www.cdss.ingeniousbd.org

Poverty Alleviation from Islamic Perspective: Lessons from Grassroot Experiments

Dr. S. M. Ali Akkas∗∗∗∗

Email: akkas54@gmail.com, info@cdss.ingeniousbd.org

Web: www.cdss.ingeniousbd.org

1 Introduction

In spite of phenomenal growth in NGO activities in line with target group approach and subsequently imitated by GOs, amelioration of poverty in Bangladesh has been evidently marginal measured by population below poverty line reducing from 53% in 1991-92 to 36% in 1996-97. The situation is further confirmed by the statistics that by late 1995, the Grameen Bank and NGOs could cover around only 25% of the target group households, with Tk. 16,568 million (US$ 404 million) in loan outstanding.

1 These target group people are not necessarily the

poorest. The question arises as to why the poorest are left out. And keeping them out of reach

what is the justification for the currently pursued poverty alleviation programs? Does this situation not warrant for rethinking or at least re-approaching the existing poverty alleviation programs run by NGOs? Are the government safety nets are directed towards filling the gap and, if so, to what extent? In absence of a wider and effective government safety nets what is to do exactly in the present situation?

The aims of this paper are firstly, to show the current status of poverty alleviation approaches in Bangladesh in respect of the coverage of the poor, particularly the hardcore poor by the NGOs and government. Secondly, how much of the poorest of the i.e., the hardcore poor are covered by poverty elimination programs of Islamic NGOs, if any. Thirdly, how far the Islamic NGO programs are different from that of conventional NGOs in terms of program nature, coverage to the poorest and, if any, to what extent. Fourthly, an overall length and breadth of Islamic NGOs has been brought into picture along with two specific cases namely: Rural Development Scheme of Islami Bank Bangladesh Limited and Hilful Fuzul Samaj Kallyan Sangstha of Jhalokathi district.

2 Status of Poverty Alleviation Approaches in Bangladesh

Both the lower and upper poverty lines indicate decline in poverty after 1991-92. The incidence of the very poor declined from 43 percent of the population in 1991-92 to 36 percent in 1995-96; the incidence of the poor declined from 59 to 53 percent. Forty percent of the rural and 14 percent of urban population was very poor. Of the nationally 53 percent poor population, 57 percent was of the rural, and 35 of the urban population. Urban poverty has declined the most. Ninety percent of the very poor and 89 percent of the poor live in rural areas.2 Twenty three million people are poorest of

the poor in preponderantly rural Bangladesh.

∗ Dr. Akkas has been working in Planning Commission, Bangladesh as Deputy Chief (SHD). The views expressed in the article is exclusively of his own and in no way represent that of Planning Commission.

1 Wood, G. D. and Sharif, I. A. 1997. Who Needs Credit ? Poverty and Finance in Bangladesh. Dhaka: University Press Limited. pp. 373-374.

2 World Bank: Bangladesh: From Counting the Poor to Making the Poor Count. April 29, 1998. Pp.6-7.

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A short account of the successes and limitations of micro-finance may be listed as below.

2.1 Are the Hardcore Poor Leftout by NGOs?

It is now widely recognized that NGOs have grossly failed to bring the people under extreme poverty3 (representing 36% of total population) under their program coverage. World Bank, in one of its recent papers “Reaching the Poorest of the Poor: Some Actionable Recommendations”

4, has provided following observations: “NGOs have been

increasingly switching away from social programs and getting involved in micro-credit

operations to support their activities, particularly with the decline in available grant funding.

However, their borrowers have generally not been the poorest, who are unable to meet the credit

worthiness standards and repay quickly. Since NGOs providing micro-credit have to deal with

banks they have been unable to move away from urban and semi-urban areas to the rural areas

to cater the needs of the poorest.”

The key findings come out of the observation are:

• Poorest are generally out of the reach of NGO programs

• NGOs lending criteria screen out them to be eligible for credit

• NGOs, for their nature of lending mechanism, are unable to move from urban and semi urban to the rural areas.

UNDP’s observation is also consistent with that of the World Bank. Those who have benefited from poverty alleviation programs has indicated that the poorest of the poor are consistently neglected for a wide variety of complex reasons, and have been steadily increasing over time.5 Based on above accounting it can be estimated that about 25.5 million people are poorest of the poor in Bangladesh of which 23 million stay in rural areas who are out of the reach of NGO program coverage.

2.2 Why the Hardcore Poor are Leftout?

The country’s hardcore poor are left out, either by themselves, who self-select out (because they have neither the resources to pay back, nor do they consider themselves creditworthy), or by the votaries of the credit program who “edge” them out since the implied poor recoveries reflect poorly on the NGOs and their field workers. There may have other structural factors at work, in the size of the average loans as being too big for the hardcore poor to handle, or in the absence of a differential “soft” lending terms for these poor, both of which act somewhat as entry barriers for the hardcore poor.6

2.3 Emerging Issues and Constraints for the Conventional MFIs

The existing MFIs have to strike a balance between their capacity to self-finance and the need to maximise the coverage of the poor particularly the hardcore poor. This has led to emerge a few important issues and concerns as follows: (i) Micro-finance services, for their institutional sustainability, must include a complementary package that adequately addresses the need of the poor for both short and long term savings, provisions for consumption loans and risk-mitigation insurance coverage.

(ii) Strategizing for an effective credit and finance delivery system must also take into consideration both the promotional and protections needs of the borrowing poor.

(iii)Since the poor are dependent on multiple sources of livelihood and support (i.e., from subsistence farming to daily wage labouring, and from peddling and petty trading to

3 BBS, CIRDAP, H.Z. Rahman, 1998. 4 World Bank, May 12, 1998. “Reaching the Poorest of the Poor: Some Actionable Recommendations”. P.2 5 UNDP. April, 1998. Issues paper by LCG Sub-group on Poverty: Reaching Poorest of the Poor. Unpublished. 6 Fatmi, N. E. Towards a Sustainable Poverty Financing Model: The Proshika Approach. Paper presented at the

IDPAA Workshop on Poverty and Finance in Bangladesh: Emerging Institutional Issues. Dhaka: July 8-11, 1998.

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seeking out and accessing assistance, financial or otherwise from a variety of sources, private, governmental and non-governmental), so only a comprehensive and versatile financial services’ package cater for. In spite of that most of the micro-finance lending institutions serving the poor have been

able to record a significant recovery performance and an increased ability on their part to achieve institutional sustainability, their successes are questioned due to the following sets of circumstances:

(a) The impact of a loan on borrowers’ income being related to the level of income, MFIs’ credit schemes are more likely to benefit the incomes of the middle and the upper poor which is otherwise referred to as non-neutral scale effect. Institutions seeking for their financial viability are therefore likely to focus their lending to this section of the poor.

(b) The above affluence bias judging from institutional sustainability perspective creates temptation for the not-so-poor to be members of the credit programmes for the following reasons: � On risk grounds the hardcore poor are screened out compared to the not-so-poor. � In cases of sudden or eventual losses, the not-so-poor are more likely to emerge as a more shock absorbers due to their “other” income sources that are not really the case with the hardcore poor.

