Most studies of microfinance programs in Bangladesh indicate that the poor, and especially poor women, have been effectively targeted, and that microfinance programs have been successful in opening up economic opportunities for their clients, increasing access to resources and contributing to their confidence and well-being. However the poor are not a homogenous group. Within the ranks of the poor lie groups with lower asset levels, less employment opportunities, greater consumption deficits, and greater vulnerability to periodic economic and social shocks. In Bangladesh, detailed estimates indicate that 27 percent of the rural population, or roughly half of those below the poverty line, are in “absolute poverty.” Most of these hardcore poor suffer from chronic food deficits. The majority of them are illiterate, own no agricultural land and survive in a situation of endemic insecurity often leading to land eviction, expropriation of assets and physical violence. Studies, as well as impressionistic evidence, suggest that these hardcore poor generally remain outside the net of conventional microfinance programs.
There are several supply-side reasons for excluding the hardcore poor from microfinance programs.