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The Synthesis of Grameen Bank, BRAC and ASA Microﬁnance Approaches in

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Cover Photo Women’ s microfinance group meeting in Bangladesh
Photo by ZHANG Xiaoying, IPRCC
IPRCC
The Synthesis of Grameen Bank, BRAC and ASA Microfinance Approaches in Bangladesh
The Synthesis of Grameen Bank, BRAC and ASA
Microfinance Approaches in Bangladesh
—M. Wakilur Rahman , Xiaolin WANG , Salehuddin Ahmed , Jianchao LUO
Abstract
T he paper describes the operational mechanism/institutional innovation of key Microfinance Service
Providers (MSPs) in Bangladesh. Grameen Bank (GB), Bangladesh Rural Advancement Committee
(BRAC) and Association for Social Advancement (ASA) have been chosen to investigate the microfinance
approaches. Selected MSPs are dominating microfinance market in Bangladesh in outreach, outstanding
loans, savings and efficient service delivery mechanism. They offer micro-credit, savings and social services
to the poor who were deprived from such access offered by conventional banks. However, they have distinct
features with respect to group formation, service mechanism, product diversity and management systems.
Grameen Bank, a special kind of Bank, offers loans to the poor particularly women in groups of five. BRAC
is a private sector development organization providing financial and extensive social services to the poor in
groups of thirty to forty. This group mechanism creates peer social pressure and solidarity, which seems to
work well in a society where social networks are often of vital importance. Meanwhile, ASA as a full fledged
microfinance institution offers individual loans groups consisting of 30-40 members in a group and the group
co-liability is absent. GB, BRAC and ASA have been able to demonstrate the effectiveness of microfinance
program towards sustainable development for the rural poor in Bangladesh. They have accomplished their
effective and efficient management skills, innovative approaches and decentralized management systems.
Meanwhile, microfinance clients particularly women have proven their talents for utilizing loans, maintaining
regular repayment, credit discipline and the sincerity which have extended microfinance business scope in
a sustainable manner. The present study contributes to the literature on diverse microfinance approaches.
The study may lead to further methodological improvement of the microfinance institutions in Bangladesh and
elsewhere. Finally, microfinance practitioners and policy makers might gain better understanding on existing
microfinance approaches in Bangladesh and can think or re-think for adaptation.
Keywords: Bangladesh, Microfinance approach, Grameen Bank, BRAC and ASA
1
Intern, International Poverty Reduction Center in China (IPRCC), PhD Candidate, NWSUAF, China and Faculty member, Bangladesh Agricultural University, Bangladesh
2
Director of Research Division, International Poverty Reduction Center in China (IPRCC), Beijing, China
3
Chief Technical Adviser, International Poverty Reduction Center in China (IPRCC), Beijing, China
4
Director and Professor, Institute of Rural Finance, College of Economics and Management, NWSUAF, China
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1．Introduction tremendous success in developing innovative
micro-credit models, service diversification, financial
Bangladesh is the pioneer adopter of modern sustainability and reaching microfinance to poor clients
concept of microfinance in the world. The concept since inception in 1970s. For instance, GB, BRAC
of microfinance is not only provision of micro- and ASA microfinance approaches are considered
credit but also the provision of savings, insurance, most successful approaches in the world. They are
remittance, health, education, skill training and dominating microfinance market/sector in Bangladesh
social awareness etc. According to United Nations in outreach, outstanding loans, savings and efficient
definition, microfinance is loans, savings, insurances, service mechanism. Until now GB (8.32 million),
transfer services and other financial products for BRAC (8.45 million) and ASA (over 5.73 million) have
low-income clients (UN, 2006). So, microfinance is extended services over 22 million out of 40 million
the financial and non-financial services to the poor microfinance clients (apart from overlapping) (MRA,
who were traditionally not served by the conventional 2010, Rashid et al. 2010). It is worth to mention, the
financial institutions. Noticeably, a huge number approaches have crossed the national boundary and
of Non-government Organizations (NGOs) and have been adapted by others with little modification
Microfinance Institutes (MFIs) have been promoting according to suitability of the specific regional
financial inclusion to the poor alongside government environment. As recognition of their success, they
in the globe. Accordingly, financial and non-financial have received several prestigious awards from
services have enhanced the inherent potentiality of national and international organizations. For instance,
the poor for entrepreneurship, income generation, Grameen Bank and Prof. Dr. Mohammad Yunus jointly
self-reliance, employment creation, increase wealth were awarded “Nobel Peace” prize in 2006 and
and at the end reducing poverty. More specifically, Presidential award in 2010; Sir Fazle Hasan Abed
microfinance has been empowering the poor founder of BRAC was awarded “Knighthood” by
particularly the women in a society. Microfinance has the government of United Kingdom in 2010 and the
served 150 million borrowers with 39 billion USD in “Entrepreneur for the World” in 2009; Association
loans and holding 22 billion USD in deposits from for Social Advancement (ASA) was the winner of
67 million clients (MIX, 2010, Pacheco et al, 2010). “Banking at the Bottom of the Pyramid” in 2008
Meanwhile, Microfinance Service Providers (MSPs) by the Financial Times (London) and International
have developed and improved a good number of Finance Corporation (IFC).
