Microcredit has been considered one of the most significant innovations in the field of development in the last thirty years. It provides collateral free financial resources to the poor worldwide. It plays an important role in poverty eradication, socio-economic development, livelihood diversification and women empowerment especially in the developing and under-developed nations. It has contributed positively to the natural resources management by forming social capital, creating alternate income and diversifying livelihoods of the resource dependent rural people. Natural resource management, in general, and fisheries resources management in particular, are currently undergoing a major paradigm shift. In recent years, the notion of government as the only decision-making authority has been replaced by multi-scale, polycentric governance, which recognizes that a large number of stakeholders in different institutional settings contribute to overall management of resources. Improving the management of natural or common pool resources and empowering local communities, community-based management has become a common strategy in the last two decades. Community-Based Organizations are grassroots institutions that involve rural communities in co-management. Several factors influence the functioning and sustainability of these CBOs which contribute to the management of common-pool resources in Bangladesh. To address the complexities of socio-cultural systems and sustainable natural resource management, managers, practitioners, and theoreticians widely rely on social learning. The evidence of social learning is apparent in collaborative participation and group actions where individuals meet, interact, share ideas, learn collectively and take collective decisions. They adjust the management approaches and change their perceptions according to their social learning in natural resources management.

The purpose of the research was to assess the role of microcredit in improving rural livelihoods (mainly fishing households), identify the challenges faced by microcredit institutions, and to explore the process of organizations and obstacles involved in the sustainability of Community-Based Organizations developed by CBFM-2 project in Hakaluki haor area. It was intended to explore the evidence of social learning and capacity building efforts related to microcredit and CBFM-2 project intervention in the study area.

The main objective of this research was: to assess the roles of microcredit in improving rural livelihoods with a focus on fishing households and institutional capacity-building. The secondary objectives were: (i) to understand the processes of organization and the challenges that Community Based Organizations (CBOs) face, and (ii) to explore the evidence of social learning pertaining to microcredit and involving CBOs under CBFM-2 project, other local institutions, and fisher households.

A qualitative research approach was followed in this case which was supplemented by quantitative data. Several Participatory Rural Appraisal tools, such as interviews (households) by administering semi-structured questionnaires, key informant interviews, focus group discussions, in-depth case studies, and mini-workshops were used at different stages of the research to attain the objective of the study. Together with local communities and other relevant stakeholders the research purposively selected three CBOs and three microcredit women groups in three different villages of Hakaluki haor.

The research findings revealed that microcredit played a significant role in socio-economic development of Hakaluki haor, especially household income increment, livelihood diversification, creation of self-employment, poverty reduction and women empowerment though it entrapped few households in vicious cycle of poverty. The research established that CBOs are instrumental and essential for community-based natural resources management through empowering the local communities, and NGOs are important for mobilizing local people, capacity building and providing legal services to the community. It was evident that CBOs faced challenges towards its sustainability due to limited resources and wetland policy changes by the government. The study also revealed the evidence of social learning through microcredit operation and project intervention which changed their perceptions and fisheries management practices. Reforming operational mechanism of microcredit, national wetland leasing policy and legitimating CBOs can remove the challenges of microcredit and help the CBOs to be sustainable. Future research is encouraged to reveal the other issues of microcredit and community-based organizations sustainability.