CENTRE FOR SELF-HELP DEVELOPMENT

Institute of micro-finance and cooperative development.

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Bangladesh MFIs have been Practicing Value Based Microfinance

The Centre for Self-help Development (CSD) organized three Exposure Visits of microfinance practitioners of different Microfinance Institutions (MFIs) and Microfinance Cooperative organizations (MFCs) of Nepal to share the onsite experience of best practices of microfinance in that country which is considered as the Mecca of microfinance in coordination with the Integrated Development Foundation (IDF), Bangladesh. All the three visits were participated by the board members, department heads, area managers and branch managers of MFIs and MFCs. The first visit was held from May 21-28, 2022, second from June 15 to 22, 2022 and the third from June 24 to July 2, 2022.

The main aim of the eight days visits was to observe and learn the best practices of the microfinance program and to familiarize Nepalese microfinance practitioners with the operational mechanism, strategies and other tools, techniques of the Bangladeshi MFIs.

The participating team members of the visits visited the Grameen Bank, the Integrated Development Foundation (IDF) and the Buro Bangladesh and had been a briefed on highlights of the organization, working modalities, achievement as well as the challenges they have been facing. The visiting teams also observed the operation of their branches, centre meetings and other social welfare projects. They interacted with the microfinance staff, members and their stakeholders.

The key learnings of the teams are that the Grameen model microcredit organizations in Bangladesh are sticked to the core values and norms of the microfinance. They have healthy competitions among MFIs to launch credit and credit plus programs for the betterment of their clients. They have designed member friendly credit products and credit plus projects analyzing their need, interest and capacity.

One of the visited organization the Grameen Bank which is one of the largest and also the pioneer of microcredit in the global arena has 9.78 Million Borrowers and the lending is 34,500 million USD. As the Grameen Bank has policy to work closely with members, staff have managed enough time to visit and interact with the members. It has requirement that the area managers have to attend one centre meeting and two loanee members while the branch managers have to attend two centre meetings and visit four members in a day. They are not practicing digital tools at the branch level. The major reason behind is that the digital tools are not member friendly, cost extensive and could create gap between staff and member. The Grammeen Bank has weekly centre meetings and it has appointed a Centre chief elected by the members. The Centre chief maintain the discipline of the centre and she knows all the members and their family well. She must make certification for the loan to every member of her centre. Similarly, the centre manager conducted two centre meetings in a day and 10 centre meetings in a week. This working modality benefited both members and the organization.

Similarly, the Grameen Bank has outstanding credit plus programs under CSR fund which has focus on the holistic development of the members. Every year the Grameen Bank staffs go to the households of the members and collect data about their progress from the loan they borrowed and about their sanitation, hygiene, education and other socio-economic conditions. After analyzing these data, the Grameen Bank ranked the members as those under poverty line, those at the poverty line and those upgraded from the poverty line and they design and revise their products accordingly.

The 100 percent members of the Grameen Bank now has access to education, safe water, sanitation and hygiene too. It has very popular products like bagger loan, education loan and many more. Likewise, it has been providing scholarships to 27,000 of member's children for higher education every year. Out of the 50 percent seats has been reserved only for girls. Similarly it has also client protection schemes to look after during the critical period such as death of the family members, period of natural disaster and in critical health issues. It has provided 75 percent ownership to its client members and remaining 25 percent to the government of Bangladesh.

The Integrated Development Foundation (IDF) is the second organization visited by the participants. It also has focused on the poor and the marginalized community by its microcredit and Credit plus program. IDF is not practicing digital tools at the branch level and the priority has been given to the physical visit with the members. IDF has bottom up approach for planning and policy formulation. Branch level staff develop plan and strategies and send it to the higher authority. Due to the good relation with the members, the plan made in branch is found to be effective and the programs become sustainable. The member to loanee ratio is above 82 percent. Similarly the loan utilization ratio is also better and repayment rate is above 99 percent.

IDF too has beggar loan program like the Grameen Bank. After having beggar loan the beggars have been involving in different income generation activities, giving up begging job and have made better livelihood. IDF has 260 active members under this beggar loan program and it has a lending of Tk 27 lakh and saving amount is Tk 54 thousand. Total of 130 beggars have already given up begging, are involved in the micro enterprises and also had upgraded in to the poor category so far. IDF has classified its poor and marginalized members on beggar, ultra poor and poor categories and set different indicators for all three categories.

