Bank Credit, Agriculture, SMEs, Non-SMEs, Cointegration, VECM


This paper studies the contributions of bank-based financing to agriculture, SMEs and non-SMEs in the overall poverty reduction in Bangladesh. Annual data are used from 1980 to 2015. ARDL bounds testing approach is applied for evidence of cointegration among the variables and VECM is subsequently estimated. The empirical results show that financing of non-SMEs significantly reduces overall poverty in the long run. To this effect, SMEs play a marginal role in the current state of affairs. In contrast, agricultural financing reveals, otherwise.