original methodologies and defied conventional
wisdom to financing the poor with maintaining financial Nevertheless, microfinance approaches are not similar
viability (Morduch 1999, CGAP, 2006). Encouragingly, for GB, BRAC and ASA. However, it may be noted that
Bangladesh has one of the largest, most innovative there has been learning and cross fertilization among
and best known NGO and MFI communities in the three institutions. Grameen Bank is a special kind of
world (DFID, 2010). Hence, the country has achieved Bank established to helping the poor who were denied
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from conventional banking system. BRAC is a private
3. Why and how GB, BRAC
sector development organization providing financial
and extensive social services to the poor while ASA

and ASA Emerged?
is a full fledged microfinance institution assisting Grameen Bank started in 1983. It is rooted in the action
poor with financial and supplementary services. research arrived out in Jobra village (a village adjacent
Accordingly, each and every microfinance service to Chittagong University, Bangladesh) by Nobel
providers have distinct features with respect to group Laureate, Dr. Mohammad Yunus in 1976. The action
formation, service mechanism, product diversity and research was examining the possibility of designing
management systems etc. a credit delivery system to provide banking services
targeted at the rural poor. In that time, rural poor was
The present study aims to critically synthesize the denied from financial services by formal banks and
three approaches that are been practiced by GB, mostly dependent on money lenders. Hence, the
BRAC and ASA in Bangladesh. It is expected that the project was aimed to extend banking facilities to the
elaborate discussions on three approaches might help poor women and men, eliminate the exploitation of the
microfinance practitioners, experts, policy makers poor by money lenders, create opportunities for self-
and service providers to understand the microfinance employment, building organizations and forming reverse
activities in a clear terms and re-think about future dimension of poverty circle (i.e low income, injection of
plans, strategies and actions. credit, investment, more income, more savings, more
investment, and more income). The project’s success
was implemented in other parts of the country with the

2. Methodology support of central bank of Bangladesh. Accordingly, the
The study mostly relied on secondary sources of project was transformed into an independent bank by
data. However, discussions were carried out with government legislations in 1983. Today Grameen Bank
several microfinance experts to strengthen the is owned by the rural poor whom it serves. Borrowers of
quality of the paper. The paper is descriptive in the Bank own 95% of its shares, while the remaining 5%
nature paying special attention to comparative is owned by the government (GB, 2010; Casuga, 2002).
