Executive Summary

 
This report explores the state of No-Government organization particularly ASA & Buro Bangladesh who play utmost significance for women empowerment through economic development reducing poverty. NGO sector enjoys some comparative advantages over public sector, which demonstrate their capacity to reach the poor more efficiently than public agencies. The micro credit program of NGOs is an important then for economic development and women empowerment of grass rots level women both in rural and urban areas.
 
This report is titled “Assessment of Women Empowerment Project of Local NGOS’’: I tried to measure Women Empowerment through six dimension such as mobility, economic security, decision making power, purchasing power, family violence and awareness of personal, social and legal activities. In the first Chapter, I discussed introduction and other formalities to make this report a worthy one. Then in the second chapter, I focused on methodology of the study. In this chapter, methods of collecting data, analytical tools and software are used. However ever, the chapter three focuses on History and concept of micro credit, women empowerment and poverty. Then in chapter four I focused  on organizational profiles. Whereas chapter five focuses on analysis and findings. Under this chapter I focused on six dimensions, which were used as indicators of women empowerment and findings. But not the least chapter six focuses on conclusion and recommendation.
 
The findings of the report can be  summarized by putting that NGOs particularly ASA and Buro are trying utmost to establish women empowerment reducing poverty through micro credit program.
 

Background of the study

Women empowerment is considered one of the prominent problem in the international and local several seminars, symposium of the present world. Different NGOs and institutions have taken several strategies to remove of the poverty of women and to establish their power. But aftermath killing women, raped and throwing acids and torture are growing day by day. Considering several factors of women development it is said that their condition is falling more than rising. So, first of we have mark the barriers or obstacles of women empowerment and then apply rule and regulations and suitable policies to widen the path of women empowerment.
 
There is a big issue that merits attention.The traditional rights-based approaches or customs that means paternal society plays responsibility and obligation on the state with a little space for women.
 
Today anyway different NGOs are doing some thing for them, something even that can at least change their previous conditions to the path of standard decent life. But nothing can be done overnight. NGOs particularly micro credit organizations are providing security less loans to women to rescue them from poverty through creating opportunity of employment.
 
Poverty wears multitude of faces and has numerous dimensions. Lack of entitlement, lack of basic social exclusion and deprivation etc are the major causes of power and poverty. While poverty encompasses deprivation of basic goods and services, it also includes differences in other vital elements of human rights- such as arrest and recreation and protection from violence and conflict the expand peoples choices and enable to fill their potential.
 
Active participation of both men and women is necessary for over all development of a country. About half of the people of our country live under poverty. Half of the people of our country are suffering from malnutrition and 55% people are deprived from proper medication. Two- third of the old are illiterate. These information are mentioned in a UNDP report. According to recent data of economic survey of Bangladesh GDP is $520 per capita. After all these are socioeconomic condition of Bangladesh.
 
But if we consider the condition of women, we will be able to see that the condition of women is lesser than men regarding every sector. According to the survey report of UN of Bangladesh the status of women in the society is not satisfactory. From different points of views such a s education, assets, employment, empowerment and other facilities it is clear to us that the large portion of women is late behind men. Home activities of women are not considered or evaluated. Ever women are affected by gender discrimination in job field. Women labors get lesser wages than men labors. Besides those women torturing is a great problem in our country. In our paternal society women are deprived from ownership and controlling of assets. Even they can not take their own decisions alone and they have to depend upon the male person for their financial support.
 
Bangladesh is the member of L.D.C and women are the poorest portion of this. That’s why women have in important role regarding poverty reduction. As so late it has been observed that many NGOS and welfare organization have taken several program to remove poverty of women ASA, BRAC, Grameen , Buro Bangladesh  and others are playing vital role creating employment opportunity of women through micro credit.
 
According to the ‘Task force ‘report (1991), NGOs are working to reduce poverty through two ways such as building organization and financial activities.
According to C.D. F. 1999, Form 70% to 100% credit receivers are women of most of the NGOs or micro credit organization.
 
They provide loans particularly to women with a view to encouraging them to increase their income and controlling power over family through devoting in several productive activities. Actually they are trying to establish women empowerment.
If Bangladesh wants to get relief from its present situation, it will not be possible without participation of women which is the better half of its body. So m we have to consider effort of women empowerment as a salient matter through removing neglected view about women. It is proved through several researches that micro credit activities have widened the way of women empowerment.
 
As of late, micro credit activities are considered a s an prominent discussing matter in order to remove poverty and establish women empowerment. Many of us think that the participation of women in micro-credit activities is a revolutionary change in prospect of women empowerment. Micro credit provider organizations also consider this concept as a salient matter. This micro credit system is establishing women empowerment through creating employment opportunity by providing security less loans to the poor women. Through this  research I have tried utmost to show, through several variables which are social and economical, whether micro credit  has established women empowerment by developing their economic condition and position or not.
 

Statement of the Problem

 
This paper has been titled as ‘‘Assessment of women empowerment project of local NGOs such as ASA and Buro Bangladesh. This report mainly synthesizes the women empowerment through micro credit.
 

Objective & scope of the study

 
General view of researches is to find out new information about any subject. As a student of Management department, I want to say that in every sector, their is a manager who plays important roles that means who manages everything, according his target or his organization target. To maintain peace of our society, managers or leade3rs of our society should maintain manage social balance that means to confirm or establish equal power of men and women in the society. Now a days several NGOs are playing this role that means they are providing micro-credit to women specially the poor women to establish their power and right in society. Micro-credit and women empowerment is an important issue of present world. The objective of my study is to assess the effect of micro credit regarding women empowerment. The main objectives of my studies are mentioned below –
1.      Women have developed their economical condition taking micro-credit or can do.
2.      They can participate in decision making of family aftermath of taking loan or can not do.
3.      They have changed their profession by taking micro –credit or cannot.
4.      Have their social status developed or not?
5.      Have they increased their participation in political area and legal awareness?
6.      Has, after all, micro –credit played vital role regarding women empowerment or not.
Scope
Most of the micro finance institutions are non government organization in Bangladesh. There are so many institutions operate their micro finance program all over the Bangladesh as rural project and urban project.
 
I worked with the borrowers of ASA, Buro Bangladesh both in rural and urban project at Lalbag and Konabari, Joydevpur, Gazipur. I took interview of 30 borrowers are engaged with different occupations.
 
I also conducted my study with various reports provided by micro credit institutions. I have done my interpretation based on the questionnaire report as well as the organizations report. I also collected information from various website.

Limitations of the study

 
‘Let observation with extreme view
Survey mankind from china to peru’’
but being a student having various duties I have faced many which , for example, can be pointed as follows-
1. Limited time
2. Limited population
3. Limited scope for enhancing work in broader context
4. Lack of financial support
5. Limited arrears and limited branches.
6. Lack of necessary information about their investment
7. Lack of co-operation of them because of their ignorance or lack of education.
 
Nevertheless the aforementioned limitation and the limitations that are not described I had tried heat and soul to do a good research in all possible manners.
 

Variables Covered

Considering the objective of the research I have collected data on the basis of six dimensions. Each dimension also includes more than one elements. Six dimensions are

1. Mobility
2. Finance security
3. purchasing power
4. Decision making power
5. Family torture
6. personal and social awareness

 
Total Mark                  30
Total Case study         30
 
Positive Sign

1. Mathematical score     0-10 = Lower level
2. Mathematical score     11-20= Mid level
3. Mathematical score     21-30= Top level

 
Negative Sign
1. Mathematical score       (0-10) = Lower level
2. Mathematical score       (11-20)= Mid level
3. Mathematical score       (21-30)= Top level
 
Number of organization two ASA and Buro Bangladesh.
 

Sampling Design

As a sample 30 micro credit borrowers was taken according to the random sampling.
 

Methods of Collecting Data

Every research work requires its methodology without which any research will not be scientific and successful. Methodology is a system of explicit rules and procedures upon which research is based and against which claims for knowledge are evaluated. As methodology is generally concerned with data generation data presentation, data analysis following rules and methods are followed to ease the data collection procedure.

Study Area

The area of my study has been in composed the operation area of micro – credit of ASA and Buro Bangladesh respectively Lalbagh branch of ASA and konabari, Joydevpur, Gazipur branch of Buro Bangladesh.
 

Target Group

To gather the required information I have contacted with head office and branch manger and loan officer and taken interviews of their clients particularly women who borrowed money from them. And I have taken into account 30 members of only these two organizations randomly as sample for collection data.
 

Source of Information

Information has been collected from both primary and secondary source.
 
Primary Sources:
The primary sources of information include interviews and conversations with micro-credit borrowers and branch managers and loan officers of these organizations.
 
Secondary Sources:
Secondary sources of information are as follows
Internal source
–          Organizations annual report
–          Project appraisal report.
External Sources
–          Different books and journals.
–          News papers and magazines
–          Internet.
 

Analytical Tools used

In this research paper table, chart & graphs, statistical tool such as mean & ratio analysis are used as analytical tools.
 

Software used

Excel software which is common to us is used in this study to get actual result.
 

History & concept of micro credit

Microcredit has come a long way. Professor Yunus, Managing Director of Grameen Bank, promoted it in 1974 in Jobra, a village in Chittagong of Bangladesh, and it has spread all over the world.
 