� There being a strong linkage between poor recovery and the poor performance of the hardcore poor, this leads to systematic “edge out” of the hardcore poor from the NGO credit programmes.

2.4 Proshika Approach to Capture Hardcore Poor

The key insights into Proshika’s credit modelling is to be found in the organisation’s success in pioneering an approach that puts human development at the centre of vision. The wherewithal for such human development comes from an empowerment process whereby poor is conscientized, equipped with organisational and practical skills, supported with needed resources, and infused with the confidence and determination necessary for taking actions to improve both their social and economic lives. Proshika’s integrated inter-sectoral development strategy with multi-pronged intervention process to achieve the dual objectives of an outreach programme to reduce poverty and in enabling the poor to be socially, economically, culturally, and environmentally empowered involves a core programme component called “Employment and Income Generating Programme (EIGP)” with the following building blocks:

• A conscientized and enthused groups of the landless and disadvantaged

• Saving of these groups

• A special provision of credit from a Revolving Loan Fund

• Technical assistance component providing skill and management development training and on-the ground technical advice and support, and

• A provision of marketing assistance where needed.

2.5 How Effective the Government Safety Net Programs in Poverty Alleviation?

Public Expenditures

Effective public spending, including spending on rural and urban infrastructure in addition to social sector programs and safety nets, can reduce poverty. Social sector programs, i.e., health, education, and safety net programs are the fastest growing public expenditures in Bangladesh. In 1989-90 social expenditures made up 10% of total Annual Development Program

4

Public Foodgrain Distribution

0

200

400

600

800

1000

1200

1990-91 1991-92 1992-93 1993-94 1994-95 1995-96

Thousand Tons

Wheat

Total

FFW

VGD

FFE

TR

(ADP) outlays. By 2000, according to the Fifth Five Year Plan, ADP expenditures on social sectors will amount to 30% of total ADP spending (more than Tk. 6300 crores).7 Most of this rise will finance education and health, two sectors that are important for the poor. But by dint of general nature, remoteness and lack of access and affordability the poor benefit less or in most cases these provisions are out of the reach of the poor, particularly of the poorest except the safety net programs specially designed and targeted for them.

Government Safety Net Programs

Public safety net programs can also protect the poor. Do these programs attain their objectives? Are they well-targeted? Three biggest government safety net programs are Food For Works (FFW), Food For Education (FFE), Vulnerable Group Development (VGD) Program (for dis- advantaged women), and Test Relief (TR). Among these programs Food for Works is the largest, but the fastest growing and second largest program is the Food for Education.

Shortcomings of Safety Net Interventions

Food Assisted Interventions

1. FFP and VGD generally address only the immediate needs of the poor and do not promote sustainable livelihoods for the beneficiaries; for longer term impact such interventions need to be supplemented by support services for enhancing the capabilities of the ultra poor.

2. Fail to address acute food security needs during periods of seasonal deficits 3. Compete with agricultural activities and labour demand 4. Marginally reach geographical areas of extreme poverty 5. Are costly.

Education Interventions

1. Variations exist within the poor households themselves, the poor households in general receiving nearly three times more benefit than the ultra poor

2. Leakages from FFE to non-poor groups are estimated to be as high as 26%.

7 Ibid. p.37.

5

Micro-finance FY97/98

NGOs

70%

Is-NGOs

1%

GOs

29%

-

2 , 0 0 0 , 0 0 0

4 , 0 0 0 , 0 0 0

6 , 0 0 0 , 0 0 0

8 , 0 0 0 , 0 0 0

M e m b e r s

N G O s F Y 9 7 * I s la m ic N G O s F Y 9 7

Num be r o f fo re ign funded Loca l and Fo re ign

NGOs in 90s

0200400600800

100012001400

1990

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

Loca l NG O s

Fore ign NGO s

To ta l

2.6 Comparative GO, NGO and Islamic NGO interventions

A wide spectrum of anti-poverty programs are in practice in Bangladesh both at governmental and non-governmental levels. Available statistics shows that in 1997 Conventional NGOs have played a leading role in poverty alleviation programs in Bangladesh. Compared to NGOs’ 70% contribution to micro-credit financing, GOs and Islamic NGOs provide respectively only 29% and 1%. This depicts a very insignificant role of Islamic NGOs in the poverty alleviation initiatives in Bangladesh. It should be noted that Islamic NGOs include only 24 responding organisations out of 58 registered under Association of Muslim Social Welfare Organisations (AMWAB). Similarly, figure under GOs does not include Grameen Bank credit operation which may itself account for about ….. % of total poverty alleviation programs in Bangladesh. Table- depicts that out of total Tk. 16,271 million (Tk. 1627.1 crores) disbursed, conventional NGOs (363 donor-funded NGOs) disbursed more than two and a half times than that of done under different types of poverty alleviation programs of the government including government safety net programs like Food for Works, Food for Education, Vulnerable Group Feeding and Test Relief. Program coverage in terms of reaching to number of target group population, Islamic NGOs

account for less than 5% of compared to that of the conventional NGOs. Against 6.6 million members attached to conventional NGOs, Islamic NGOs have been able to reach 0.4 million target group population.

NGO Programs

Some 20,000 NGOs have registered to date with the Department of Social Welfare. The NGO Affairs Bureau has registered 1,185 foreign-funded NGOs by November 1997, most of them are local. The figure includes 140 foreign NGOs.

Grameen Bank and NGOs could cover around only 25% of the target group households, with Tk. 16,568 million (US$ 404 million) in loan outstanding.

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Successes

By late 1995, the Grameen Bank and NGOs covered around 25% of the target group households, with Tk. 16,568 million (US$ 404 million) in loan outstanding.

8 Coverage varies

substantially from area to area and between social groups. Areas with poor roads, low level of economic activity and weak NCB infrastructure have benefited little from micro-credit. NGOs and Grameen Bank have performed much higher levels than government credit schemes and their achievements compare very favorably with all other anti-poverty strategies in the country. Results have been so impressive that Bangladesh has now been a center of micro-credit ideas, although it is still a recipient of ideas of savings. Currently, most of the savings generated by these institutions tend to take the form of "required fees" for receiving credit, only to be recycled into Revolving Loan Funds and not generally withdrwable. Deposit banking has not been experimented with by these institutions, although other countries have made successful advances in this area.

Constraints

While these institutions have managed to extend micro credit services to the poor, all the major NGOs and Grameen Bank admit that they have serious problems in reaching the hard core poor, resulting in limited coverage. They have required high level of subsidy to establish their programs, provided by donors. However, with high recovery rates, increased effective lending interest rates and improved management, subsidy dependence is dropping. A number of factors constrain the performance and outreach of NGOs and the Grameen Bank.9 These:

3 Need for Rethinking Conventional Approach to Poverty Alleviation

The level of success in reducing poverty in Bangladesh has been achieved by several socioeconomic interventions through GOs and NGOs of which micro-credit approach gains wider appreciation in spite of its limitation.