The unique specialty of IFD is that it has been extensively involved in credit plus programs like health, education, insurance, sanitation and hygiene, enterprise and business development of the clients and also on biodiversity conservation. These programs have positive impact on repayment rate and on overall operation of its micro credit program. IDF has appointed 3 MBBS Doctors to provide specialized health services to its members and their families. IDF has also 70 paramedic doctors and paramedics one should visit two branch every day. Besides MBBS and Paramedics, it has also appointed health workers in all its 116 branches. The health worker only collect the health related information and make the members aware on health education. They do not have permission to provide medicine and any other prescriptions. If member found ill they refer to the paramedics and they can deal with minor cases in consultation with MBBS Doctors via telephone or video conferencing. IDF is also providing education services to the member's children. It just has also planning for the dairy business services to ensure market and to add value on the milk produced by its members.

Another organization visited by the team was the Buro Bangladesh which has also been fully committed and responsible to its clients and sensitive to launch member friendly products. The Buro Bangladesh has a vision to cost effective microcredit program. It has focused on to select cost effective and sustainable projects which is possible only after maintaining the good relation with the clients and keeping touch with them frequently.

All three visited organizations have carried out different types of insurances policies including health insurance, project risk insurance and livestock insurance efficiently without relying on any other insurance company.

The first 12 member team was coordinated by Mr. Dipendra Joshi Officer of CSD and consisted of Mr. Gyanendra Kumar Singh, Mr. Ramesh Kumar Shrestha, Mr. Dolnath Tripathi, Ms. Sarita Bhandari and Mr. Ram Kaji Bhuju, Mr. Mahesh Kumar Chaudhary, Mr. Nirmal Kumar Bohara, Mr. Surya Narayan Majhi, Mr. Sanjay Sah Kanu, Ms. Shova Silwal and Mr. Madan Kishor Mahato of the Swabalamban Laghubitta Bittiya Sanstha Ltd.

The second team of 12 members, was coordinate by Senior Officer Ms. Renu Prajapati of CSD comprising Ms. Juni K C, Ms. Rachana Shrestha,  Mr  Gyaneshwar Prasad Sonar, Mr. Ram Krishna Pandey,  Mr. Guru Prasad Pokharelm, Mr. Sanjay Kumar Mahatom, Mr. Rishi Ram Timilsina, Mr. Nilmani Dallakoti, Ms. Sirjana Chaudhary, Ms. Kalawati Kumari Saud, Ms. Sumitra Khadka, and  Ms. Kalawati Kumari Saud.

The third visit team of the 12 members led by Communication and Media Officer of CSD Mr. Chandra Kanta Pandit compromised Mr.  Laksman Shah Kalwar, Mr. awadh Narayan Chaudhary, Mr. Hari Prasad Dumrakoti, Mr. Dhiraj Kumar yadav, Mr. Tilak Saud, Mr. Rajen Gautam, Ms. Khaga Kumari Bhandari, Ms. Laxmi Subedi Tiwari, Ms. Madhava Regmi, Ms. Lila Dhahal Bhandari and Ms. Sima Kumari Yadav.

In post visit review held in CSD, participants shared their experience, they were impressed and overwhelmed by the substantial progress of MFIs in Banglaesh. The exposure visit was taken very positively and express their view to replicate the positive learnings in their organization. Mr. Gyanendra Kumar Singh said, “IDF is extensively involved in credit plus activities like health and education program. The Buro Bangladesh uses tablets in centre meetings to collect savings and disburse loan so that staff members may have extra time for other activities like interaction with the clients.” Ms. Sarita Bhandari said “Grameen bank, IDF and Buro Bangladesh have carried out health insurance, project risk insurance and livestock insurance efficiently.”

Similarly, Mr. Guru Prasad Pokhrel said, “An interesting thing there is the Area Manager supervises every process of microfinance very well from PGT to loan disbursement, impact on clients and members utilize loan only in productive sector. Another participant Ms. Rachana Shresha said, “The process of microfinance here and there is similar but the MFIs in Bangladesh are equipped with well-trained staffs. The staffs are well disciplined, systematic in work, punctual and loyal to their organizations and have maintained the fundamentals of microfinance. The Grameen Bank.”

Mr. Hari Prasad Dumrakoti said, “The projects designed by Bangladesh MFIs are based on the ground reality of the poor and marginalized communities which are sustainable and the ratio of the loan utilization is outstanding.”  Ms. Kahga Kumari Bhandari said “The MFIs in Bangladesh has focused to gain maximum result on the life of the members from minimum investments. They know the value of money and have ways of right investing.”

 

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