“The word “micro credit” did not exist before the seventies. Now it has become a buzzword among the development practitioner’s. In the process, the word has been imputed to mean everything to everybody. No one now gets shocked if somebody. uses the term “micro credit” to mean agricultural credit, or rural credit, or cooperative credit, or consumer credit, credit from the savings and loan associations, or from credit unions, or’ from money lenders. When someone claims micro credit has a thousand year history, or a hundred year history, nobody finds it as an exciting piece of historical information.”
 
Microfinance refers to loans, savings, insurance, transfer services and other financial products targeted at low-income clients.
 
Micro credit is a small amount of money loaned to a client by a bank or other institution. Micro credit can be offered, often without collateral, to an individual or through group lending.

• Group lending, also known as solidarity lending, is a mechanism that allows a number of individuals to provide collateral or guarantee a loan through a group repayment pledge. The incentive to repay is based on peer pressure; if one person in the group defaults, the other group members makes up the payment amount.
• Individual lending, in contrast, focuses on one client and does not require other people

 
Who are tile clients of microfinance?
The clients of microfinance are generally Poor and low-income people. They may be female heads of households, pensioners, artisans or small farmers/The client group for a given financial organization depends on the organization’s mission and goals.
 
How do financial services help poor and low-income people?
Anyone who has access to savings, credit, insurance and other financial services is more resilient and better able to deal with everyday demands. Microfinance helps poor and low-income clients deal with their basic needs. For example, with access to micro insurance, poor people can cope with sudden expenses associated with serious illness or loss of assets. Merely having access to formal savings accounts has also proved to be an incentive to save. Clients who join and stay in microfinance programs have better economic conditions than non-clients do.
 
What is a microfinance institution?
A microfinance institution (MFI) is an organization that provides financial services targeted to the poor. While every MFI is different, all share the common characteristic of providing financial services to a clientele poorer and more vulnerable than traditional bank clients.
 
What is an inclusive financial sector?
An inclusive financial sector allows poor and I -income people to access credit, insurance, remittances and savings products. In m y countries, the financial sectors do not provide these services to the lower income people. An inclusive financial sector will support the full participation of the lower income levels of the population.
 
If microfinance is about serving the poor, why does the provision of financial services need to be profitable?
Microfinance institutions need to be profitable in order to cover the costs of reaching out and meeting the demand of undeserved segments of the population over a sustained period of time. Additionally, after a series of very small loans, a micro entrepreneur often wants to expand her business; a microfinance institution must keep up with the demand for larger loan amounts so businesses can grow into small enterprises.
 
How can poor people afford such high interest rates?
Microcredit interest rates are set to provide viable, long-term financial services on a large scale, while subsidized. Interest rates generally benefit only a small number of borrowers for a short period. Studies conducted in India, Kenya and the Philippines found that the average annual return on investments by micro businesses ranged from ‘117 to 847 per cent. These high returns are commonplace among micro entrepreneurs, and while the interest rates seem high, they usually represent only a small portion of “microentrepreneurs’ total returns. Interest rates charged by informal moneylenders are overwhelmingly higher than those of MFIs are.
 
Do poor people save?
Poor people save all the time, although mostly in informal ways. They invest in assets such as jewelry, cosmetic animals, building materials and things that can be easily exchanged for cash. Access to secure, formal savings services provides a cushion when families need more money for seasonal expenses and in tough times. Secure savings accounts allow people to guard against unexpected expenses associated with illnesses, build assets, prepare for old age or pay for school fees, marriages and births.
 
Why is microfinance so important/or women?
In a world where most poor people are women, studies have shown that access to financial services has improved the status of women within the family’ and the community. Women have become more assertive and confident. Furthermore, as a result of microfinance, women own assets, including land and housing, play a stronger role in decision-making, and take on leadership roles in their communities.
 
When is micro credit NOT appropriate?
Microcredit may be inappropriate here conditions pose severe challenges to loan repayment. For example, populations that are geographically dispersed or have a high Incidence of disease may not be suitable microfinance clients. In these cases, grants, Infrastructure improvements or education and training programmers are more effective. For micro credit to be appropriate, the clients must have the capacity to repay the loan under the terms by which it is provided.
 
NGO as the provider of microfinance
In Bangladesh micro credit programs are basically performed by Non-Government Organizations (NGO). NGO provides one of the more creative dimensions in development. This creativity is due to the relative small-scale size of NGO’s, which makes them more efficient and effective in dealing with their beneficiaries. Bureaucracy is less and the gap between planning and implementation is minimal (ANGQC, 1984).
 
The United Nations ECOSOC resolution 288(x) of 27 February 1950 also states: “Any
International organization, which is not established by inter-governmental agreement, shall be considered an international non-government organization.” This is the current UN definition in connection with the consultative status of the NGO’s with the ECOSOC and the UN specialized agencies. By the loose popular extension, the term NGO, whether referring to the regional or national level may be defined to mean any organization not established by government. However NGO can be defined in various ways­
1. NGO is a mechanism of market economy.
2. NGO is a mechanism of structural adjustment program.
3. NGO is a form of decentralized government.
4. NGO is a form of shared government.
 
In Bangladesh, the NGO has been defined as an association of persons formed through the personal initiatives of a few committed people dedicated to the design study, and implementation of development projects at the grass-roots level. They work outside government structure, but operate within the legal framework of the country. They are “involved in direct action-oriented projects some times combined with study and research. Their target population is primarily the rural poor.
 
Registered NGOs by the NGO related bureau:
 

 
Amount of disbursement Endorsed by NGOs from 1995 to 2000:
 

History and concept of Women empowerment

The main issue of the study is empowerment. So it is necessary to recognize the meaning of empowerment. At first the word empowerment ” was used by  a Brazilian scholar whose name is “Paulo Freire. He used this word in respect of equal right of women. Empowerment is an important element of development. This is a process through which people can establish controlling and become aware about barriers and problems.
 
According to Weber “term power will be used to refer to every possibility within a social relationship  of imposing one’s own will, even against opposition, without regard to the basis for this possibility.
 
Power is the fundamental concept in social stratification, of which class, status and party are there separate dimensions, as Weber described. Power is the relational or active aspect of social inequality. Inequality is a descriptive concept: translated into action, inequality becomes the distribution of Power.
 
Empowerment is a such process by which a person can acquire tools and techniques to control himself/herself.
 
According to Atiur Rahman (1986) the indicators of empowerment are as follows.

• Decision making power,
• Participating in financial transactions of family,
• Ability of earning assets

 
S.M Khanum who added the following issues which are
ability of taking shelter under laws,
Ability of taking decision of fertility.
Self confidence and self repentance which is an important element of empowerment.
 
Martin Chen, Scholar and famous researcher, preserved four dimension of empowerment which are mentioned below.

• Assets
• Power
• Relation
• Self -realization and perception.

 
Another researcher Naila Kabeer (1999) has defined, “Empowerment indicates the ability of fulfilling need struggles to establish right, affects in decision making process, and decorates the life according to her will.
Schuler & Hashemi (1996) defined women empowerment thorough  8 indicators  which are mentioned below.

• Mobility
• Ability to make small purchase
• Ability to make large perchance
• Economic security
•  Involvement in major decision
• Relative freedom from domination and violence with in her family.
• Political and legal awareness
• Participation in public sector and political campaigning

 
If my women posses al of these indicators or any five of them it will be consider that she is empowered.
 
Women empowerment is a process and at the same time it is the result of that process. It means to make aware is the process of being empowered and it will be result when women are empowered.
 
Empowerment is different from self reliance because it means to acquire the ability of personal and social decision making and source of power. Empowerment, thus, provides new directions of basic concept of interrelation between power and development. Generally empowerment refers women empowerment.
 
Therefore, women empowerment refers such process through which a woman will be aware of her position or relative social status and be conscious against discrimination of social, political and economic position.
 
Women empowerment refers a process that removes all inequalities and discriminations and establishes equal right of women in respect of social status.
 

Poverty:

As the concepts of poverty vary, so do definitions. The most basic definition focuses on the capacity to survive-having the land and resources to grow enough food for the family or sufficient income to buy food and clothes. The only needs that are included are biological ones of food, water, clothing and shelther. No allowances are made for social or cultural expectations.
 
According to Pete Alcock, “Poverty is not just a state of affairs, it is an unacceptable state of affairs.
 
Definitions based on this absolute concept of poverty allow for easier measurement over time but depend on the specification of an absolute poverty line based on survival criteria such as a:

• specific minimum daily calorific intake (Lipton, 1983)
• the proportion income spent on food (Rao, 11982)
• the income level required to purchase a minimum basket of consumption of goods.

The basic definition of poverty is built on the subsistence model but towards a more relative approach. According to ILO (1976) basic needs are:
“The minimum standard of living which a society should set for the poorest groups of its people.
 
All relative definitions of poverty is based upon comparison, often with some notion of prevailing living standards in the community being researched and then given a financial value. George and Howards (1991) as poor, `those whose incomes or resources are not sufficient to provide them with the goods and services that will enable them to live a life tolerable according to working class lifestyles;
 
B. Seebohm Rowntree in his prominent book ‘Poverty; A study of Town life (1902) 26 had measured poverty in absolute form. He used CBN (Cost of Basic Needs Method). He found two types of poverty in York city: primary poverty (faling to provide merely physical demands) and secondary poverty (failing to provide other demands except physical demands). For primary poverty he took the following indicators:

• Food
• House rent, and
• Household sundries (cloth, light, etc.)