Latest findings also confirm that even the most successful NGOs face the challenge of their organizational sustainability along with the problem of borrowers sustainability.

A rapid look on the limited success and constraints poses a number of fresh questions on the conventional NGO programs.

The question arises as to why the poorest are left out. And keeping them out what is the justification for the currently pursued poverty alleviation programs? Does this situation not warrant for rethinking or at least re-approaching the existing poverty alleviation programs run by NGOs? Are the government safety nets are directed towards filling the gap and, if so, to what extent? In absence of a wider and effective government safety nets what is to do exactly in the present situation?

In view of the above questions the time has come to have a second look on the analysis of the causes of poverty and the strength if not effectiveness of the design and delivery system of the mass-discussed target-group approach. This is in no way undermining or negation of the contribution of NGO movement in fighting poverty but to draw attention of the need for improvement and search out new possibilities or innovations. It can not be denied that whatever is being done and with whatever successes by Islamic NGOs, owe significantly to the NGO concept of development in terms of approach, design and delivery mechanism. Still the inability

8 Wood, G. D. and Sharif, I. A. 1997. Who Needs Credit ? Poverty and Finance in Bangladesh. Dhaka: University

Press Limited. pp. 373-374. 9 Ibid. p. 173.

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of the NGOs to reach the hardcore poor has shattered the confidence on current approaches and leads to think for new approach, design and delivery mechanism.

4 Rural Development/Financing under Islamic Framework: Field Experiences

4.1 Review of the Poverty Alleviation Initiatives by Islamic NGOs

Rural development initiatives under Islamic framework in Bangladesh are of recent origin. With some rare exceptions the initiatives in this line are of the phenomena of nineties. Even those who started earlier can hardly be termed as rural development initiatives. Rabitat-al Alam Al-Islami is perhaps the only organisation that started its relief activities in 1977 among the rahinga refugees and then extended its operation among the biharis in Dhaka and tribal people in Chittagong Hill Tracts and Rangpur. Origination of the organisations like Islam Procher Samity, World Assembly of Muslim Youth, Islamic Education Society can be traced back to 1970s but they did not have any credit component in their programs. Few dozens of Islamic NGOs are working with micro investment as one of their program components from end eighties or early nineties.

At present 58 Islamic NGOs are working in Bangladesh. They can be divided in to five categories in terms of program type as follows: (a) Organisations with credit only as program component (b) Organisations with credit plus as program components (c) Organisations with relief and rehabilitation as program component (d) Organisations with education, culture and research as program components (e) Organisations with preaching as program component Table-1 shows that 10 organisations are working with credit only approach whereas 35

organisations are operating on credit plus principle having program components like non formal education, health and sanitation along with micro investment. Three organisations are seen to be doing relief and rehabilitation, four are engaged in education, cultural and research activities and two in preaching. Organisations with either ‘credit only’ or ‘credit plus’ approach, follow target grouping strategy in their investment financing and apply ‘bai muazzal’ or deferred payment as financing technique. Table-2 provides information on 24 organisations as regards their year of establishment,

coverage area, number of groups and members belong to each of them and the outstanding investment they have made in 1996. A rapid look on the year of establishment of these organisations depicts that except very few like Muslim Aid Bangladesh, Bangladesh Chasi Kallyan Sangstha, Bangladesh Masjid Mission and Hilful Fuzul Samaj Kallyan Sangstha the rest of the organisations came into being after 1994. Within this short period of time the organisations have formed 10,820 groups comprising 407,064 members. They have so far invested an outstanding amount of Tk. 108,089,693. Compared to conventional NGO activities all over Bangladesh, extent and coverage of

Islamic NGOs are extremely insignificant. While conventional NGOs have …….. members and outstanding of Tk. …….., achievement of Islamic NGOs is not more than …… %. Evolution of Islamic NGOs in Bangladesh is a response to the urge of safeguarding Islamic

way of life in the face of massive penetration of ‘sud’ or interest in rural areas through conventional NGO approach. One of the glaring feature of these initiatives are exclusively indigenous in terms of organisation and source of fund which are considered to be building blocks for any effort towards sustainability.

NGO activities in Islamic line are yet to evolve rural development scheme as perceived by Islamic economists. It has not been in most of the cases that rural development or rural financing

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schemes under Islamic framework have been organised centring the mosque. These organisations have come into being as a result of spontaneous local initiatives. To the extent information are available none of the organisations have been able to introduce a complete and effective package of borrower graduation as yet since organisations with credit plus approach could not yet introduce regular asset transfer mechanism based on Zakat. Similar to the conventional NGOs these organisations also do not allow beneficiaries/borrowers’ the access to their savings. Of course, considering the length of the period of their operation one can not expect such types of achievement in the so early phase of their evolution.

4.2 Rural Financing Scheme of Islami Bank Bangladesh Limited

Islami Bank Bangladesh Limited envisions for an economic system based on equity and

justice. Taking into consideration that the majority of the population below poverty line live in rural Bangladesh, the Bank has devised a “Rural Development Scheme (RDS)” with a view to create employment opportunity for them and alleviate their poverty through income generation activities. The IBBL through its RDS project has been implementing integrated programs for the

landless poor, wage labourers and marginal farmers aimed at meeting their basic needs and promoting their comprehensive development. Conscientisation among the poor needs to be enhanced so that they can firm up their position in the socio-economic structure of the country. In order to consolidate their economic base invested money should be used in income generating activities so the poorer section of the population become self-reliant. RDS works for the realisation of that objective.

Rural Development Scheme of IBBL: Goals and Objectives

The followings are the important objectives of IBBL’s Rural Development Scheme objectives: 1) To bring the poorer population within an organisational framework by setting up certain rules and regulations with a view to free them from the curse of poverty and make them self-reliant thereby converting RDS into a self-reliant sustainable program;

2) To extend bank investment to agricultural and non-agricultural sectors in the rural areas; 3) To invest on employment and income generation activities of the rural population; 4) To provide self-employment for the distressed people; 5) Socio-economic development of the poor and distressed by group/centre formation; 6) To bring both male and female to provide employment under income generation activities and help them to attain self-reliance step by step;

7) To continue to support the self-reliance drive of the poor in their endeavour to capital formation from savings they make out of their increased income;

8) To help reduce and eventually stop, through enhancement of their income, the lending on high and exorbitant rate of interest by the village money-lenders, the advance sale of crops, land and mortgage of land by the poor during their acute needs.

9) To follow an approach of comprehensive development side by side their economic development; and

10) To provide financing for hand tube-well and housing in the areas.