features. Secondary data were gathered from BRAC was started in early 1972 as a relief effort
published articles, conference proceedings, annual following the War of Liberation. In the War, a huge
report, Microfinance Regulatory Authority (MRA) in destruction (i.e human life, houses, roads, railway,
Bangladesh, International Poverty Reduction Center bridge culverts etc.) were made by Pakistan army. Like
in China (IPRCC) and the websites of GB, BRAC other development organizations, BRAC was started
and ASA. Grameen Bank (GB), Bangladesh Rural to re-build the nation in close collaboration with the
Advancement Committee (BRAC) and Association government. Accordingly, it became a community
for Social Advancement (ASA) were selected for development organization providing health, family
discussion on their microfinance approaches. planning, education and economic support to different
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sectors of the rural community with particular emphasis with awareness building, legal aid, training and
on the most disadvantaged, such as women, fishermen communication support. Soon after ASA realized the
and the landless. So, BRAC evolved from a relief and importance of credit and it started social plus income
rehabilitation organization to a development organization. generation activities. In this stage, empowerment
In 1974, BRAC provided credit to the villagers in its was achieved through the improvement of health,
Sulla Project in Sylhet district through the Sulla Thana nutrition, education, sanitation and by credit available
Central Co-operative Association. In the following year, to the poor. However, significant number of group
credit was advanced without interest to several landless members left ASA and joined other NGOs. This
groups. In 1976, BRAC started providing credit to aggravated situation inspired ASA to re-invent
landless through its Manikganj project. BRAC believes credit plus programs that eventually led ASA to be
in the complexity and comprehensiveness of the a full fledged microfinance institution. Accordingly,
poverty issue. It is a more empowering human resource ASA has emerged as one of the largest and efficient
approach to development. Poverty is not a microfinance Microfinance Institution (MFI) in the world.
issue only but a multidimensional issue needing multi-
faceted integrated approaches. Therefore, BRAC is
not an MFI, it is a development organization. Thus,

4．Organizational Structure
BRAC has always opted for the “credit plus- plus" The Grameen Bank is regulated by the government
approach, where loans are given to poor women in ordinance of 1983. This laid down a board of governors
combination with establishing enterprises, health care composed of the chairperson, the managing director,
services, various forms of skill-training, non-formal and nine other members - five appointed by the
primary education for children of BRAC members, government and four appointed by the borrower-
social development and the creation of grassroots shareholders. Since 1986 to present, the bank has a
organizations for the poor (Halder, 2003). At present, thirteen member board of which nine are selected from
BRAC has expanded microfinance services not only in the borrower-shareholders. The board approves the
Bangladesh but also served other developing countries policies of the bank and serves as the link between the
in different parts of world. bank, the Ministry of Finance, the borrowers and other
government organizations.
From a similar background, ASA was established in
1978 to supporting the poor organize and empower The Grameen Bank is a decentralized, pyramidal
themselves so that they could establish their political banking structure including lending units, centers,
and social rights for a just society. ASA received branch offices, area offices, zonal offices and a
formal registration from the government in 1979. In the head office in Dhaka (Latifee, 2008). At the village
beginning, ASA deliberately avoided lending arguing level, solidarity groups are the basic lending units. In
that loans would distract the rural poor from their fight decentralizing process, the management functions
for a just society. So, ASA programs were limited and decision making powers have gradually been
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delegated to lower levels. The branch office is the the internal and external auditors in order to recommend
lowest administrative unit of the Grameen Bank. In appropriate remedial action. There is an executive
fact, the zonal offices were added to the structures management body consisting of one Chief Executive
later on. Over the years, most of the functions of the Officer, one Adviser, two Executive Directors and three
head office have been transferred to zonal offices. The Deputy Executive Directors and twelve Directors who
zonal offices delegate to the area offices the power of oversee the overall management and implementation of
account supervision and loan approval. In this process programs (BRAC, 2010).
of horizontal growth and decentralization of power,
the head office becomes a secretariat or information BRAC is also a decentralized organization with a strong
clearing house. In order to encourage competition and management structure i.e head office, regional offices,
achieve the objectives of sustainable operation and zonal offices or branches. The frontline members of
poverty alleviation, Grameen has introduced five star the BRAC management are the Program Organizer
systems in its management. It examines both financial (PO) who remains in the closest proximity of BRAC’s
and social performance and leads the system to higher participants. A PO should cover 350-450 members
level growth. The 5 stars are green, blue, violet, brown through 12-15 VOs. Usually, BRAC has a main post that
and red. These are provided to branches and staff for oversees the execution of its different core and support
100 percent achievement of a special task. The green programs at Upozila (sub-district) level. All activities
star is for 100% repayment, the blue is for earning are carried out through branch offices (as well as the
profit, the violet is for self-financing, the brown is for area offices). Generally, a branch office consists of
all children in school and the red is for all the members 4-6 POs, one PO (Accounts cum computer data entry
moving out of poverty (Latifee, 2008). person), one PO in-charge. Area Manager at Upazila
level is responsible for monitoring all programs
BRAC governing body consists of sixteen members. including credit and other support programs. The
Apart from the Chief Executive Officer, Sir Fazle Hasan Area Manager sits in the office, which is situated in its
Abed, who is the founder chairperson of BRAC, all other own building. A regional manager is responsible for
members of the governing body are non-executives looking after the microfinance program of 13-15 Area
and executives (two members from executives). Offices and their outpost.