 
Peter Townsend in his renowned book poverty in the United Kingdom: A Survey of Household Resources and Standards of Living (1979) defined poverty in the following way:
 
“ Individuals, families and groups in the population can be said to in poverty when they lack resources to obtain the type of diet, participate in the activities and have the living conditions and amenities which are customary or at least widely encouraged or approved, in the societies to which they belong’’.
 
Amartya Sen in his eminent book `Poverty and Famines’ propounded poverty in terms of entitlement and deprivation. He divided entitlement in the following ways:

• Physical capital;
• Human capital;
• Environmental capital;
• Social capital;
• Cultural capital;

 
According to him one, who has no capability to exchange the resources, is poor.
The Sen index combines

• the headcount
• the poverty gap, and
• the distribution of income among the poor.

Activities of NGO

The role of Microfinance institutions as NGOs in our socio-economic development is quite significant. They are as follows:

• Birth Control: A large number of population & high birth rate are the major problems in our country. Government has taken many steps to control this population explosion through family planning. They are operating their activities mainly in rural areas. The role of NGOs in this program is well known to all.
• Reduction of poverty: By creating jobs for our educated, uneducated, and undereducated people NGOs have brought a new dimension of self­ employment. It will bring a long term Impact on our macro economy. By two means they are trying to reduce Unemployment.

 
1. First is creating jobs. A large number of people are working in different NGOs as employee. New NGOs are creating new job opportunities. More then 2 lakhs female are working in NGOs.
2. Second one is self-employment. They have created these opportunities through macro credit & different training program. People who had no land or capital, NGOs provide capital and training for them. Through this program they have brought a dynamic economic system for rural people.
 

• Education program: Bangladesh government has already taken the program “Education for all”. Besides the government, many NGOs are operating their activities in this education sector. They are managing more than 1 lakhs school where 40 lakhs children are taking education. They are also operating satellite schools.
• Forestation: Non government volunteer organizations are taking part in tree plantation. By this means they can maintain the balance of the environment.
• Health: NGO’s are taking part in different health programs. They are trying to reach these facilities to the rural people. So they are contributing in human resource development.
• Drinking Water: They are setting many tube-wells & latrines with the help of govt. They have taken both combined and parallel program for this project to unsure pure drinking water.
• Cyclone Center: NGOs are establishing cyclone center to provide safety shelter. For cyclone-affected people. They have established 270-cyclone center for the people of coastal area. For a more dynamic and sustainable socio-economic development NGOs should co-operate with government.

Bangladesh: Pioneer of Micro Credit

 
The success of micro credit in Bangladesh introduces a great movement in the whole world whose motive is to coverage all the poor people in giving with loan, savings and others financial support. The micro credit system is worldly popular due to it’s directly poverty alleviation policy. It attracts the whole world in regard to its policy. Now a Day’s poverty alleviation is the most challenging agenda and to alleviate poverty the micro credit system is the prime acknowledge instrument. It is highly expected that by the fiscal year 2005, 100 million of poor family will come up in micro credit system. And for this reason out of 1100 million of poor people will be directly benefited. The motive of UN millennium progress project is to lessen the poverty ratio into half by 2015 and for that purposes the UN declare 2005 as “UN International Year of Micro credit”.
 
Regarding this economist Adam smith said that, when you’ve a small amount of money then it makes the way to gain a lot of money. Micro credit is a process through which the authority provides the small amount of money to the poor people. The major objectives of micro credit system are to help the poor people increasing their income and standard of living by using different economic opportunity.
Bangladesh is known as a poorer country in the world though it has all possible traits of progress. It has happened just for its socio-economic condition. The main challenge of Bangladesh is to lessen all the poverty-oriented activities from the country and make Bangladesh as a progressive country. In Bangladesh the micro credit system is introduced due to the failure of different government and non-government institutions in serving the poor people actively and properly.
 
Prof. Dr.Md younus at first introduces this loan giving system to the poor people as an experimental motive. In 1976 He extended this program as “Grameen Bank Prokalpo” under the patronization of government. After that this prokalpo emerged into a “Grameen Bank” under his supervision. In Bangladesh the micro credit system extended as a geometrical progression around the 1990s.
 
In 1990s the PKSF (Polly Karma Shohayak Foundation) was a wonderful institutional invention which emerged as a organizer of various micro credit giving institute in Bangladesh. PKSF was a lesser interest-oriented institute and it inspires the poor people to motivate themselves. As a result during the last 15 years the number of loan taker is increased from 50000 to 90000 in nongovernmental institution like PKSF. At present there are a lot of loan giving institution in Bangladesh which is one the largest and well to do in the world. Near about 1 lakhs people works in such type of loan giving institute. During the last years the number of loan taker in BRAC was 40 lakhs. At the same time the number of loan taker in ASA was 30 lakhs. The number  of loan taker was 40 lakhs in Grameen Bank. Besides this, the BRDB. Polly Daridra Bimochan Foundation, youth Development Broad, social welfare ministry and other government bank covered 32 lakhs of people in micro credit system.
 
In Bangladesh the mentioning institution have a lot of dominance in giving micro credit. At present the top most 10 institutes have occupied the 80% of micro credit market. Here the number of micro credit taker is 15 million plus.
 
As a networking institute of micro credit system CDF (Credit development forum) express the micro credit concerned information. According to the CDF’s statistical report 45%-30% micro credit taker are directly involved in small petty business, transportation and agricultural sector.
 
In I 980s at the time of preliminary extension of micro credit the poultry and fishing sector was the most prevalent sector to the poor people. But at present the petty business and transportation oriented business is considered as a major working field to the poor people. During the last few years there was a massive change in Bangladesh in its internal national incomes structure. During this time the contribution of agriculture in internal national income decreases from 50% to 24% and conversely in service sector the national revenue increases from 34% to 50%. During the last few years the micro credit system make the possible way for success of the poor people in their business in village and town and helps them in searching of employment in different sector.
 
There is a saying that, in Bangladesh there is less than 10% people could accept the micro credit privileges. To ensure the better life of poor people the PKSF associated
institutions reach the micro credit service to the poor people by the help of government. To fulfill this, the government provides 10 million of funds to the PKSF. Moreover, BRAC also carryon their service of micro credit program to the poor people. The Grameen Bank introduced a micro credit program to alleviate the beggar from the country and make them well established without any interest. All these efforts will help poor people to change their living standard and financially solid man. All present some of the commercial bank and other loan giving institutes expanded their helping hand to the poor people changes and they also allocate micro credit to them to make them well established.
 
The micro credit system has a lot of contribution to increase of poor people’s income, earning wealth and wage. The micro credit has also some social advantage. This micro credit system helps poor women to grow their confidence and it involves a lot of women in employment, and moreover it helps people to be well established. Through, micro credit system the poor families are] able to give their daughter get marry, to send their children to the school, and also it helps the poor women in taking their decision and make. them strong and active. Regarding this Grameen Bank is clearly ahead. The micro credit helps the poor people to come up from the poverty level. Every year the poor people came out from the poverty cycle by receiving micro credit from BRAC, ASA and Grameen Bank. Bank.
 

Organizational Overview

Buro Bangladesh
 
Institution
Buro-a national ‘not-for-profit’ non-government microfinance institution (NGO-MFI) was established in 1990 with an aim to work for the poor and rural people to reduce poverty, on sustainable basis. Buro is a specialized microfinance institution and provides high quality flexible financial services to low-income people, particularly the women, who are regarded as its prime customers. They are the conduit for channeling resources into the households. The organization is responsive to diverse financial needs of the customers. To meet their ever-growing financial needs, it has launched nine loan products, three savings products and one insurance scheme. In addition, it provides stepped loans to graduate clients called “enterprise loan”. Buro has also a disaster mitigation program for the affected people in the microfinance system.
Buro was one of the first MFIs in the country to articulate a clear, unequivocal commitment to achieve financial sustainability, and establish itself as an independent institution. Since then it has been achieving milestones of success and eventually has attained financial sustainability.
Apart from these, Buro provides modicum non-financial services that include technical assistance to MFIs, quality seed production and rural piped water supply. Buro keeps on investing a considerable amount of money in developing its human resources. Staff and customers both are trained to enhance their knowledge based capacity and skills.
 
Customers
There are three categories of customers who are
selected based on specific criteria.

• Very Poor/Extreme Poor
• owning less than 10 decimals of land
• annual income equal to or less than BDT 6,000 and having assets less than BDT 12,000.
• age limit between 18-60 years

 
Moderate Poor

• owning less than 0.50 acres of land
• annual income equal to or less than BDT 18,000 and having assets less than BDT 100,000
• age limit between 18-60 years
• Vulnerable Non Poor
• owning more than 0.50 acres of land
• annual income in the range of BDT 18,000­ BDT 60,000 and having assets in the range of BDT 100,000- BDT 300,000
• age limit between 18-60 years

 
Legal Status
Buro is registered with:

• The Department of Social Welfare, No. TA. 0489 dated 9th April 1991.
• NGO Affairs Bureau No. 610 dated 19^th March 1992.