Selection of Beneficiaries

RDS scheme of IBBL is target group-based. Beneficiaries of the scheme are thus landless, wage labourers and marginal farmers. Selection criteria for members of the target group are as follows:

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(a) Farmers owning up to 0.50 acres of land including sharecroppers; (b) Persons engaged in non-agricultural activities owning up to 0.50 acres land or landless; (c) Be permanent resident of the project area; (d) Borrower or defaulters of any other bank or organisation will by no means be the beneficiaries of the scheme;

(e) Females belonging to the families of the serial 1 and 2 above interested in income earning projects but unable due to dearth of money may form group and take the financial support;

(f) Distressed people may undertake income generating schemes in non-agricultural sectors such as cow/goat/duck/chicken etc. for their self-employment;

(g) Landless to be given priority in selecting target groups whose yearly family income must be below Tk. 15,000/-.

Group Formation and Management of the Scheme

Activities of the RDS scheme are organised in-groups. Each group consists of five members. People with same mentality, age and financial status who are trustful to each other are considered for group formation. Group members should be from the same village. A person being permanent inhabitant of the village and having land not more than 0.50 acre and annual income of his/her family not exceeding Tk. 15,000.00 is considered as eligible to be a member of a group. Not more than one member from a family can be member of a group and the group can not be formed with kith and kin. With these restrictions group members are free to choose their compatriot as they like. Group members elect their group leader and deputy group leader from among themselves. There can be 2 to 6 groups in a para, mahalla or village forming a Centre. Group leaders and deputy group leaders of all groups, in a meeting, elect a Centre Leader and a Deputy Centre Leader.

In order to formalise group formation and formation of the centre and that of the election of the group leader, deputy group leader, centre leader and deputy centre leader all members of the centre are required to promise themselves, through adopting resolutions that they will abide by the rules and regulations of the group/centre. They sit for a weekly centre meeting the date, time and place of which are determined by themselves according to their convenience.

Group formation and subsequently emergence of a centre are the result of constant effort and intensive supervision of a field supervisor. Generally a field supervisor is responsible to supervise 40 groups or 200 members. Field supervisor is recruited few months ahead of the group formation and initiation of investment activities. Soon after the appointment a supervisor is required to motivate people, mobilise supports, conduct base-line surveys, form groups and conscientise the group members. Preferably a field supervisor should be a local person with a minimum graduation degree.

The entire activity of RDS is co-ordinated and managed from a branch office of IBBL by a project officer who is responsible to a committee headed by the bank’s branch manager. The project officer supervises the activities of the field supervisors in the entire command area of its operation. He provides instructions and suggestion to the field supervisors in implementing the project. While forming groups the project officer attends the meetings. He organises training for the group members and ensures, through the field supervisors, the attendance of the group members in weekly meetings. He keeps a constant eye on the investment disbursement, timely repayment of weekly instalments and savings deposits and adherence of other rules and regulations by the group members. Investment vouchers preparation, filing of documents and production of monthly investment balance sheets are among the few other regular activities of a project officer.

Collateral-Free Investment Financing

Investment financing under RDS program of IBBL is generally collateral-free. Extremely rigorous supervision and mutual guarantee provided by each member of the group have become

10

effectively a good substitute for collateral in traditional sense. In addition to that, strict adherence to group rules and regulations ensures appropriate selection of borrowers.

Of course, fish culture in ponds and purchase of agricultural and irrigation implements require support collateral in the form of equitable mortgage. Moreover, each member of the group are required to provide personal guarantee for his group.

Investment Financing: Mechanism, Modes and Avenues

Investment financing starts after at least three months observation of the group members in terms of regularity in their attendance in weekly group meetings, centre meetings, and deposit of their personal saving. Two members from each group selected by the group members are considered for investment financing. Rest of the group members become eligible for finance after recipient group members have paid their 2 or 3 repayment instalments.

Investment proposals recommended by group/centre members and collected by field supervisor are approved, after careful checking and scrutiny, by the Investment Committee headed by the Bank’s Branch Manager with the Second Officer or Investment Officer and the Field Supervisor as members. The Investment Committee meets once in a month. Soon after approval of the investment proposals by the Investment Committee documentation takes place followed by financing under a particular investment mode. Banking as well as Shari’ah rules are required to be followed appropriately. Amount charged on an investment is 12% (i.e., profit 6%, supervision fund 4% and risk fund 2%). The Islamic modes such as Musharakah, Mudarabah, Bai-muazzal, Murabahah, Hire-purchase and Bai-salam are prescribed for application in financing income generating activities of the group members.

Recovery Process

It is believed that good recovery of invested money depends on fixing a well-thought-out instalment. Amount and number of instalments are to be fixed considering earning from the investment and the time interval takes in one investment-gestation-return cycle. The following considerations are taken into account while fixing an instalment: (i) For non-agricultural sector instalments may be on weekly/monthly/quarterly basis. Weekly instalments are preferred since it makes the borrower mentally tuned of repaying the instalments in short intervals leading to good recovery. Fixing of 45 repayment instalments along with profit are prescribed allowing two weeks time as gestation period, 2 instalments off during two Eids and 1 instalment optional if there is an accident.

(ii) Instalment fixation for agricultural sector depends on cropping cycle. In case of vegetable and green curry production, weekly instalment allowing longer gestation period is suggested.

(iii)Generally all investments are repayable in weekly equal instalments. In exceptional cases with income generated beyond the date of instalment payment, a timely token payment is advisable followed by payment of the residual amount along with the next due instalment.

Avenues of Investment

Other than agricultural activities seven categories of non-agricultural activities in the rural areas are financed under RDS program of Islami Bank Bangladesh Limited. The categories, number and the types of activities financed under each category are presented in Table-6.

Critical Evaluation of IBBL’s RDS

If considered in terms of reaching the poorest of the poor, RDS seems not to be different from either Grameen Bank or traditional NGOs whose target group approach, both with design and delivery mechanism, is essentially replicated by it, if not the modes of financing. This is reflected by the same selection criteria used by the RDS as have been generally applied by the conventional NGOs while selecting the group members that screens out the poorest of the poor. For example, the sole criterion i.e., the requirement of being permanent resident of the project

11

area and regular attendance in the weekly meetings for loan eligibility, is sufficient enough to disqualify the poorest of the poor to be the beneficiaries of the RDS program.

4.3 SUSTAINABLE DEVELOPMENT APPROACH - A CASE STUDY ON HILFUL FUZUL

It is hardly found in Bangladesh that poverty alleviation programs at non-governmental level are self-financed and originated and developed entirely on local initiative. Probably, Hilful Fuzul Samaj Kalyan Shansgtha (HF) is the only exception that emerges out of local initiative without taking support either from the government or from any donor agency of local or foreign origin. 10 Their main activities are still based on local resources mobilised and invested in the area of their operation through shares, deposits and savings of the members of the organisation. It is the recent phenomenon that the organisation has been taking some funds from Palli Karma Sahayak Foundation of the government to undertake specific program for the hard-core poor. In contrast to the so-called target oriented conflict approach to poverty alleviation programs, the HF presents a different design and delivery mechanism. It ensures participation of peoples from all strata and benefits each of them. It collects funds mainly from the rich and makes these available for the use of the poor. Thus the approach followed by HF may be called a target oriented harmony approach to poverty alleviation program. The guiding principles of the organisation are Quranic teachings which are free from sectarian approach to caste, creed and religion. The organisation is based in a far-flung rural area in the southern part of the country in the district of Jhalakathi. It was established on September 4, 1991 and was registered under the Department of Social Welfare on June 8, 1992 with Registration No. 77. The Head Quarter of the organisation is at Dapdapia bazaar under Nalchhiti thana of Jhalakathi district. HF has spread its activities in five thanas of two districts namely Jhalakathi and Barisal.

