Dhaka, Oct. 26 -- In a quiet corner of Ramgati upazila in Lakshmipur, 32-year-old Aklima Begum sits beside her courtyard loom, a neat pile of white yarn at her feet. "Each tupi takes me about two hours," she says, holding up a finely crocheted prayer cap. "I make about four or five a day. I never thought something made with my hands would travel abroad."

Aklima's craft is part of a transformation sweeping across rural Bangladesh, one that binds finance and faith, skill and survival-as microfinance institutions (MFIs) evolve from traditional loans into micro-enterprise facilitators. Handmade tupi production, once a small domestic craft, now quietly employs hundreds of thousands of women.

The evolution of microfinanceBangladesh's microfinan...