 
Linkages
Buro has established linkages with:

• The Federation of NGOs in Bangladesh (FNB) . Credit and Development Forum (CDF)
• Network for Information, Response and Preparedness Activities on Disaster (NIRAPAD)
• International Association of Investors in the Social Economy (INAISE)
• International Network of Alternative Financial Institutions (INAFI) .
• Campaign for Popular Education (CAMPE) .
• Self-help Promotion Network Forum

 
Contribution to Poverty Reduction
Buro’s financial service is helping the customers in many ways. The money that they save with the organization are used for productive purposes when it turns into a lump sum amount. On the other hand, most customers are using loans for small trade and business activities as working capital. This loan is helping the growth of the businesses and their income. Some people are also getting employment opportunities.
 
Stakeholder Information
Buro regularly furnishes information to a number of important agencies both national and international. These are:

• Bangladesh Economic Review, Ministry of Finance and Planning
• Credit and Development Forum (CDF) for publication of Microfinance Statistics
• Microfinance Research and Reference Unit (MRRU), Bangladesh Bank
• Microfinance Information exchange (MIX)
• National and international organizations for Annual Report distribution

 
Advisory Support
Mr. Graham A.N. Wright has been Buro’s international honorary advisor for a long time. He is providing valuable inputs in the development of the organization and helping the management in quality decision-making. Mr. Wright is now working as Program Director of Microsave.
 
Future Direction
Bum was originally conceived as a demonstration model, with the intention of achieving sustainability providing a range of high quality financial services to 100,000 customers. This was achieved but after some time the organization decided that it could also play an important role in rolling out its services still further. As a result, in the last few years, Buro has initiated an expansion program. But there are some critical areas where Buro is still trailing primarily due to resource constraints.
However, Buro remains committed to move ahead with its expansion programme keeping in mind the national and institutional priorities.
 
Strengthening Micro-enterprise (ME) Intervention
Buro is currently financing ME customers in a limited way. It believes that ME is an area where more investment should be forthcoming as this has good potential for employment and income generation. The organization will prioritise creating employment opportunities in the rural areas in non-conventional businesses. It plans to support 15,000 customers in 2007.
Working with hardcore Poor
Buro has decided to work in the Monga (famine) hit region of Northwest of Bangladesh and hardcore poor in other parts of the country in a massive way. Meanwhile, it has developed experience of working with this segment. It plans to address the financial needs of 6,000 households in 2007.
 
Plan for Full Automation
Buro has 173 branches and 42 area offices. It wants to bring about full automation in microfinance operations as early as possible. But time and the investing in automation are two important factors hindering the plan. Long-term, automation will result in reduction of costs and enhance transparency. The organization has developed a software on MIS and FIS. Field-testing. on FIS has already been accomplished. The outcome is satisfactory. The organization plans to install the software initially in 73 branches in 2007. The process will be carried forward gradually.
 
Vision
A happy, prosperous and pluralistic democratic society that meets the basic needs of the people in Bangladesh.
 
Mission
An independent, sustainable, cost-effective micro finance institution that provides diverse, appropriate and market responsive, quality financial and business development services at competitive prices along with other social development programs to very poor, poor and vulnerable non-poor customers.
 
Strategic Priorities

• Promotes product diversification.
• Pursues commercialization principle.
• Reaching the hardcore poor; small and micro enterprises; and small and marginal farmers.

 
Market Positioning

• Identify the major attributes that thecustomers value.
• Assess importance of different attributes in terms of quality, cost, price and delivery of service.
• Assess Buro and its competitors’ performance for positioning in the market.

 
Constitutional Aspects
Executive Committee and General Body
Buro strictly follows the ‘Code of Corporate Governance for Bangladesh’ prepared by the taskforce on corporate governance to develop corporate culture step by step in the organization. A seven-member Executive Committee (President, General Secretary, Finance Secretary, and four members) and a four-member implementation board of directors (Executive Director, Finance Director, Program Director and microfinance immersion and capacity building deputy director) are vested with the governance and the management of Buro. The Executive Director is not a member of the Executive Committee but works asa member secretary. The Executive Committee is elected bi-annually from a body of 15 general members, who come from different professions viz. business, banking, law, academics, journalism, and social development.
Executive Committee Functioning Process
 
The Executive Committee (EC) performs four core responsibilities that include fiduciary, strategic, supervisory and management development. The Executive Committee performs the responsibility to safeguard the interests of all the institutions’ stakeholders. The Executive Committee serves as a check and balance to provide confidence to its stakeholders (lenders, donors, savers and staff) that the management will operate in the best interests of the institution. It participates in the organization’s long-term strategy by critically considering the principal tasks to which the organization is exposed and approving the plans presented by the management. The Executive Committee does not generate corporate strategy but instead reviews management’s business plans and its strategies and approves it. The Executive Committee has delegated authority to the management through the CEO. It supervises management in the execution of the approved strategic plan and evaluates the performance of management in the context of the goals and timeframe outlined in the plan. The Executive Committee also supervises the selection, evaluation and compensation of the senior management team.
 
Activities of EC during the Year
In 2006, six Executive Committee meetings were held. The meetings generally provided guidelines and policy directions to the management. The Implementation Board held 10 meetings. In addition, there were 77 audit settlement meetings, which were settled by the Implementation Board. The EC approved new branch opening policy during the year. To set up a branch a team consisting of senior staff is assigned. A survey is undertaken for collecting desired information. These include population in locality, geographical location, staple crops in the area, roads & communication, physical facilities and local resources, local political situation, the social and religious condition of the target people, the position of women in the locality, the particulars of MFIs working in the locality. During the year EC approved the 4th Pay Scale, 2006 for the staff of the organization and borrowing from commercial banks and non-banks. EC resolved taking licence from Microcredit Regulatory Authority (MRA) for carrying on microcredit operations.
 
Holding Annual General Meeting (AGM)
The ninth Annual General Meeting (AGM) was held on 30 June 2006. The AGM was attended by all the general members. They approved the annual report and the audit report of 2005, the budget and the program .for 2006. An extra ordinary general meeting was also held on 22 December 2006 to discuss and approve amendment of the constitution and election of a new Executive Committee. The Executive Director is not a member of the EC as per the new amendment.
 
Policy and Functional Aspects
Policy and Procedures
In order to establish good governance in the organization, Buro gives significant importance on the implementation of various rules and procedures that include (i) Rules of Business for Micro-finance and Micro-enterprise (ii) Staff Service Rules (iii) Accounting and Financial Procedures and Rules (iv) Internal Audit Manual (v) Human Resource and Administrative Manual (vi) Program Implementation Manual (vii) Gender Policy and (viii) New Branch Opening Policy.
Working Committees Seven (7) different committees are functioning with cross-functional departments to develop greater cohesion and integration towards achieving the goals of the organization. The committees are: (i) Recruitment and Promotion Committee (ii) Gender Committee (iii) Sales & Purchase Committee (iv) Land Purchase Committee (v) Disaster Management Committee (vi) Committee for Building Construction and (vii) Committee for Papers Disposal.
 
Programs Management
Buro operates through its branches established at different locations. A branch is managed by one Branch Manager, one Branch Organizer, one Accountant, and 10-12 Program Organizers (POs).
 
To develop smooth functional mechanism for program implementation, 21 area offices have been established at field level with an Area Manager for each area office. The key responsibility of the Area Manager is to monitor, supervise and facilitate 5-6 branch offices. Area Managers are supervised by Zonal Managers. One Zonal Manager supervises 4 Area Offices. The Area Manager and the Zonal Manager do not have any separate office but they sit in the offices of any Branch in a convenient location.
 
Staff Benefit Funds
The services of a staff are regulated with well – defined Service Rules of the organization.
These include: (i) provident fund, (ii) gratuity fund, (iii) health fund, (iv) housing fund, (v) staff family welfare fund, (vi) advance for motorbike and bicycle purchase, (vii) income tax payment for the staff, (viii) leave encashment, and (ix) advance salary payment on simple terms to facilitate buying life insurance policy.
The Provident Fund is managed by a separate Trustee Board comprising staff at different levels. The management of Buro manages four other financial benefits. The accounts of these financial benefits are maintained separately. The total amount of staff benefit fund as on December 3 l, 2006 stood at BDT 48.4 1 miUion, which includes BDT 28.32 million as provident fund, BDT ll.05 mi11ion as gratuity, BDT 2.19 million as health fund, BDT 5.50 million as housing fund and BDT 1.35 mi11ion as staff family welfare fund.
 
Income Tax Return Submission
Submission of income tax return is mandatory under government rules. Buro has been regularly submitting the returns to the government. It may be noted that the government has exempted the non-profit organizations dealing with microfinance from paying any income tax from the surplus earned. However, if there is any income from other than microfinance, it will be subject to the relevant rules of taxation. The income tax assessment has been duly completed for the year. During the year, Buro has paid an amount of BDT l.69 million to the national exchequer.
 
Internal Control System
To ensure transparency, efficiency and overall effectiveness, the organization pursues a rigorous internal control system. Most international standard norms and practices are also meticulously followed. These practices reflect Buro’s institutional and managerial soundness. It has, of course, taken time to develop these systems. The components of internal control system are laid down below.
 
Budget Formulation and Variance Analysis
The initial budget planning starts at the branch level. A yearly budget is split into monthly figures spelling out financial and program targets. All branch budgets are consolidated in the head office to formulate the organization’s aggregate budget. Financial monitoring is carried out monthly based on budget variance, MIS and PIS reports.
 