Design And Delivery System Of Hilful Fuzul Poverty Alleviation Programs

Poverty Alleviation Programs of Hilful Fuzul

Hilful Fuzul Social Welfare Organisation has been striving for the economic upliftment of the rural people, for the improvement of their social condition, for inculcating values in them and for the establishment of an interest-free transaction mechanism. It has been working for the rural people in different aspects related to their basic needs such as food, clothing, housing, health and education under the programs such as : A) Islamic Savings Project B) Co-operation programs C) Education for all D) Self-reliance and employment creation schemes E) Health and development activities.

Distinguishing features of Hilful Fuzul

10 Abu Naqi Rizwanul Huq, S. M. Ali Akkas and Zubair EnamulKarim ”Role of Local Initiative in Alleviating Rural Poverty: A Case Study of Hilful Fuzul” Vol. No. , 1997.

12

Four distinguishing features of HF have been identified. They are : (i) Credit operations of HF are based on profit and loss sharing; (ii) It receives deposits mostly from the rich and disburse (iii) them mainly among the poor; (iv) Credit operation is based on resources which are essentially mobilised from local sources. (v) Special programs are initiated by HF for moral upgradation of the beneficiaries.

The above special characteristics may also be considered as the indicators of sustainability. Particularly, lending operations altogether based on growing local resources can be a unique example of sustainability of the programs (if the source is itself sustainable). It is observed that locally mobilised funds have generated at the rate of 115% on and average each year. Table-15 demonstrates that cent percent respondents replied positively that HF's funds are locally generated. In the same table 90% of the respondents confirm that HF received deposits mostly from well-to-do and lends most of them to the poor. Further if the lending program is based on profit and loss-sharing it is more participatory in nature. It is by mechanism more sustainable. 75% of the respondents have told that HF credit operations are based on profit-loss-sharing (Table-15).

HF why sustainable Table-16 presents a summarised picture of why HF is a sustainable organisation in the field of community development. Cent percent of the respondents have told that it is sustainable because : (a) HF is a program which has ensured participation of people from all strata; (b) HF has been successful to mobilise resources from local sources on the basis of which it has

been conducting its lending schemes; (c) It has been successful to ensure cent percent repayment; (d) The lending operations have been consecutively being profitable; and (e) It has also been successful in maintaining effective supervision and the members have been

found to be very sincere and committed.

Critical Analysis of The Hilful Fuzul Case Findings

Feature, approach, design and delivery system of HF

Poverty alleviation programs of HF is aimed at fulfilling basic needs of the poorer sections of the rural people. Its programs include most of the areas of basic needs but have little application or coverage beyond promotion of economic well-being. In other words, it has extensive program coverage but still now the concentration lies on the income generating activities. The organisation has programs like lending to the poor, providing them with adult education and health facilities. Besides, they provide religious education to the members of the organisation. The special feature of the organisation is that it has been undertaking welfare activities for the poorer section of the population through generation of fund locally from people of all strata and giving loans to the poorer sections of people through interest-free transaction modes. They have their lending mechanism like Musharaka (partnership), Mudarabah (profit-sharing), bai-salam (deferred payment), Murabaha (Mark-up or cost-plus based financing) and Qard-

13

hassan. But among the modes Murabaha and Bai-salam are of the common practices. Practice of Musharaka was under experimentation in a very limited scale the study found. The approach followed by the organisation in alleviating poverty is obviously a target-group based. But the speciality of the program in designing its delivery system is that it collects funds from general local people irrespective of their level of income (in the form of share, term and fixed deposits and different types of savings scheme including saving schemes for the landless/assetless) and invest fund into activities entirely undertaken by the poor people. Loans are disbursed among the members in groups of five. Decision for giving a loan to a particular member of a group is decided by the group itself in the presence of an area supervisor. Funds are collected on area basis. The fund is further strengthened by the compulsory weekly saving and repayment mechanism. Unlike other conventional target-group approaches another speciality of HF delivery mechanism is that it has made a scope for its members to take interest-free loan, (Qard-hasan) at a certain percentage from his saved amount in periods of acute needs. Another feature of the HF poverty alleviation program is that most of the members of the organisation belong to young age group. There is a greater concentration of the program among the educated section of population. Illiterates including those who can only sign cover one third of HF members. In an area where literacy rate is very closer to the national rate, greater concentration of activities among the educated is worthnoting. If seen from the context of asset holding 86% of the respondents of the program belong from landless to marginal farmer category. This is undoubtedly an indication of the soundness of the program when seen from a perspective that lending activities of the association are completely based on locally mobilised funds. In short, credit operation based on profit-loss-sharing modes and loan operation principally among the poor out of funds mobilised mostly from the well-to-do section of population are the distinguishing features HF poverty alleviation program. the added dimension to this program is reinforced by some special activities aiming at moral upliftment.

Success and failures of Hilful Fuzul

Growing popularity and rapid expansion of the program might be considered as good indicators of success. During the last years of activities members have increased on and average 251 and the average yearly increase of deposits in different types of account has been increased 241. The total number of members increased from 583 in 1993 to 2605 by April, 1995. The percentage of members already received loans in nearly 40% (1994). During the period under study average amount of loans has increased from Tk. 1300/- to Tk. 6,000/-. It is recorded that 81% of the members received loan within two weeks of their application. Average monthly income of the beneficiaries increased from Tk. 2412/- in 1993 to Tk. 3328/- in 1994. Average yearly savings of the beneficiaries became double within the same period of time from an amount of Tk. 423.60 to Tk. 884.50, 100% of the respondents replied that compulsory weekly repayment of loans are invariably made. There have been very few cases of losses/defaulting which were easily offset by profits earned by HF from rest of the investment activities. 5.8 Most of the investment financing activities of HF are carried out under mark-up based mode. The mark-up charged varies from 20% to 48%. In other words, Musharaka and Mudarabah, the real mode for profit-loss sharing, are practised in a limited scale still on experimental basis. But the mark-up charged by conventional banking context is simply a mechanism of loan financing but in the case HF they

14

don't give any loan. Instead, they give money in kind. This ensures productive use of borrowed resources. This, in turn, helps timely recovers of borrowed money.

Sustainability

In terms of criteria set as indicators of sustainability, the HF poverty alleviation schemes have been found to be sustainable. 95% of the respondents recognised that their economic conditions had been improving gradually. Similar percentage of respondents replied that the program had been contributing to the improvement of employment situation in the area under HF operation. Members are getting increasingly self-reliant. Greater percentage of the HF members are becoming self-confident to lead a better life. 100% of the respondents noticed that HF activities had brought about social cohesion, improved relations among different social groups and ensured participation of people from all walks of life.