The governing body consists of highly distinguished
professionals, activists and entrepreneurs who are ASA’s governing body consists of seven persons along
elected by the general body and bring their diverse with Chairman Mr. Shafiqul Haque Choudhury, the ex-
skills and experience to the governance of BRAC. The officio Secretary and founder & president. Governing
governing body is assisted by an audit committee body determines policy and budgets, manage
which assists in reviewing the financial condition of the resources, and set the rules for and monitor the field.
organization, the effectiveness of the internal control The Chairman of the Governing Body plays a decisive
system of the organization, performance and findings of mediating role. Generally founder president is playing
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vital role in the decision making process. However, and Documentation Section and IT. The President of ASA
ASA has adopted two-tier system of operation- the directs the personnel of different sections.
central office and the branch office in the field. Branch
offices can be considered as center of activities. Branch
offices are independent cost and profit centers. All

5．Ownerships Status
activities of ASA branches can be done and approved There is an ongoing debate on the ownership pattern of
by the branch office itself, as long as it confirms to the the microfinance organizations throughout the world. In
ceilings identified by the working manual. The working fact, most of the microfinance organizations are (NGOs)
manual changes each year to keep up with all relevant private by nature and the general feature of such
changes. Each branch has one Branch Manager (BM), organizations is not for profit. So, they cannot distribute
one Assistant Branch Manager (ABM) and 4 Loan the profits. On the other hand, if someone owns the
Officers (LO) on average. Branch offices do not have organization, they will make profit and provide better
accountants or cashiers. Loan officers are responsible service as well. But, due to profit orientation, they may
for maintaining daily accounts and rotate to perform the charge high interest rate for loan and thus the poor will
job of cashier. Branch accounting and transactional be the ultimate victims. BRAC and ASA are registered
accounts are maintained by the Branch Manager. The as a non-political, non-partisan not-for-profit
LO is responsible for overseeing between 18 and 24 Societies under the Societies Registration Act 1860 (Act
groups comprising of 360-550 members. Each district No.XXI/1860) . While, GB is completely distinct as it is
has a team of Regional Managers (RMs) headed by know as special kind of Bank. Grameen Bank is own by
a District Manager (DM). The district office is in a poor people. The people that the bank provides credit
centrally located branch of the district town/city with to, become the shareholders of the bank and own the
an extra desk for each of the district officials including bank. Each member purchases one Grameen Bank
the District Manager (DM), Assistant District Manager share worth Taka 100 (US$1.50). These shares provide
(ADM). Regional Managers (RM) sit in the different a stake in the ownership of the Grameen Bank for the
geographically important branches. RMs, ADMs and membership as well as their representation in its board
DMs supervise and monitor all field level activities. of directors. Over time, both proportion of members'
The central office consists of Human Resource (HR), share in total capital and the representation have
Operation, Finance & Management Information System increased. At present, GB’s clients own 95 percent
(MIS) Section, Accounts Section, Audit Section, Research ownership and only 5% own by government.
5
ADB (1999), the law was introduced by the colonial administrators of the Indian Empire and some of the oldest NGOs in are registered under this act and the act is still valid in
Bangladesh.