Fair Staff Recruitment Process
Recruitments are made through fair competition and public announcements. The criteria are well defined in the service rules. Advertisements are made in the leading newspapers in the country. Generally written and viva tests are held. For senior level recruitments assistance of external experts are taken. Executive Director approves all recruitments recommended by the committee for recruitment.
 
Procurement and other Policies
Buro maintains an enlisted group of suppliers and signs a MoU for one year with them to supply printed materials and stationary items as per general agreement. They continue to supply unless there is any unusual price hike. In case of other printing and materials, spot quotations are asked for. Besides, the organization has other committees like sales/ procurement committee, land purchase committee, papers / documents disposal committee. All committees are approved by the executive committee.
 
Per Diem and Travel Policy
The organization has well defined policy for domestic and international travel as well as food and lodging for all grades. There is also a policy for per diem continent-wise for all grades.
 
Payments/Advances
All payments are made through crossed cheques. Advances to the staff are made with prior approval of the management.
 
Monthly Program Coordination Meeting
Regular meetings are held at different levels to see if progress is being made as per plan.
Monthly coordination meeting is held at the head office. All concerned officers of the respective departments, zonal managers and area managers attend the meeting. Two meetings are held every year at the head office with all branch managers. A zonal meeting is held once a year with all staff in the zone. Also, a monthly meeting is held in a branch, which is attended by the area managers. Quarterly meeting is held at zone level with all branch managers.
 
Clients Passbook Checking
The most critical risk in an MFI lies with collection of savings and loan repayments by the program organizer (PO) or the loan officer. Savings deposited and loan repaid by a client are recorded in the client’s passbook and in the collection sheet (which is the primary record of the office). But there is always a scope of inherent risk. To ensure that the transactions have been duly recorded and that no cash remains at hand of the PO, the branch manager, the accountant and the branch organizer make 100% checking of all clients’ passbooks every quarter. Such checking is done in a Kendra! Center four times a year. In case, any flaws or anomaly is detected afterwards, the respective program organizer would be solely responsible. POs also have to ensure the existence of transparent MIS that generates reports correctly. The accuracy of the reports generated by MIS is important. It is essential that there should not be any discrepancy between the accounting information system and clients’ passbooks.
 
Effective Monitoring and Supervision
The Branch Manager performs. the program monitoring based on a yearly plan split into weeks whereby the manager visits the Kendra and verifies whether things are going as per plan. The Area Manager supervises 5 -6 branches based on a yearly plan split into weekly programs. He too visits the Kendra and the group meetings. The Zonal Manager supervises 20-25 branches and also visits Kendra based on a yearly plan split into weeks. The Program Director, Finance Director and the Executive Director also undertake some routine visits to the fields.
 
Financial Control
The fund management by Buro has been significantly strengthened by internal audit and financial control. Financial control is generally exercised at three levels: the Executive Committee (EC), the Head Office and the respective Branch. The Executive Committee monitors all financial matters quarterly through the EC meeting, the Executive Director/ Finance Director exercises financial control through internal auditors by routine visits and monthly financial statements. At branch level, the managers usually exercise the financial control on the basis of the budget and the financial projection plan. Financial transactions in the head office and branch offices are regulated with regard to following four areas: (i) field level transaction control, (ii) treasury management, (iii) budgetary control, and (iv) accurate financial reporting.
 
Internal Audit
There is an internal audit department with an Audit Officer. A total of 18 audit staff work in the internal audit department, and are based in the zonal offices. An internal auditor goes to a branch with a one-week visit plan along with a checklist to ensure the compliance of rules and regulations. The auditor examines different aspects on financial management, rules of business and accounts and administration. The auditor reports on 100% checking of loan portfolio. He also reports on 100% checking on loan and savings balancing (reconcile the balance with collection sheet) and program-wise reporting and reports on passbook verification of at least 100 passbooks of 10 kendras done by the concerned PO, etc. Besides, he reports on fund management regarding cash and bank. The audit reports are submitted to the Executive Director. These are discussed in meetings at higher level and asked for clarifications, if there is any irregularity or anomalies. Punitive and corrective measures are taken where necessary. The findings of the auditing help the management in taking right decisions for modifying the policies, systems and procedures.
 
External Audit
Buro conducts annual audit regularly every year. Reputed audit firms in the country are hired for external auditing. Audit firms are appointed by the EC for a period of one year.
Standard Practices
Buro has been following some of the internationally accepted reporting and prudential requirements – even though microfinance NGOs are not required to comply. This is being done to conform to the standard norms and practices pursued world-wide and to prepare for any future regulatory requirements in the country. These practices and the relevant indicators portray a clear picture of Buro’s financial and managerial soundness.
 
Capital Adequacy
Capital adequacy analysis is being used to measure the financial solvency of the organization and determine whether the risks that it has incurred can be adequately offset with capital and reserves to absorb potential losses. The current capital adequacy ratio is 34%.
 
Asset Management
Loans advanced to the customers make up the portfolio (about 89%) of the total assets and forms the biggest current asset. To determine the quality of loan portfolio, aging analysis is performed monthly. The year-end financial accounts of 2006 shows that the organization has achieved a first-rate portfolio indicating 97.85% of the portfolio with no payments in arrears.
With regard to fixed assets, the organization pursues clear policies in acquiring land and building to optimize the operation of its business. It also follows clear-cut policies to acquire necessary equipments and vehicles for building an effective infrastructure for the institution to meet the needs of both staff and the customers.
 
Management
Human Resource Development (HRD) is well organized in a manner that provides clear guidance and support to operations staff including recruitment and training of new personnel. Buro has formalized all key processes and the effectiveness with which it controls risk throughout the organization. The organization undertakes short-term and long-term financial projections and uses these to ensure fiscal and budgetary control.
 
Earnings
The management has been effectively using and mobilizing the available resources to ensure sustainable benefit to its customers and aiming at a modest return on the investment.
 
Liquidity Management
Based on experience, 6-10% all savings balance of all branches is deemed adequate to meet the liquidity reserve ratio. For the liquidity requirement, 40% has been earmarked for general savings, 30% for contractual savings, 10% for time deposits and 20% for operating and financial expenses.
 
Loan Loss Provisioning and Write off
Management makes provisions for loan losses every quarter in order to maintain the loan loss reserve at adequate levels for bad loans. Buro’s loan loss reserve ratio is 1.48%. The adequacy of the provision is determined by applying appropriate percentages to the outstanding balances in various aging categories. The write-offs of any loans, if necessary, are charged against reserve. Loans are written off in full after one year of the loan term.
 
Risk Management
The organization believes that dependence on continued grants for microfinance
programs may threaten the longevity of the organization. It is, therefore, pursuing a commercial principle and prefers commercial sources of funds. It manages a disaster fund to combat external risks that may occur due to natural calamity like flood.
 
Financial Ratio Analysis
Sustainability and Profitability
Buro has been operating as a sustainable and profitable organization since 1998. This means Buro has established its ability to cover all costs through internally generated revenue by efficient use of performing assets and the capital fund. During the year, the operational self-sufficiency (OSS) has decreased to 136% from 163% in 2005 while the financial self-sufficiency (FSS) has decreased to 122% from 136% in 2005. The fall has occurred due to significant increase of commercial capital.
 
Net profit of BDT 96 million has been posted in 2006 compared to BDT 112 million in 2005. The decrease of net profit was 14% over the preceding year. The fall in the net profit has affected all profitability ratios. The return on performing assets was 29% compared to 31 % in 2006. The return on equity (ROE) has stood at 18% compared to 25% in 2005.
 
The resultant fall in the sustainability and profitability has occurred due to rapid
 
microfinance program expansion in 63 branches. These involved massive cost in hiring staff, providing training, meeting branch establishment cost and organizing customer groups in the field.
 
Portfolio Quality
The loan portfolio is the greatest asset of an MFI. Its quality is characterized by low portfolio risk and high loan recovery rate. Buro has been maintaining a high quality portfolio of loans. The on-time loan recovery rate in 2006 was registered at 98.17% versus 98.07% in 2005.
 
As on December 31, 2006, 97.85% of the portfolio has no payments in arrears at all, 0.84% is in arrears by 1-25 weeks and 1.31 % by more than 26 weeks. Portfolio at risk (>60 days) was at 1.73% at the end of 2006, compared to 1.69% in 2005. Loan loss reserve ratio was worked out at 1.48% compared to 1.32% in the preceding year. The reserve contains adequate fund to absorb any potential risks or capital losses. Loan write-off was made by 0.24% compared to 0.14% in 2005. Efforts to collected bad loans continued during the year. As per policy, the loan loss reserve required has been worked out at BDT 19 million while provision has been made at BDT 23 million. The ageing of portfolio is shown in table-lO.
 
Leverage
In the financial market, capital is considered as a base for borrowing. Before an MFI can borrow commercially it is imperative that the organization is financially viable and that it will continue to be viable in the long term. Leverage refers to the borrowed fund of an MFI relative to its equity. In 2006, the debt-equity ratio has been worked out at 1: 1.65, the equity to total assets at 34% and DSCR being 1.62 times. The ratios are favorable enough to encourage the lenders and the savers to have confidence in Buro.
 
Efficiency and Productivity
Efficiency and productivity ratios provide information about the rate at which MFIs generate revenue to cover their expenses. These ratios indicate whether MFIs are maximizing the use of resources. Productivity refers to the volume of business that is generated (output) for a given resource or asset (input), while efficiency refers to the cost per unit of output.
 
