Message-ID: <3.0.32.19990501084454.006b01f0@ns1.bangla.net> Date: Sat, 1 May 1999 22:19:25 +0600 From: Carlos Ani <mailto:carlos@BANGLA.NET> Subject: Banking on Poor Rural Women To: mailto:INTDEV-L@pete.uri.edu
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Banking for Poor Rural Women in Bangladesh
The article below was published in the papers by ASA - one of the fastest growing microfinance institutions in the world - regarding their basic approach in providing microcredit to poor rural women. The article also describes the savings products that ASA offers. Read on.
Carlos Ani MICRONEWS Dhaka, Bangladesh
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Banking on Poor Rural Women of Bangladesh
by Mohammed Azim Hossain
WOMEN in Bangladesh have a very low access to education; they don't have enough knowledge regarding health, hygienic conditions, and preventive health awareness. The rural women are mostly involved with household work but they don't get enough food. There is a custom in Bangladeshi society where women take food at the end after everyone has taken their food. Sometimes, they pass whole day without food. Due to the shortage of food women are suffering from various diseases such as acidity, peptic ulcer and severe pain in the stomach.
The rural women are not able to choose the number of children. Society force women into early marriage, even then they feel pressure to bear child before maturity. According to UNFPA report 1999, female literacy rate is only 35 per cent.
In the existing socio-economic and male dominated administrative structure women are victims of discrimination within the family as well as in society. Reducing discrimination and acceptance of women in society will empower women.
Empowerment will help solve discrimination, raising awareness, improve health conditions and increase literacy rates. But the big question is how to empower poor women.
Employment is the key element to empowering women. Due to the lack of employment opportunities among illiterate rural women in our society, there is only one way to empower them - engaging them in some income generating activities.
ASA has designed a well-defined micro-credit programme for the poor women.
It is true Bangladesh is one of the most successful countries in the world regarding microcredit. According to CDF (Credit and Development Forum) reports, at least 850 organisations are involved in micro-credit activities, unofficially assumed to be more than 1,000 organisations. A glance at microcredit statistics of 369 organisations excluding Grameen and commercial banks as of June 1998 reveals that total active group members were 7.17 million.
As per BBS (statistics agency) reports, nearly 48 per cent of the population lives below the poverty line i.e., 12 million families. On the basis of the selection criteria by NGOs of one member per household, it can be assumed that a total of 7.17 million households are covered by the microcredit organisations.
To implement the savings and credit programmes there is need to follow specific systems. ASA's microfinance program for women self-employment is described below:
Step one: Group formation, poor women make groups of 15 to 25, averaging 20.
"Poor women" mean those not able to take 2,122 kcal per day. They are 18-55 years old landless (having less than 0.5 acres of cultivable land) women with monthly family income not exceeding Tk 2,000.
Women must also be willing to participate in and physically capable of income generating activities and they should not be currently affiliated with any other credit lending organisation.
Step two: Conduct weekly group meeting and development dialogue for awareness. "Development dialogue" means discussing their day to day problems and trying to identify the best solutions.
Step three: Collect savings in the group meeting. There are several types of savings services offered by ASA for poor women such as:
i. Weekly savings: All group members save weekly at least Taka 10. [Note: 49 Taka equals one US dollar].
ii. Voluntary savings: For every group, there are some capable group members who save more than this weekly savings amount. Those who are able to save more than the fixed weekly savings amount may save more as voluntary savings.
iii. Long term savings (LTS): Deposit Pension Schemes (DPS) are well known in our country, especially in urban areas. In rural areas, there are no banking facilities; people want to save monthly fixed amount through DPS.
ASA offers poor people the opportunity to save monthly fixed amounts out of weekly regular and voluntary savings amounts.
iv. Associate members' savings: There are some poor women, not ready to take credit from ASA, but they want to save weekly or occasionally. ASA allows poor people to save weekly even though there are no obligations for them to attend group meetings. All types of savings may be withdrawn at any time. Associate members savings programme objective is to create a loanable fund for the poor.
Step four: Disburse credit for income generating activities to the women group members. After 12 weeks of membership all group members are able to get loans. Initially women group members will get Taka 4,000.