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6．Outreach of GB, BRAC credit programs. For instance, Grameen Bank struggling
members program exclusively for the beggars which

and ASA has extended services over 112,216 beggars. Similarly,
Microfinance outreach refers to the ability of MSP to BRAC has reached 1.17 million ultra poor through
provide financial and non-financial access to a large Challenging the Frontiers of Poverty Reduction (CFPR)
numbers of borrowers who had previously been denied program (BRAC, 2009) while ASA has extended services
this access. However, the question is - can microfinance to 4754 hard core poor with it special credit program
reach to the large number of very poor people by (BRAC, 2009; ASA, 2009).
maintaining sustainability? There are two different
arguments, first- theoretically microfinance targets all In general, microfinance outreach has expanded
the poor clients but in practice it often fails to reach remarkably in Bangladesh overtime with respect
those living in extreme poverty (Rahman and Razzaque, to number of clients especially the women and
2000; Halder et al, 1998; Hashemi, 1997). Second, geographical coverage. For example, Grameen Bank
‘yes’ microfinance can reach to the bottom of the has extended services to 83,458 villages, with 2564
poor at least a certain level (Prahalad, 2010; Dunford, branch offices spread across country, serving 8.32
2006; Halder, 2003). Figure-1 shows the distribution of million borrowers (cumulative no. end of July 2010).
outreach in different financial intermediaries (adopted Similarly, BRAC and ASA have extended services to
from C.K Prahalad’s Book, “The Fortune at the 70000 villages (plus 2000 slums) and 70,066 villages,
Bottom of the Pyramid”). The numbers of people and with 3028 and 3236 branch offices spread all over the
their annual per capita expenditures are taken from country, serving 8.45 million and 5.73 million clients
VISA International and The World Bank. The commercial respectively (cumulative no. end of July, 2010). It is
banks have traditionally, and mostly still do, reach only noted that the percentage of active women borrowers
the top of the pyramid. Credit unions, especially those for the three institutions, GB, BRAC and ASA, are 97,
based on community rather than workplace, have done 98 and 88 percent respectively, which is an indicator of
better in reaching further down the pyramid through their their commitment to empowering women. In Bangladesh,
cooperative principles and lower cost structures, but women’s mobility and their interaction with men other
even they do not generally reach below the international than immediate family members were restricted in the
poverty line. Surprisingly, innovations of microfinance past. The cultural attitudes restrict women’s mobility
have made it commercially feasible to reach further to go to the market, leaving them dependent on men to
down. It is generally agreed that financially sustainable put their income-generating skills and knowledge into
microfinance operations reach the “near poor” and practice in terms of income generation from their assets
the “upper poor”. What about the bottom of the poor (Holmes and Jones, 2010). Accordingly, rural women
those living on a dollar a day or less? Incredibly, GB, are placed in a vulnerable position since employment
BRAC and ASA have reached to the “very poor” opportunities are limited and lack health care services,
people particularly the women through their special receive less nutrition, and are less educated than
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their male counterparts. In addition, there is growing available to them for income generating activities.
number of female-headed households due to divorce, MSPs also provide other non-financial services i.e
death of the male earner, and desertion and male education, health, livelihood development training and
migration. In contrast, it is regarded that women are legal aid ensuring empowerment of women in the
the best care taker of the future generation, efficient society. Accordingly, MSPs have discovered doing
to utilize tiny amount of money and good repays business with poor particularly with women is not
as well. Realizing the issues, GB, BRAC and ASA only profitable but also less risky. The Figure-2
(ASA has micro-credit program for male) focuses shows the number of clients of GB, BRAC and ASA
mainly on rural women, bringing about meaningful overtime, which has shown the sustainability of MSPs
transformation in their lives by making small loans with expanding client horizon.
Figure 1 Outreach of different financial intermediaries in pyramid
GB
9
BRAC
8
7 ASA
No. f Client (in m.)
