BRAC home page 1
Economist Asia youth reporting webs 2 3 4
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 Bangladesh and it is creating
jobs on a fairly large scale, $1.2 billion now for small enterprises.
emergence of bkash
ARE YOU ABLE TO USE TECHNOLOGY IN A WAY THAT LOWERS YOUR COSTS AND HELPS YOU GET OUT TO MORE
RURAL AREAS?
This
is my hope. In the next three to five years in Bangladesh , 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
areas.
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 Bangladesh 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.