Preconditions for getting loans for women group members are
i) Completion of 12 weeks observation as member.
ii) Regular attendance in the group meetings and regular savings.
iii) Awareness about rules, regulations and objectives of the groups.
iv) Know how to sign their own names and being serious about the programme.
v) Regular members who have paid their previous loans and who attend the weekly meetings regularly.
vi) Members of other credit oriented development organisations or loanees of commercial banks are not allowed to get ASA credit.
vii) The members should have previous experience on the proposed scheme or small business for which credit is sought.
viii) The members should be partly involved in his/her proposed scheme or small business.
ix) Knowledge of calculation of income, expenses profit and losses of the scheme or small business.
After the approval of credit by the Unit Manager, credit disbursement is done in presence of the Credit Officers (COs) in the Unit office. The member signs the ASA master rolls where address and name of scheme is mentioned. The COs enter the name of the members in the ASA credit registered book.
Step five: In the group meeting credit instalment will be collected. Member repays the loan in 45 equal instalments with a 12.50 per cent service charge within the year.
Women borrowers must repay weekly instalments of Taka 25 per Taka thousand of loan. Payment begins two weeks after the loan is disbursed.
No payments are received for three weeks for week-long holiday especially two weeks for Eids (Muslim holidays), one week for annual vacation and no payments are received on the national holidays.
Each group member maintains a passbook where the savings, loan and instalment payments are recorded.
The Credit Officer signs the passbook in a particular place. Credit Officer will maintain group-wise savings and credit register. The Unit (branch) manager has a summary register that is called the Unit Manager register.
One unit has four Credit Officers, one Unit Manager and one support staff. A Unit must form 72 groups and organised at least 1,440 poor women. The Unit office should be able to meet their all expenditures from incomes derived from lending within 12 months, counting from the date of opening of the branch or unit.
Some credit analysts agree that ASA maintains a 100 per cent recovery rate, showing that borrowers are benefiting from loan.
About 90 per cent of the borrowers have utilised there loan amount, 100 per cent of the members can sign their name, 90 per cent immunise their children, 95 per cent can prepare oral saline solution (to treat diarrhea), 55 per cent take advice from physicians, 75 per cent send their children to school, and 80 per cent of group members contribute to major family decisions.
All this leads to empowerment of poor women.
Basic characteristics of ASA's micro-credit programmes are
1) Commitment: All ASA staff from the Chief Executive to field level grassroot workers are committed to the implementation of micro-credit services. None are found demoralised.
2) Sustainability: All staff knows their salaries, allowances and office expenditure depend on income from microcredit activities. If they are able to improve the quality of their service and quantity of loans and incomes, then they are able to get more income and get more salary. Over-all, ASA's micro-credit programme is able to meet all expenses related to microcredit activities from interest incomes.
3) Systems: It has been found that ASA's implementing systems are easier than the present banking systems, even when compared with other micro-credit organisations. ASA's accounting, MIS, record keeping etc., are easily implementable from the grassroot level to top level.
4) Accountability: All staff try to do their work honestly. The staff know their duties and are accountable. Dishonesty is dealt with immediately and with strictness.
= = = = = = end of news article = = = = = =
If you want further information about ASA, send an email to mailto:<micronews99@iname.com> with the message "send basic info about ASA".
If you want to contact ASA, you may send an email to Mr Shafiqual Haque Choudhury, Chief Executive, ASA at <mailto:asa@bd.drik.net>
There is a free paper containing a summary of research study on the role of microcredit in the empowerment of women. If you want a copy of the paper, just send an email to <mailto:micronews99@iname.com> with a short message like "send paper on empowerment of women".
The article above is brought to you by MICRONEWS - your electronic newsletter on microfinance and poverty alleviation. To subscribe, send an email to <mailto:micronews-subscribe@egroups.com>
= = = = = = = = = = = = = = = = = = = = = = =
------------------------------------------------------------------------- SHARENET - electronic mailing list for microfinance professionals. Practical give and take. Sharing of valuable information. To post message: send email to mailto:sharenet@egroups.com To subscribe: send email to mailto:sharenet-subscribe@egroups.com To Unsubscribe: send email to mailto:sharenet-unsubscribe@egroups.com Moderator: Carlos Ani - <mailto:carlos-ani@mail.com> --------------------------------------------------------------------------