Sustainability defined in terms of expansion of activities (expressed in the number of members, growth of deposits and lending activities) indicates that the program has greater tendency to be sustained. Membership has multiplied by 2.5 times during 93-94 while deposits increased by 2.4 times during the same period. If recovery of loan is considered as another important indicator of sustainability, it appears to be that HF activities will go on sustaining since rate of recovery is nearly 95% during period under study.

Summary of the Hilful Fuzul case findings

As it has been found in the study that activities conducted by HF is distinct from conventional approach to poverty alleviation programs in terms of its sources of funds, delivery mechanism and acceptance of Islam as its core ideology. Reconstruct of material life in line with Islamic teaching is the core objective of HF activities. Perhaps HF is the only NGO whose larger amount of funds come from the indigenous sources mostly from the areas of its operation. A financing mechanism based on indigenous/local sources ensures the activities of the organisation to be self-sustaining particularly when the amount of transaction is found to be rapidly increasing. The delivery mechanism of HF has been found to be more beneficial and humanitarian by the allowance of members to take loan from their own savings scheme at time of acute needs. All these distinguishing features have made the HF approach an improved concept of poverty alleviation program. Seen from the viewpoint of social harmony and cohesion, the approach has been able to falsify the belief that successful poverty alleviation program must be designed essentially for the poor, of the poor by the poor. HF has been able to prove that a target group approach (pro-poor approach) may also work with the help, assistance and participation of people from all income groups.

In spite of the above strong sides of the HF poverty alleviation program it has some weaknesses as well. Of course, the weaknesses to be mentioned here might be due to very short period of its operation (three and a half years) which did not permit to do all the things required for a poverty alleviation program to be successful. Among the weaknesses, the few important ones are : (a) relatively limited and late application of social activities along side the income generating activities and (b) massive application of mark-up financing in conducting income generating activities. In the context of the above findings denoting strengths and weaknesses of HF, the following recommendations may be forwarded for considerations.

Among the poverty alleviation programs currently under implementation in Bangladesh (governmental and non- governmental) HF contains a distinct identity and emerges as a superior concept in terms of design and delivery system and sustainability of the program. In contrast to

15

the target-group based conflict approach, the program has been successful to ensure participation of different income groups of all strata in order to promote principally the well-being of the poor and ultra poor. The strength of the program is further exemplified by the mobilisation of funds from among the local people in the form of share, deposits and savings and utilisation of them for financing income generating activities undertaken by the poor. The organisation has in its canvas a number of socio-economic activities and environment protecting programs which provide a package for human development components. Though the social programs are yet to take full attention and consolidation, the attempt has been applauded by the local people-beneficiaries and non-beneficiaries.

The program has turned to be a program for the common people irrespective of sex, sect and caste. An increasing participation of female and non-Muslims ensures that the program is free from so-called religions fanaticism. The program has been successful to take use of the local culture and reinforced by pattern embedded in the heart of the local people. In other words, the programs has turned to internalise the development process which receives strength from within and not from outside.

5 Towards a More Effective Approach to Poverty Alleviation

The whole journey of development initiative for poverty alleviation, starting from community development approach to target group approach, has come to a stand still position by the sudden realisation that the hardcore poor are left out from all ongoing NGO-led development activities, be it conventional or Islamic. It is now widely accepted that design and delivery mechanism of the present NGO activities prevent the hardcore poor to exclude themselves from these programmes. Assessment of current NGO programmes uncovers two major inadequacies for which the hardcore poor find these unsuitable for them. These are:

� Lack of supportive minimum asset base of the hardcore poor to cope with the repayment mechanism of the current NGO programmes;

� Mobility of the hardcore poor for their survival earnings; � Remoteness or inaccessibily to the hardcore poor in terms high delivery cost of services challenging financier’s sustainability.

Design of an effective program is must take into consideration all the above mentioned inadequacies of the current NGO programmes: conventional or Islamic. Although the conventional NGO delivery mechanism may not have easy way out to reach the hardcore poor, Islamic NGOs should certainly have if their borrowed design and delivery mechanism is changed and oriented and derived from true spirit of Islam. Essential features/components of such a programme might be as below.

5.1 Essential features of a Suitable Islamic Poverty Alleviation Scheme to bring the Hardcore Poor in its Programme Coverage

The proposed scheme suggests some improvement in the Hilful Fuzul Samaj Kalayan Sangtha (HF) approach to poverty alleviation in order to fit it to be able bring the hardcore poor in its programme coverage. While assessing HF it has been mentioned that the programme is sustainable by all considerations: (a) as it is financed principally out of resources mobilised from its own areas of operations; (b) mobilised funds are loaned out to the poor under modes of investment generally applied by Islamic banks in Bangladesh following a target group approach as practised by conventional NGOs. That means, the programme has built a capital transfer mechanism from the richer sections of population towards the poor which has made it extraordinarily different from conventional NGO approach to poverty alleviation. Yet the programme is blamed with the same limitation as of the conventional approach this also could not touch poorest of the poor by their programme coverage.

16

5.2 Suggestive Change in HF Programme

However, some modifications in the following directions of the HF programme may bring an improvement to fit it to the requirement that will enable it to simultaneously create opportunity in its programme coverage for the hardcore poor in which they will find themselves integrated.

The HF may think for collecting Zakah on shares of members (eligible zakah payers or saheb-e-nisab) in order to create a Zakah fund. This will provide HF with an opportunity to build a fund from which it can transfer asset on regular yearly basis from the rich to the hardcore poor for preparing the latter to be eligible for receiving micro finance from HF. Of course, adding this programme component to the existing design and delivery mechanism of HF warrants to take sufficient care and attention in terms of promoting motivational programme to save original structure of the programme from potential crack down.

5.3 Suggestive Change in IBBL

Similarly, the IBBL may think for integrating Bank Foundation activities to that of its Rural Financing Scheme in order to bring the hardcore poor in its programme coverage. Other NGOs working under Islamic framework may also add this component to their original programme in order to create access for the hardcore poor.

6 Conclusion

Grass-root experience of poverty alleviation under Islamic perspective does not show much encouraging feature. Most of the Islamic NGOs are implementing their activities on the basis of a design and delivery mechanism borrowed from conventional target group approach. Almost invariably and commonly used mode for financing by these organisations is ‘murabaha’. Hardcore poor are rarely or not at all touched by these programmes. Compared to conventional NGOs coverage of moderate poor by Islamic NGOs is insignificant. In spite of that there are instances like Hilful Fuzul Samaj Kallyan Sangstha which have set some encouraging examples. They need to add or re-orient their programme so as to fit to the requirement of a truly Islamic organisations which can organise mini Islamic societies in their own areas of operation. This is important because Islamic society can not develop all on a sudden. Rather it requires concerted and constant efforts by each and every Muslim to build him and his surrounding and convert into Islamic communities as a result of which a solid ground for building Islamic society is built. Islamic NGO activities in the suggested direction may contribute to build such a society.

