Bangladesh, located in eastern South Asia, is geographically relatively small, whereas it is the 8th highest populous country of the world with a population of around 168 million (World Population Review, 2019). It has also experienced rapid urbanization as a percentage of urban population has increased from a small 4% in 1950 to 34% in 2015 and is expected to reach 56% by the year 2050 (UNDP, 2016, Table 15, pp. 239). Dhaka, the capital city of Bangladesh, has a population of 18.2 million; most of them have migrated from different divisions of the country (World Population Review, 2019). Dhaka, centrally located in the country precisely at its middle point, attracts people from all over the country as a growth magnet, is highly densely populated, and it already contains around 10% of the population of the entire country by now, and the number is increasing.

Several microfinance institutions (MFIs) have been engaged in microfinance programs. These include both financial and nonfinancial services among the urban slum dwellers of the Dhaka city. This paper intends to examine the impact of MFI interventions among these borrower urban slum dwellers.

The urban microfinance programs (UMP) have been operating in Bangladesh since 1984 that was initiated by one nongovernmental organization (NGO) named Manabik Shahajya Sangstha (MSS) first-time in the Dhaka city (MSS, 2018). Out of the 707 MFIs, as mentioned above, about 30% of MFIs are working in urban areas (MRA, 2018). Overall MFIs have 19% urban borrowers from among the slum dwellers. Urban microfinance programs pose a greater challenge for the MFIs compared to the rural microfinance programs. Since the urban environment has some added elements of risks such as residents of urban slums are more prone to changes of residences and mobility across cities or towns, so this acts as an additional risk factor for the MFIs with regards to credit disbursements. It is the reason the MFIs were more comfortable with microcredit disbursements in the rural areas, whereas they were reluctant to proceed to the urban areas. Over time, this has been resolved as it has been evidenced by the recent data of microcredit disbursements.