The operating cost ratio has increased to 15% from 13% in 2005. The cost per unit of money lent has also increased slightly to BDT 0.06 from BDT 0.05 in 2005. The cost increase is mainly due to program expansion. The financial cost ratio increased to 6.15%, compared to 5.20% in the preceding year. The increase has been largely due to payment of more interest on the increased volume of savings and loan interest to the lenders against increased borrowing capital.
 
The customer/Program Organizer (Loan Officer) ratio has temporarily fallen to 213 from 318 in 2005. Unlike most MF-NGOs, a Program Organizer (PO) of Buro performs more than three types of finanCial transactions with a single customer. Thus this performance clearly outstripped the average performance of a typical Loan Officer in the industry. The loan outstanding per PO has fallen to BDT 1,006,335 from BDT 1,347,714 in 2005. The savings balance per PO stood at BDT 456,317 from BDT 572,599 in 2005. This decreased performance is due to microfinance program expansion that is yet to take off following enrollment of new customers, normal loan disbursement and saving mobilization.
 
Financing Mix
The overall capital has been growing steadily in the last couple of years with the infusion of borrowed funds, client savings and retained earnings. The financial resources deployed stood at BDT 1,657.38 million as opposed to BDT 1,267.41 million in 2005 showing a significant increase of 31 %. Of the total resources employed 35% is contributed by equity/own fund, 22% by borrowing and 43% by client savings. The average revolving loan fund (RLF) was used.
Asset Composition:
The asset structure shows that 89% of the total assets was held in terms of loan portfolio compared to 87% in 2005. The fixed assets amounted to 4% against 5% in the preceding year. The nature of fixed assets mostly included purchased plots of lands for office premises for head office and some branch offices. The long-term investments stood at 3%, while other current assets at 2% and the cash and bank balance at 2%. The details are shown in following table-
ASA has been working for the poor since a long time and in the mean time ASA has expanded its microfinance activities throughout the country. So it is really difficult to present a total overview of ASA in a piece of paper. In spite of all difficulties a table is made where the statistics regarding groups, borrowers, branches, areas, divisions, credit volume, loan realization, loan outstanding, savings volume etc. are available.
The coverage of ASA includes 378 thanas under 61 districts. It is working through 824 branches. It has 1,204,938 group members. The saving of group members is now Tk. 1,607,267,134 and the amount of total credit disbursement is Tk. 29,638,230,929. The percentage of loan recovery is 99.90%. It has 5,347 credit program staff. The table, which is a complete picture of ASA up to 31^st December 2000, is given below:
ASA started its activities in the year 1978 and from the very beginning the motto of the organization is to develop standard of living of poor people of the country. In 1991, its leadership decided to focus on economic empowerment agenda and chose microcredit as the core activity of the organization. Now it is proven that ASA has been operating the most cost-effective program and the recovery rate is the highest among all other organizations operating the same type of program. But this remarkable success of ASA is not achieved in a day. It has become possible because of some cost reducing and income increasing factors learned by ASA by practicing microfinance through its branch offices all over the country in the last couple of years.  Due to these factors, the members are satisfied as they can fulfil their financial need and at the same time ASA can operate a very fruitful microfinance program. The secret of this cost reducing and income increasing factors are mentioned below.
 
Cost Reducing factors:
1.     The staff members are selected within the shortest possible time and they are given a short duration on-the-job training.
2.     The branch office is furnished with minimal facilities and simple furniture for collective use.
3.     Branch expenditure is standardized. ASA has set a cost ceiling for all kinds of expenditure.
4.     Increase in the number of borrowers, portfolio per Credit Officer (CO) and a high fund revolving rate minimize total fund requirements.
5.     Simple and easy system of office work and effective supervision, use of simplified and fewer account forms without provision for an accountant.
6.     There is no office assistant or security guard in the branch office.
7.     Decentralized operation and management following written manual.
8.     Reduced administrative overhead costs following decentralized decision making power and delegated fund management.
9.     No expenditure for technical assistance.
10.  Provision for one staff at the area level (AM) and one DM at the divisional level without separate offices or secretarial staff.
11.  Branch office is the centre of all activities at the field level.
 
Income Increasing Factors:
1.     No group liability hence non-defulters are getting loan
2.     Quick expansion into new areas, fast group formation and high density of groups in working areas.
3.     Fast provision of the first loans to new members.
4.     Strict control on weekly installments and promotion of savings mobilization.
5.     Mandatory savings allow predictable funds to be efficiently lent out.
6.     Quick information on default and serious default management.
7.     Provision for insurance of borrowers.
8.     Flexibility in changing conditions to increase turnover and improve income.
 
As a result of these cost reducing and income increasing factors of ASA, it enjoys the sustainability status within the shortest possible time, i.e., within one year of the beginning of a branch office operation. These are the specialties of the ASA microfinance model.
 
A S A  Self – Reliant Development Model
A branch office in the field is the centre of all actions for implementing ASA’s ‘Self-reliant Development Model’. It controls efficiently the fund management activities as a part of the decentralized management approach. A branch office of ASA consists of one Branch Manager and 4 Credit Officers. The responsibility of managing 1,440 group members on an average lies in the staff of the branch office. The management of the ASA branch office reflects a model of cost-effective management system.
Analysis of the cost from the start of a branch office reveals that Tk. 0.32 million is required per annum for the salary of the staff, which stands at Tk. 26,667 per month. The office expenses required per month including office rent, electricity, gas, water, maintenance, stationery, entertainment, TA/DA, etc. are Tk. 4,350.
As compared to other NGO’s, ASA takes considerably as less time to perform any mission successfully. In the field of cost effectiveness can be achieved by ASA within only 6 months. ASA can reach the break-even point within 12 months period by adopting the means of minimizing cost.
Sources of Fund
The present sources of ASA’s microfinance funding in operation are institution’s own fund, members’ savings, fund from PKSF, grants from CORDAID and MISEREOR. ASA’s total fund up to December 2000 was Tk. 5,551.24 million, which includes donors’ grants and ASA’s own fund of Tk. 1,682.71 million, a PKSF outstanding loan of Tk. 1,600.00 million, group members’ savings of Tk. 1,607.27 million, CORDAID loan 22.09 million and other (mentioned in the box) at Tk. 639.17 million.
 

 
ASA Microcredit and Microsavings Program
ASA was started with a relatively radical social transformational agenda. In 1990-91, its management decided to concentrate on microfinance only by excluding its all other programs gradually. In course of time, it has been well established that the microfinance program of ASA, which is basically divided into two major components, microcredit and microsavings, is the most effective microfinance program. Because, this program of ASA includes the cost reducing and the income increasing factors. This microfinance program can satisfy poor people’s financial need as the terms and conditions of the same are easy and income increasing. On the other hand, this microfinance program is cost reducing, simple, flexible and the recovery rate is very high.
So the microcredit and microsavings programs have been proven most effective to ASA for expanding outreach and increasing fund. The main goal of microfinance program through microcredit and microsavings is to strengthen and empower the poor especially poor women of Bangladesh. ASA wants to help poor people to escape poverty and involve them in the development process. The microfinance program achieved a great success because the members, branches and working areas are increasing day by day and the poor women are able to operate their small income generating projects beside the household work with the financial assistance from ASA.
Details of ASA activities have been elaborated with illustrations in the following for more general information. Information reflect here importantly for the year up to 31st December 2000.
Microcredit:
In the field of poverty alleviation, ASA’s microcredit program plays an important role. Poor women have created self-employment drawing loan from ASA, which made them self-reliant. They can receive an amount of 4 to 6 thousand as initial loan. The total amount of loan along with 15% service charge is divided into 46 installments, which has to be repaid within a year. The repayment of installment begins after 15 days of disbursement and 3 weeks in a year are considered as grace period. ASA loan products are as follows:
 
Small Loan:
Landless and assetless women whose monthly income does not exceed Tk. 2,000, and who own less than 50 decimals of cultivable land. Initial loan for them Tk. 4,000 – 6,000 (US$ 75 – 113) and yearly increase amount Tk. 1,000 – 2,000 (US$ 19-38). Loan Term-1 year and Service Charge-15%.
 
Small Business Loan:
Small business at the market place or small enterprises such as home based poultry farming, carpentry, etc. Initial loan for them Tk. 12,000 (US$ 226) and yearly increase amount Tk. 2,000 – 3,000 (US$ 38-57). Loan Term-1 year and Service Charge-15%.
From the beginning of the microcredit program, up to December 2000, the total disbursed amount and service charges were about Tk. 29,638 million. Total loan realized was Tk. 25,055 million and the amount of outstanding was Tk. 4,583 million among 1,128,693 group members. From January 2000 to December 2000, Tk. 8,487 million was realized including Tk. 996 million as service charges.
 
Total Achievements in the Microcredit Program are Shown in the Table Below:
 

 
Sector-wise Credit Disbursement are as Follows:
 

Note: Source of percentage: donor report 2000.
 
Particulars of the program are given below:

 
 
ASA Microsavings
One of the most effective tools for poverty alleviation is microcredit, and the savings products are intrinsically connected to microcredit. By saving voluntarily and weekly the group members can enhance their capital. ASA has introduced (1) Weekly savings: Group members have to deposit fixed amount of Tk. 10 per week mandatorily. (2) Voluntary savings: In addition to the weekly savings, group members are allowed to save any amount they wish. These savings programs promote the habit to save and resulting to accumulation of a huge amount of loanable fund.
Total savings mobilization up to December 2000.
 
