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we came to microfinance by looking first at integrated rural development, looking at people for their health, education, employment [and] savings. We actually started a savings program before we started giving credit.,,today We have eight million women meeting together every week in 300,000 Village Organizations. They know how to invest money, pay it back and save for the future. They know how to work together. Because of their work with us, they now know how to interact with formal institutions. So that forms the base for addressing the other constraints that they [face], and it also provides the scale you need to develop [viable] programs.
Redesigning value chains to POP!
In BRAC, we saw that many women were stuck in low-return activities. We saw that many were involved in poultry but were not making much money because of diseases, so we trained a person in each Village Organization to do vaccinations, treat basic diseases, and train in proper feed and hygiene. These people get paid for the services they provide to the women who raise chickens. Between the growers, advisers and sellers, they have created almost two million poultry jobs.
We did something similar with basic health care. We trained a person from each Village Organization … to provide basic health information and advice. They each cover 300 households and sell nonprescription medication, bring pregnant mothers in for check-ups and help mothers bring their children in for immunization. We have 80,000 volunteers covering 64 districts and a population of 92 million.
We’ve added other things, too. Economic development for adolescents, training in legal rights, programs for commercial sex workers, primary schools that have trained four million students, and programs aimed at those too poor to make good use of our financial services.
HOW CAN SOMEONE BE TOO POOR FOR MICROFINANCE?
Our Research Division looked at those who dropped out of our program and found that most of them were among the poorest. This group tended to borrow far smaller amounts, do so less frequently and have more problems with repayments. We worked with donors to develop a program that targeted the ultra-poor.
It starts with a ration card for food, plus training in business skills and money management. Over time, we provide them with a small loan and then seek to graduate them to our microfinance program. So far, about three quarters of them have graduated. CGAP did a study on this program and found that the average subsidy per woman was US$135. As more and more of these women graduate into the microfinance program, we hope to recoup these subsidies.
emergence of brac bank
WHAT IS BRAC DOING WITH SMALL AND MEDIUM BUSINESSES?
You need to create jobs for poor people [in addition to making] them social entrepreneurs. [For this reason], I asked a group of donors [for] money to start a small and medium enterprise lending program, and this has been very successful in creating new jobs for people. We set up a bank in
and it is creating
jobs on a fairly large scale, $1.2 billion now for small enterprises. Bangladesh
emergence of bkash
ARE YOU ABLE TO
USE TECHNOLOGY IN A WAY THAT LOWERS YOUR COSTS AND HELPS YOU GET OUT TO MORE
This is my hope. In the next three to five years in
, almost everybody,
including our poorest clients, will have access to a cell phone. BRAC has
already got a license from the Central Bank to set up a mobile cash management
system. In other words, all these 30 million Bangladeshi microfinance borrowers
will have access to mobile payments, and then we will be able to cut down the
costs of delivering financial services to the poorest people in the remotest
HIS WILL CREATE A PUSH TO MORE INDIVIDUAL LENDING, OR WILL THE GROUP PROGRAMS CONTINUE?
The group programs will still continue, but face-to-face time with people will diminish a bit and we will have to find another way of meeting them. Right now, 8.2 million people in
meet BRAC staff
every week. That is too costly. I would rather meet these 8.2 million people
once a month and cut down [their] travel. We can collect their money and stay
connected to them through cell phones. They will be able to transact business
among themselves through their cell phones. I think tremendous efficiency comes
out of this, on their side as well as our side. Bangladesh
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