17

Table 1: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Number Program components

Credit Only

1. Al-Amin Social Welfare Organisation

2. Palli Mukti Path 3. Janokallyan Bohumukhi Shangtha 4. Al-Ahsan Sonchoy Samity 5. Siam Sohojogita Society

6. Sareka Pavilion 7. Agro Industrial Centre 8. RESCU 9. Kazipur Thana Shisu Kallyan 10. SWAB

10 1. Micro Investment for poverty alleviation

Credit Plus

1. Muslim Aid Bangladesh 2. Bangldesh Chashi Kallyan Samity 3. Bangladesh Institute of Habitat

Development 4. Bangladesh Masjid Mission 5. Islamic Social Development

Council 6. Jubo Academy 7. Confidence 8. Darus Salam Society 9. Dhansiri Bohumukhy Samabay

Samity 10. Hilful Fujul Samaj Kallyan Samity 11. Islamic Relief World Wide

Bangladesh 12. Islamic Aid Bangladesh 13. Islami Samaj Kallyan Samity 14. Noble Education & Literary

Society

15. Rabitat Alam al Alam Al Islami 16. Khetmat-E-Khalk 17. Model Bangladesh 18. Raquib Foundation

19. Povati Somaj Kallyan Samity 20. Rural Development Trust 21. Social Association for Future

Advance 22. AMAN 23. Parash Moni Samaj Kallyan

Sangtha 24. Al-Kuba Islamic Welfare

Trust 25. Hilful Fuzul 26. Paras Moni Seba Shangtha 27. Islami Kallyan Fund 28. ISRAP 29. Social Development

Organisation 30. Ideal Social Welfare Council 31. Social Development

Organisation 32. Al-Falah Am Unnayan

Sangtha 33. VICEO 34. D. P. SCEFM 35. Al Amin

35 1. Micro investment for poverty alleviation

2. Micro enterprise 3. Non formal

education and vocational training

4. Emergency Relief and Rehabilitation

5. Health and Sanitation

Relief and Rehabilitation

1. Islami Bank Foundation 2. Kuwait Joint Relief Committee 3. Monohardi Darul Islam Trust

3 1. Income generating programmes

2. Educational programmes

3. Relief and rehabilitation

Education, Culture and Research

1. Benevolence Trust 2. Disa Bangladesh 3. Darul Yatim 4. Islamic Education Society

5. Islamic Economics Research

Bureau 6. Al Manar Audio Centre 7. Islamic Centre

7 1. Non formal eduction

2. Health & sanitation

3. Orphanage program

4. Poverty alleviation

5. Nursery

Preaching

1. World Assembly of Muslim Youth 2. Islam Procher Samity

3. Bangladesh Institute of

Islamic Thought

3 1. Dawah program 2. Scholarship 3. Translation &

publication 4. Education &

training 5. Relief &

rehabilitation

www.cdss.ingeniousbd.org

Table 2: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Established in Working area No. of Groups No. of

Members

Outstanding

Investment (Tk.)

Source of finance

Credit Only

1. Al-Amin Social Welfare Organisation Patuakhali 360 3,325 2,271,000 Own area of operation 2. Palli Mukti Path Jhalkati 147 735 217,700 Own area of operation

3. RESCU Rangpur, Kurigram 114 2,540 15,502,000 Own area of operation

Credit Plus Own area of operation

1. Muslim Aid Bangladesh All over Bangldesh 82 1,428 14,398,915 Local

2. Bangldesh Chashi Kallyan Samity All over Bangldesh 6,655 355,455 7,200,000 Local

4. Bangladesh Masjid Mission All over Bangldesh 106 1,175 8,500,000 Local

5. Confidence Dhaka, Sirajgang, Pabna, Bogra 50 1,500 60,000 Own area of operation

6. Darus Salam Society Jhalkati, Rangpur 100 1,050 183,250 Own area of operation

7. Dhansiri Bohumukhy Samabay Samity Dhaka 18 850 1,500,000 Own area of operation 8. Hilful Fujul Samaj Kallyan Sanstha Jhalkati, Barishal, Patuakhali 745 16,205 27,085,000 Own area of operation and

a small portion from PKKSF

9. Islamic Aid Bangladesh All over Bangldesh 6 80 80,000 Own area of operation

10. Noble Education & Literary Society Bogra, Dhaka, Gazipur 47 830 2,594,000 Own area of operation

11. Model Bangladesh Dhaka, Sirajgang 50 500 250,000 Own area of operation

12. Raquib Foundation Dhak 130 2,600 640,000 Own area of operation

13. Rural Development Trust Mymensingh 78 1,750 10,037,000 Own area of operation

14. AMAN Lakshmipur 19 610 400,000 Own area of operation

15. Parash Moni Samaj Kallyan Sangtha Lalmonirhat 210 2,100 69,500 Own area of operation 16. Al-Falah Am Unnayan Sangtha Dinajpur, Rangpur 180 3,861 10,249,500 Own area of operation

17. VICEO Bogra 73 365 1,596,578 Own area of operation

18. D. P. SCEFM Bogra 151 904 590,250 Own area of operation

19. Ideal Social Welfare Council Kishoregang 35 285 565,000 Own area of operation

Education, Culture and Research

1. Disa Bangladesh Gazipur, Barishal 1,360 6,800 2,500,000 Own area of operation

2. Destitute Child and Human Centre Jessore, Satkhira 104 2,116 1,600,000 Own area of operation

Total: 24 10,820 407,064 108,089,693

www.cdss.ingeniousbd.org

Table 3: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Number Program components

Credit Only

1. Al-Amin Social Welfare Organisation

2. Palli Mukti Path 3. Janokallyan Bohumukhi Shangtha 4. Al-Ahsan Sonchoy Samity 5. Siam Sohojogita Society

6. Sareka Pavilion 7. Agro Industrial Centre 8. RESCU 9. Kazipur Thana Shisu Kallyan 10. SWAB

10 1. Micro Investment for poverty alleviation

Credit Plus

11. Muslim Aid Bangladesh 12. Bangldesh Chashi Kallyan Samity 13. Bangladesh Institute of Habitat

Development 14. Bangladesh Masjid Mission 15. Islamic Social Development

Council

16. Jubo Academy 17. Confidence 18. Darus Salam Society 19. Dhansiri Bohumukhy Samabay

Samity 20. Hilful Fujul Samaj Kallyan Samity 21. Islamic Relief World Wide

Bangladesh 22. Islamic Aid Bangladesh 23. Islami Samaj Kallyan Samity 24. Noble Education & Literary