6
5
4
3
2
1
0
2005 2006 2007 2008 2009 Jul-10
Year
Figure 2 No.of clients of GB, BRAC and ASA during 2005 to July 2010
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7．Product Diversity of GB, Similarly, GB has special services for beggars,
education schemes for member’s children and social

BRAC and ASA business. Grameen-Danone Yogurt (Shoktidoi) Factory
The concept of microfinance does not limit within micro- is a good example for social business. One cup of
credit rather it consists of micro-credit and plus- yogurt provides 30 per cent of the recommended daily
plus. In Bangladesh, Microfinance Service Providers intake of nutrition. Mothers are keen to buy the yogurt
(MSPs) often provide financial (credit, savings, for their children. Going ahead, Grameen's initiatives in
insurance, remittance etc.) and non-financial (non- textiles (the setting up of a textile factory), in agriculture
formal schooling for disadvantaged children or and fisheries (the Krishi and Motso Foundations),
community-delivered health care, training, legal aid in solar and wind energy (Grameen Shakti), and in
and social awareness) services. Interestingly, there telecommunications indicate that Grameen Bank has
is a hidden competition among MSPs to innovate new innovative products to improve the situation of the
products and services in a comprehensive manner bottom poor. On the other hand, ASA has adopted
suiting to poor people livelihoods. GB, BRAC and diversified loan products, savings and insurance as
ASA have experience in all kind of microfinance a specialized microfinance institute. Key products
services. They are offering some common services, and services of GB, BRAC and ASA are- GB offers
i.e micro-credit, savings, micro-insurance and credit, savings, insurance, education, health, training,
education. Meanwhile, they have subdivided loan and remittance and social business. BRAC offers credit,
saving products targeting different socio-economic savings, insurance, education, health, training, social
strata. Beside some common services, there are development, legal aid services program, research and
some specialties in their products and services. For development, human rights and advocacy, public affairs
instance, BRAC has extensive program in education, and communications, human resource development
health, human rights, legal services, agricultural, and so on. ASA is a purely MFI, offers credit, saving,
training, social enterprise, research and extension. insurance and education products. The following section
BRAC is also maintaining the whole supply chain provides details of some core products and services.
-both upstream and downstream -that maximizes
benefits to the poor (Spainhower, 2010). Taking an
example from BRAC dairy and food project, the project

8．Operational Mechanism
provides a market for BRAC's village organization Several microfinance models/approaches have
members. Members take loans to buy cows. They developed in different countries and serve clients
receive training on proper care and maintenance of with diverse socio-cultural backgrounds. However,
the livestock. BRAC ensures forward linkage through Bangladeshi microfinance approaches are extremely
buying milk from these women at a fair price and successful and well known. GB, BRAC and ASA
providing artificial insemination and livestock feed have made successes in their own approaches. Like
which ensure backward linkage as well. other microfinance service providers, GB, BRAC and
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ASA were established to provide financial and other by the center chief who oversees applications for new
supportive services to the poor. But, their operational loans as well as payment of loan installments. The bank
mechanism and service delivery system is quite distinct worker/loan officer attends all meetings, participates in
from each other. the discussions, and disburses and receives money.
Thus banking is conducted openly in front of all
The basic features of GB model are: i) poor people’s members, and members take active roles in discussions
access to credit with women as a priority by forming on progress and problems. In each village, there may
small solidarity groups (5 members); ii) GB’s goes be one or two centers. Centers are responsible for
to the door steps of the clients instead clients coming banking transactions and other social functions as well.
to office; iii) does not require any collateral; iv) small In the process of doing that, they have come up with
loans repaid in weekly installments (there are some something that is popularly known in Grameen Bank as
loan products which accept monthly repayment); and "sixteen decisions" (no dowry, education for children,
v) eligibility for higher loan amount for succeeding sanitary latrine, planting trees, eating vegetables to
loans (GB, 2010). Generally, when a person wants to combat night-blindness among children, arranging
borrow money from the bank, she/he is asked to form a clean drinking water, etc.). Mostly, these "decisions"
group of five people. It is not an easy process to form deal with social issues.
a group of five like-minded friends. This is to ensure
group solidarity. After the formation of a group, the bank When the Grameen Bank decides to open a branch,
discusses the rules and procedures of the Grameen the first task of the branch manager is to prepare
Bank. The group is told that the bank would not extend a socioeconomic report covering the geography,
loans to the five at the same time. In the first stage, only economy, demography, transport and communication
two of them are eligible for, and receive, a loan. Only if infrastructure, and political power structure, of the
the first two borrowers begin to repay the principals plus area to be covered by the branch. Once the head
interest over six weeks, do the other members of the office approves the report, the branch manager then
group become eligible for a loan (GB, 2010). The group organizes a public gathering of all sections of people
is asked to make sure that the money is used rightly in the locality. The Grameen Bank's rules, programs
and repayment is made in due time. In this way group and purpose are explained there. Also, at that meeting
support among the members is built up and a member the bank officials are introduced. It is only after that the
of the group not only becomes responsible to oneself bank's operation begins in that locality.
but also to the group as a whole.