FINANCIAL ANALYSIS ASA
 
ASA: A Self-reliant MFI
ASA started microfinance in 1991 as the sole program and became self-reliant in 2001 following ASA Cost-effective and Sustainable Microfinance  Model. Since then ASA does not accept grant or donation from others. ASA’s total fund for providing microfinance services was Tk. 24,611 million at the end of 2006. 18.75% This includes, Tk. 13,981 million of ASA’s own funds (including reserve fund), Tk. Member’s 1,013 million PKSF loan, Tk. savings 3 647 million member’s 14.82% savings, Tk. 4,614 million members’ security fund, Tk. 117 million CORDAID loan, Tk. 345 million loan insurance, Debt Management Reserve (DMR) Tk. 597 million and Tk. 297 million from other sources, such as, staff security, provident fund, etc.
 
Income and Expenditure in ASA
During the year 2006, total income of ASA was Tk. 5,643 million. This income includes, Tk. 5,412 million from service charges, Tk. 158 million from bank interest, Tk. 20 million from membership fees and Tk. 53 million from other sources, such as, selling publications, passbooks, used newspapers, providing consultancy services, etc.
 
On the other hand, total expenditure in 2006 was Tk. 3,514 million, 1,462 million as personnel expenditure expenses, Tk. 232 million            Imputed costs office expenses, Tk. 486 36.20% million in financial costs, Tk. 62 million loan loss provision and Tk. 1,272 million imputed costs. The net margin at the year-end of 2006 was Tk. 2,129 million. This fund will be used in program expansion further to assist the poor to get a better living standard.
 
Rate of payment
ASA’s management has been successful always in maintaining a high rate of repayment. This has been possible due to innovative policies of ASA model. Since 1995, ASA’s rate of recovery in each year was above 99% and in 2006, it was 99.85.
 
Operational Efficiency
Monitoring system is very cost-effective and there is a close relation between the field and the central office. It ensures a regular constructive feedback from the field that helps the management to improve ASA’s operational efficiency. Keeping the cost of per taka lent at the minimum has also been possible for following this       0.000            0.010   0.020 process. In 2006, cost per taka lent in ASA was Tk. 0.041.
 
Self sufficiency
ASA started microfinance in 1991 as the sole program and became self-reliant in 2001. Since then, it does not allow any grant and tries best to utilize its own fund as well as the members’ savings. The institution also uses’ its idle money as the Revolving Loan Fund (RLF).
 
In 2006, the Operational Self-sufficiency (055) and the Financial Self-sufficiency (FSS) in ASA were 252.22% and 160.73% respectively

Analysis

The impact of micro credit in regard of Women empowerment is shown how much role it plays and in which sectors by discussing survey of 30 clients of micro – credit and borrowers. Some important question of each survey has been quantified in need of analysis.
Women empowerment is explained through 6 dimensions in this research paper. Each dimension is used to show the degree of women empowerment.
 
 

 
Table 1: Women empowerment
Positive Sign

4. Mathematical score     0-10 = Lower level
5. Mathematical score     11-20= Mid level
6. Mathematical score     21-30= Top level

Negative Sign
1. Mathematical score       (0-10) = Lower level
2. Mathematical score       (11-20)= Mid level
3. Mathematical score       (21-30)= Top level
 
–          Mobility of women is an important element of women empowerment. This table shows that mobility of women has been increased because of borrowing micro-credit. Although mobility of women is not more considering numerical expression but it has more social value in case of women empowerment. A person as an indicator of freedom has not reached at the expected level. It is observed from the table that 56.67% mobility of women has not been achieved which is not a good sign. But micro credit has grown up the mobility of women. More discussions are mentioned later. Another important element of women empowerment is economic security. The table also shows that women have achieved comparatively more economic security. From the table-1 it is seen 41.67% Economic security is not achieved. It indicates a good sign of women empowerment although it has not reached at the top level. It is clear to observe that purchasing power has been increased because of borrowing micro- credit. The table-1 shows that the purchasing of women at mid level because of taking loan where 46.67% of purchasing power is not fulfilled.
–
The fourth dimension indicates women are gradually participating in decision making although 53.33% is not reached at expected level. Day by day women are becoming self reliant because of taking micro-credit so today they can participate in decision alone. Now-a-days they always do not depend upon their husband and family like before because of micro-credit. As so late the mobility, economic security, decision making and purchasing power of women have been increased by blessing of micro-credit. Therefore, the depending tendency of women is gradually reducing. Even husband or other family members do not dare to dominant them. As a result the conflict between husband and wife and family violence have been reduced gradually. It is clearly seen in this research that micro-credit has played an important role to remove family violence  from security at expected level which is -11.07% gap between obtained score and total score. Through above activities, women are also becoming aware about their personal and social  status and legal rights. The micro credit- project help them to be self reliant.
 

Mobility

According to the tradition and social value, women are house-wife , so they have to stay at home and to work at residence. But micro- credit project has broken this traditional concept and encouraged them to work out of the residence and to work with men.

 
Table 2: Mobility
Positive Sign

7. Mathematical score     0-10 = Lower level
8. Mathematical score     11-20= Mid level
9. Mathematical score     21-30= Top level

 
Through research it is seen that although most of the borrowers are involved with productive activities but 35% of them work out of the residence for economic activities such as for business , that  means purchasing or selling . Therefore the tradition view of the society has been changed. Now they are earning member and decision maker of family which are their social status. On the other hand 52% women go out of the residence for several activities such as to borrowing loan to pay loan to negotiate with other women to discuss with about business or other problems of family. Actually this table shows that micro-credit is planning a vital role to raise the mobility of women.

Economic Security

 
Table 3: Economic Security
Positive Sign

10. Mathematical score     0-10 = Lower level
11. Mathematical score     11-20= Mid level
12. Mathematical score     21-30= Top level

 
From this table it has been observed that economic security of family has been reached at the bottom of expected point . So , their family feel economic security for short term in case of micro-credit because long term security depends on different factors .The borrowers whose economic security has been grown up , 48% of them has properties in case of earning money. All of the members of ASA and Buro Bangladesh have to open a deposit account so they have to save money at minimum level as a compulsory requirements and maximum according their desire. It is one kind of financial security for them . Even the loan officers also encourage them to open an insuranceof SDPS which provid an economic security for uncertain future.
 

Decision making power

 
Table 4: Decision making power
 
Positive Sign
Mathematical score           0-10 = Lower level
Mathematical score           11-20= Mid level
Mathematical score           21-30= Top level
 
Through research it is recognized that the confidence level of women has risen because of micro-credit and they have acquired purchasing power according to their desire. It is very important factor regarding women empowerment. The borrowers who play an important role in case of decision making, 65.33% of the take decision incase of personal buying such as for themselves and for their children and 50.67% of the take decision about their business and investment. This table also shows that 32 % of the borrowers take  decisions in case of buying land or properties and renting house. Now- a – days they co-operate in decision making with their husbands in some matter. So, this is the great contribution of micro-credit in case of women empowerment.

Purchasing power

 
Mathematical score           0-10 = Lower level
Mathematical score           11-20= Mid level
Mathematical score           21-30= Top level
Micro credit has increased the ability of women purchasing power. Form this table, it is seen that 92% women of Micro credit borrowers said that their income are generally expended in purchasing necessary goods of family. This is the result of Micro credit because the Micro credit borrowers are directly or indirectly investing their borrow ring money. But they cannot avoid the needs of family. So the expended the lion part of their income for family. While the table shows that 54.67% of them can buy necessary goods for themselves. On the other hand only 9.33% Micro credit borrowers can by luxuries goods. It is also a good sign in respect of women empowerment where is few years ago they were idle and they had no income source. From this chart it is clear to us that the purchasing power of women has been increased although it has not reached  at the top level.
 

Table 6: Family Violence

Negative Sign
 
Mathematical score           0-10 = Lower level
Mathematical score           11-20= Mid level
Mathematical score           21-30= Top level
 
 
From this research paper it is observed that family violence of women is bellow lower level that means family violence has been reduced largely by blessing of Micro credit. Although it is a common phenomena in our society that wives are physically tortured by their husbands. Now a days it also happens in rich and Middle  class family. So Micro credit is playing an important role reducing family violence. This charge also shows that 0.67% women are physically tortured. This study shows that family violence has been reduced up to expectation.
 

Table 7: Personal, Social & legal awareness

Mathematical score           0-10 = Lower level
Mathematical score           11-20= Mid level
Mathematical score           21-30= Top level
 
From this chart it is seen that personal, social and legal awareness have raised at mid level. This table also shows that 66.67% of Micro credit borrowers are interested to education if the get opportunity and facility of education, they will devote them. Whereas 28% are aware and conscious about legal rules and marriage registration and 30.67% of them are aware of dowry system but at the time of interviewing the told that they cannot cross the social traditions. This table also shows that 41.33% of borrowers are so much conscious of heir laws. According to the charge it can be said that women are becoming aware of personal social and legal activities. And as so late media is also playing and important role to increase this. So the Micro credit borrowers are more advanced and conscious of their rights and legal power them non borrowers. Because Micro credit borrowers  have to get together once a week. Whereas they can share well and woe and converse about their problems.  Micro credit, thus, is playing a vital role to established empowerment of women.
 

