and savings services. We have gathered data from 225 respondents through a questionnaire survey on the demand side of the rural market of Bangladesh. The rural financial market is still mostly informal and underserved. MFIs have reached nearer physically and through the lending methodology to rural enterprises despite capability constraints in fund arrangement having organisational limitations to expand as per demand. On the other hand, conventional banks are not as near as MFIs are, particularly in remote rural areas. The attitude of bank officials, including the culture developed within the organisation, is a major barrier for rural enterprises to access credit and other desired financial services. However, people expect more from banks than MFIs despite the persistent reluctance of banks to be nearer. In both cases, products are imperfectly designed to cater to a wide range of rural people and their enterprises.