The Journal of Development Practice, Volume 5 (Annual), 2019, ISSN: 2394-0476 19 Pitfalls of Microcredit towards Sustainable Economic Development of the Microcredit Borrowers Evidence from Rupsha, a Locality of Bangladesh Idris Ali*, Ashiqun Nabi*, Muhammad HelalUddin** Abstract: This paper endeavors to investigate the pitfalls of microcredit towards sustainable economic development in a specific area of Bangladesh. The study obtained the opinions of 50 families from Rupsha, a locality of Bangladesh through a survey on the pitfalls of Microcredit to ensure sustainable development of the borrowers. To conduct this study, qualitative (expert interview, focus group discussion) and quantitative methods was used. The study is based on primary data collection through semi-structured questionnaires and Statistical Package for Social Science (SPSS) was used to analyze the data. The study finds that microcredit institutions charge high interest rate, do not monitor the usage of loan, fail to select right borrowers, do not provide any training to the borrower on effective utilization of loan, frequently loans are used in unproductive sector, short repayment period, gap between the installments is too short, these mentioned pitfalls prevent sustainable economic development of the borrowers. Although in short-term, microcredit plays a significant role to support the borrowers but in long-term it creates burden of loan repayment with high interest rate who fails to use loan properly. Study also finds that microcredit contributes a few borrowers to achieve sustainable development who could utilize the loan properly. Finally, this study comes up with some recommendations to get more benefit from microcredit to ensure sustainable development of the borrowers. Nevertheless, the results of the study are constrained by the size of the sample, area and robustness of the analysis. Key Terms: Pitfalls, Microcredit, Sustainable, Development. *Are Assistant Professors of Finance, Department of Business Administration, Manarat International University and **Works with College of Economics and Management Nanjing University of Aeronautics and Astronautics, Nanjing, China. The authors can be contacted at ali.du.icmab@gmail.com Introduction The key objective of this paper is to investigate the pitfalls of microcredit towards sustainable economic development micro-credit borrowers in Bangladesh and to point out some suggestions to overcome existing limitations of microcredit towards sustainable development. However, microfinance in Bangladesh has inherited a long history of innovative financial inclusion. After a couple of decades of development, the term microfinance is still recognized as relatively new. A more popular and practical term has been microcredit, which emphasizes the focus of the various financial institutions involved, although small loans have always been a part of microcredit operations. Gradually, in response to demand, other services such as savings, insurance (life and non-life) and remittance services have been developed or piloted and are now being bundled together under the term microfinance (Alamgir 2009).According to Microcredit Regulatory Authority -MIS Database (2017), number of licensed MFIs 649, number of branches, 17,120, number of employees 139,526, number of clients (million) 29.91, total borrowers (million) 24.85, loan disbursement (TK. billion) 1,046.12, agricultural loan disbursement (Tk. billion) 408.88, amount of loan outstanding (Tk. billion) 583.62, agricultural loan outstanding (Tk. billion) 354.00 and amount of savings (Tk. billion) 216.71 in Bangladesh. Sustainability became the featured objective of government pronouncements on development initiatives, domestic program agendas, and international aid targets. Major corporations and business associations also claimed adherence. Shelves of academic treatises, consulting reports and policy documents were prepared. Sustainability