Findings

 
Explaining results of the research the observations outputs are given below
(1)    Micro credit has increased the women empowerment although it would not establish complete power of women.
(2)    Micro credit is playing an important role to remove poverty and thus it is widening the way of women empowerment.
(3)    Micro credit has increased the mobility of women at mid level.
(4)    Many of them are literate though they have no any idea about utilization of the money before taking the loan. Sometimes they don’t use the loan directly; they y take the loan on behalf of their husband or son.
(5)    Through this study, it is found that after taking the loan profession of the borrowers has changed simultaneously.
(6)    Micro credit has reduced the family violence up to expected level which is seen from this research paper.
Considering over all situation it is observed that women
empowerment has reached at  mid level through micro credit
(7)   it has increased family income and quality of life, and as women represent 90% of the borrowers, their contribution is noteworthy;
(8)   it has promoted saving habits among poor women borrowers;
(9)   it has raised awareness and empowered women to contribute to various socio-economic activities; and
(10) it has motivated women to take an active role in the political sphere of Bangladesh.
 
Considering the over all situations, we should agree that the contribution of micro finance programme in women empowerment through reducing power as well as socio-economic development of borrowers has become in a partial way rather than absolute way. Though the NGOs play an important role to  increase women empowerment through reducing the poverty, it is also true that there are too many barriers and problems through operating the micro finance programme.

Limitations of Micro credit program

Local Non-Government Development Organizations (NGDOs) in Bangladesh have shared their concerns about restrictions recently placed on their work. TEAR Australia has a long-standing commitment to act in partnership with Bangladeshi NGOs as they work for community development and poverty reduction. Through this paper and case studies, some limitations of micro finance are identified as follows­
 
1.      The major limitation of micro credit institutions is higher interest rate of 15% where as the interest rate of traditional commercial bank or other financial institutions is much less than that.
2.      The borrowers don’t get any chance to skip any installment in case of difficulties. The lenders don’t reschedule the time format for the repayment.
3.     The clients must make savings to be a member. But they can not even withdraw it in case of emergency. They can withdraw it after a fixed period of time. Often these savings are adjusted for the repayment of the missing installment.
4.      Most of the NGOs provide only loans, they have no training programs. So it is difficult to make proper utilization of the loan by the borrowers.
5.      Most of the women take loan but they don’t use that directly. They take the loan on behalf of their husband or son.
6.      Since there is no alternative sources of properties, the borrowers have to confront a crucial problem when they lose their investment due to natural calamities such as flood, tornado, cyclone.
7.      The NGOs provide a little amount of money, which is almost inadequate for the borrowers to invest in a productive sector.
 
The Government of Bangladesh has also intensified restrictions on the operations of national NGDOs in the following ways:
 
v  The Government has made new rules and regulations relating to the approval of new proposals submitted by NGOs. Under the new system, NGOs are required to obtain a certificate of approval from respective working areas (from the Deputy Commissioner and the Upazila Nirbahi Officer). NGOs are also required to obtain a clearance certificate from these local officials annually as part of an already rigorous process, under the Government NGO Affairs Bureau, to secure approval for a following year’s budget and funding. In instituting the new rules, Government did not consult with the Association of Development Agencies in Bangladesh (ADAB), an umbrella organization of the NGOs, and the NGO community. The new system is creating serious bottlenecks. The process of obtaining clearances from local officials is time-consuming and costly, and the scope for bribery and corruption at the local level is increased. The resultant”-­delays threaten the viability of projects.
v  Government has tightened its grip on some leading NGOs ‘suspected’ of The being ‘sympathizers’ with political opposition parties, blocking clearance of funds consequently stalling poverty reduction activities of about 1,000 small, subsidiary community organizations. More than 100 national NGOs, including the five largest, have been waiting for over six months to obtain the clearance of funds from the Government’s NGO Affairs Bureau (the bureau’s clearance is required for an NGO to receive foreign funds). The standing rule declares that clearance should be given within 45 days of request.
v  The Government intends to impose V A T (Value Added Tax) on some NGO activities that are deemed to be commercial. It seems that the Government is also considering imposing a 1-% service charge on all foreign donations received by NGOs.’ The NGO community and its umbrella organization ADAB oppose this idea.
v  The Government has sought to divide the NGO community by bypassing the ADAB and calling only a few select organizations to key meetings and bodies (e.g. the pre budget meetings, the Cabinet Committee on NGO Affairs)

Conclusion:

A vast portion of the country suffers from the curse of poverty. After independence, the disarray of the war-torn economy further intensified the poverty of the people. Having no scope for survival their sufferings increased day by day. In this criticsituation,microcredit institutions have appeared and sought to enlighten the hopes of the poor of the country. They have played a vital role in reducing the poverty of the distressed  people .with their innovative microfinance model   that it’s a great success
 
The strength of microcredit lie in its ability to organize idle women into a productive workforce with their proven creditworthiness. It is believed that 25 million people worldwide are now using microcredit to undertake income-generating or self-employment activities; of these, 90% are women. Microcredit has not only made women more productive, it has also empowered them. As a result women are now integrated into socio-economic activities, contributing to family income and decision making and exercising more control over their fertility, which allows them to take better care of their children.
 
Microcredit is an important financial instrument to generate economic activity. About 1,200 microfinance institutions (MFIs) are now operating in Bangladesh. They are extending credit to about 8 million people, of whom 90% are women. The borrowers are mostly self-employed, and they are involved in numerous income generating activities. In addition, these MFIs have created employment for about 70,000 people, about 20% of who are female. The industry has so far extended a total credit of Tk. 66,566 million (US$1.4 billion), of which Tk. 18,164 million remains outstanding in the field. Microfinance has been very effective in mobilizing savings from the poor borrowers. The net savings of the borrowers is Tk. 5,216 million. Currently the members’ savings meet about 20% of the total revolving fund. Microcredit claims a high recovery rate from the borrowers, over 95%.
 
But It is not true that only for the micro credit e poverty IS alleviated. If we don tsupport the micro credit program then the number of poor will be increased and it is very tough for us to move in urban area due to the gathering of poor people. In that  Respect we can say that the micro credit has stopped the increasing poverty seen where the infrastructure especially the Rural electrification, the roads development and the structure of market is developed there the activities of micro credit is flourished. Me parts Of night Bengal filled with a lot credit is due to laek of infra struehlfal development of volubly or Estate. f..pr that reason it i3 seen that in employment is net ereate9 properly. So the advancement of micro credit is not possible if the development of infrastructure is ensured. The micro credit system has a. major fault i.e. it is not suitable for the poor people. We observed that the beggar could take the opportunity of micro credit, if  we give them chance.
 
Microcredit, thus, is not sufficient in the process of empowering income poor women, but it is of the very important ingredients in that process.
By this time ASA and Buro have already started to give the bugger micro credit and recording these they are successful. They also come foreword to alleviate poverty through micro credit system
But it is seen that micro credit is necessary to develop women empowerment through reducing poverty but is not a long lasting process. We think a sound and trusting environment have to be created for that. Poverty allev1ation is not possible in injustice .enriched society. We never are able to lessen poverty through micro credit program, if the chance of micro economic policy occurred. Micro credit can widen opportunity.
 
Through the study it has been seen that although micro-credit has hasten the economic security of borrowers it can not be said that complete empowerment of women has been establish .Although they have become aware and conclusion of personal , social , political and legal activities , the application of them has not been seen. Actually the contribution of micro-credit in respect of legal personal and social and political awareness is not remarkable. At the eleventh it can be said that it is too complex to find out the actual empowerment of women through micro- credit. In this study six dimensions has been used to measure the empowerment of women. These dimension are not free from mistake. Besides these other elements may be included. Lastly it can be said that micro-credit has widened the way of women empowerment.

Recommendation

In this study, it has observed that the activities performed by micro credit organizations
for women empowerment through socioeconomic development have some limitations. Considering this
some suggestion can be prescribed  that can be followed by the NGOs as follows:
 

• The advancement of micro credit is not possible if the development of inf Tastructure is ensured. Because where the infTastructure especially the rural electrification, the roads development and the structure of market is developed there the activities of micro credit is flourished.
• They should provide training programs to the borrowers so that they can utiliz the loan properly. They should conduct more programs for mass education.
•  A sound and trusting environment have to be created to lessen the poverty.

Poverty alleviation is not possible in injustice enriched society.

• Micro credit can make opportunity of income, but it doesn’t ensure the economical stability. So, the micro-finance institutions never are able to lessen poverty through micro credit program, if the chance of micro economic policy occurred.
• Maximum NGO’s are working to develop the societal purposes. So, they have over look whether the money is going to the individual hand or it has been reinvested in the society. It should be observed that whether the profit go through the director of among or to the poor people who are engaged with the micro credit programs are important.
• To lessen the poverty ratio then the income of poor people have to increase in duplex way than the income of rich people. To do that the NGOs have to start a poverty base micro economic policy that will be helpful for the poor. They have to think about 30 million unemployed people of Bangladesh. If they don’t remove the unemployment and unable to create the employment, then the micro credit system will be totally worthless, and is quite impossible to reach millennium goal.
• There may have some subsidy in the budget, so that, they have to decline the
• At of interestWomen need advice about how to utilize public, private, natural and other resources and services.