Society

25. Rabitat Alam al Alam Al Islami 26. Khetmat-E-Khalk 27. Model Bangladesh 28. Raquib Foundation

29. Povati Somaj Kallyan Samity 30. Rural Development Trust 31. Social Association for Future

Advance 32. AMAN 33. Parash Moni Samaj Kallyan

Sangtha

34. Al-Kuba Islamic Welfare Trust

35. Hilful Fuzul 36. Paras Moni Seba Shangtha 37. Islami Kallyan Fund 38. ISRAP 39. Social Development

Organisation 40. Ideal Social Welfare Council 41. Social Development

Organisation 42. Al-Falah Am Unnayan

Sangtha 43. VICEO 44. D. P. SCEFM 45. Al Amin

35 1. Micro investment for poverty alleviation

2. Micro enterprise 3. Non formal

education and vocational training

4. Emergency Relief and Rehabilitation

5. Health and Sanitation

Relief and Rehabilitation

46. Islami Bank Foundation 47. Kuwait Joint Relief Committee 48. Monohardi Darul Islam Trust

3 1. Income generating programmes

2. Educational programmes

3. Relief and rehabilitation

Education, Culture and Research

49. Benevolence Trust 50. Disa Bangladesh 51. Darul Yatim 52. Islamic Education Society

53. Islamic Economics Research

Bureau 54. Al Manar Audio Centre 55. Islamic Centre

7 1. Non formal eduction

2. Health & sanitation

3. Orphanage program

4. Poverty alleviation

5. Nursery

Preaching

56. World Assembly of Muslim Youth 57. Islam Procher Samity

58. Bangladesh Institute of

Islamic Thought

3 1. Dawah program 2. Scholarship 3. Translation &

publication 4. Education &

training 5. Relief &

rehabilitation

Total 58

www.cdss.ingeniousbd.org

Table 4: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Established

in

Working area No. of Groups No. of Members Outstanding

Investment (Tk.)

Source of finance

Credit Only

1. Al-Amin Social Welfare Organisation Patuakhali 360 3,325 2,271,000 Own area of operation 2. Palli Mukti Path Jhalkati 147 735 217,700 Own area of operation

3. RESCU Rangpur, Kurigram 114 2,540 15,502,000 Own area of operation

Credit Plus Own area of operation

1. Muslim Aid Bangladesh All over Bangldesh 82 1,428 14,398,915 Local

2. Bangldesh Chashi Kallyan Samity All over Bangldesh 6,655 355,455 7,200,000 Local

4. Bangladesh Masjid Mission All over Bangldesh 106 1,175 8,500,000 Local

5. Confidence Dhaka, Sirajgang, Pabna, Bogra 50 1,500 60,000 Own area of operation

6. Darus Salam Society Jhalkati, Rangpur 100 1,050 183,250 Own area of operation

7. Dhansiri Bohumukhy Samabay Samity Dhaka 18 850 1,500,000 Own area of operation 8. Hilful Fujul Samaj Kallyan Sanstha Jhalkati, Barishal, Patuakhali 745 16,205 27,085,000 Own area of operation and a

small portion from PKKSF 9. Islamic Aid Bangladesh All over Bangldesh 6 80 80,000 Own area of operation

10. Noble Education & Literary Society Bogra, Dhaka, Gazipur 47 830 2,594,000 Own area of operation

11. Model Bangladesh Dhaka, Sirajgang 50 500 250,000 Own area of operation

12. Raquib Foundation Dhak 130 2,600 640,000 Own area of operation

13. Rural Development Trust Mymensingh 78 1,750 10,037,000 Own area of operation

14. AMAN Lakshmipur 19 610 400,000 Own area of operation 15. Parash Moni Samaj Kallyan Sangtha Lalmonirhat 210 2,100 69,500 Own area of operation 16. Al-Falah Am Unnayan Sangtha Dinajpur, Rangpur 180 3,861 10,249,500 Own area of operation

17. VICEO Bogra 73 365 1,596,578 Own area of operation

18. D. P. SCEFM Bogra 151 904 590,250 Own area of operation 19. Ideal Social Welfare Council Kishoregang 35 285 565,000 Own area of operation

Education, Culture and Research 1. Disa Bangladesh Gazipur, Barishal 1,360 6,800 2,500,000 Own area of operation

2. Destitute Child and Human Centre Jessore, Satkhira 104 2,116 1,600,000 Own area of operation

Total: 24 10,820 407,064 108,089,693

www.cdss.ingeniousbd.org

Table 3: Investment Avenues, Higher Limits and Duration

Investment Avenues Higher Limit Duration Remarks

Crop production Tk. 10,000/- Highest 1 (one) year

Crops of 21 varieties

Fish cultivation in ponds Tk. 25,000/- Highest 3 (three) years

Irrigation Tk. 5,000/- Highest 1 (one) year

According to need

Agriculture and irrigation implements

Tk. 25,000/- Highest 3 (three) years

10% borrowers equity

All non-agricultural sectors

Tk. 10,000/- Highest 1 (one) year

For 343 non-agricultural items payable in weekly instalment

Rickshaw, van and rural transports

Tk. 5,000/- Highest 2 (Two) years

Payable in weekly instalment

Hand Tube well Tk. 3,000/- Highest 3(Three) years

House-building materials

Tk. 15,000/- Highest 3(Three) years

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Table 4: Categories and the number of activities financed under RDS

Categories of non-

agricultural activities

Types of activities

1. Manufacturing and

processing:

R 126 activities

Bamboo works, cane works, pottery, muri making, snacks making, tailoring, sugarcane crushing, mending works, tin production, rickshaw making and mending, sweeping materials, sweet meat, furniture making, medicine production, umbrella mending, cake preparation, plastic works, net making, thread purchase, drum purchase, house mending, wool works, wheel mending, box mending, nut processing, kantha making, rickshaw-hood making, iron materials making, cap making, thread works, pickle preparation, printing works, tin purchase, radio mending, misri making, sawing, laundry works, procurement of machinery, candle making, sanitary works, welding, embroidery, dry sweats making, metallic net making, sweet cake preparation, cow-dung fuel balls, toy making, packet making, nimki making, cosmetic production, spectacle making, flour making, comb making, mosquito net making ghee making, rope making, lamp (kupi) making, chanachur making, jute goods fabrication, shoe making, mosquito coil making, hand fan making, quilt making, mustard oil making, jewellery works, chun making, mat making, chira making, saree making, etc.

2. Service activities:

33 activities

Rickshaw, barber shop, hiring of irri pump, sale of news papers, curt, bullock curt, mike hiring, feri boat, livestock treatment, horse curt, buffalo curt, dentist, boating, decorator service, baby taxi, construction works, sewing machine, rice machine, bi-cycle purchase, spray machine purchase, carpentry, wheat mill, van procurement, electric iron purchase, fan making/mending etc.

3. Trading 82 activities

4. Shops 74 activities

5. Hacking:

5 activities Bamboo basket, old cloths, peanuts grocery

6. Nursery:

10 activities Vegetables, water melon cultivation, ginger cultivation, brijal cultivation, turmeric cultivation, bamboo production, papaya production, chilli production and onion production

7. Livestock raising

13 activities

Milking cow, bullocks, cow fattening, poultry raising, sheep raising, duck raising, buffalo rearing, bees raising, pigeon raising etc