BRAC forms group consist 30-40 people is known as
Usually, eight groups constitute a center, while 30-60 Village Organization (VO). VO is an association of poor,
centers represent a branch. Each center elects a chief landless people that come together with the assistance
from the groups’ chairpersons. Group members are of BRAC and try to improve their socio-economic
required to attend weekly center meetings conducted positions. In fact, VO is a platform for launching
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and implementing BRAC’s various activities. More promote the economic development of the country by
importantly, VO serve as forum where the poor can increasing the income level of the rural poor; operate
collectively address the principal structural and social self-sustaining credit activities. The lending mechanism
impediments to their development, receive credit, and is not rigid one, thus BRAC is still refining this holistic
open savings accounts and build on their social capital. "credit plus" approach. Actually, microfinance is only are
The main goal of VO is to strengthen the capacity of of the several components of BRAC’s Development
the poor for sustainable development and enable the approach. BRAC works through the VO in mobilizing,
poor to participate in the national development process. organizing all aspects their comprehensive approach to
Even, it uses VO members as a pressure group for development and poverty alleviation.
overdue collection from the default members of the VO.
Messages from the organization are communicated On the other hand, ASA approach is slightly distinct
to the groups through VO leaders. Along with group from GB and BRAC approaches. ASA group consists of
approach, BRAC is also adept in individual approach for 30-40 people. ASA approach is known as sustainable
providing credit facilities. BRAC’s microfinance staff and cost-effective microfinance model. The approach
meets VOs once a week to discuss and facilitate credit has proved effective in making a branch self-reliant
operations. The social development staff and health staff within 12 months. Any MFI that adopts this model for
meet VO members twice a month and once a month operations becomes sustainable within the shortest
respectively to discuss various socio-economic, legal possible time. The distinct features of ASA’s
and health issues. Credit decisions are taken in weekly operational mechanism are:
VO meetings. BRAC considers three things before ◎ Branch offices have no accountants. Accounting
considering a loan application: the member’s capacity and cash-handling is simplified, distributed between
to utilize the loan money, types of business, profitability the branch manager and the three or four loan officers,
of the Income Generating Activity (IGA)/business. and then subjected to a tight schedule of repeated
Formal loan proposal is prepared by the respective monitoring by senior staff at four different levels
program organizer (PO) then the accountant checks and stretching up to head office. Nor do they have guards:
verifies savings and credit records of the applicant by male staff lives on the branch premises.
using a computer. The loan proposal is forwarded to the ◎ Each branch prepares its own annual work plan with
manager at the same office for verification and approval fiscal targets and cash flow projection. After money
by the manager. At the branch office, the accountant comes in from daily collections (savings, insurance
disburses the loan after the manager interviews the premiums and loan installments), the branch calculates
borrower (Husain, 2007). BRAC’s main principles how much it needs for daily accounts or expenditures
of microfinance program are- make credit available and then deposits the rest in to the bank. The branch
to poor women, especially in rural areas; provide office can draw money whenever required. Even, money
credit at a reasonable price; involve poor women in may also come from other branches in the district,
income generating activities through credit provision; depending on their surplus.
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◎ Districts and regions have no support staff and simplified so that new recruits need only a few days of
no separate offices of their own. District and regional supervised work experience in a branch before being
managers is supervisory staff who shares a building and sending off to another one to start work. Head office
services with one or more branches. staffs are given no in-service training. Head office
◎ There is no training. No training cell, no training thinks, develops strategies and procedures sends
centre, no trainers. Work routines are standardized and manuals and instructions to the field.
Table 1 Key Features of GB, BRAC and ASA
Particular GB BRAC ASA
Group 5 members 30- 40 members 30-40 members
weekly meeting, information Weekly meeting, information Weekly meeting, information

Group function sharing and discussions sharing, legal aid and health sharing
issues
Loans Group and individual Group and individual Individual
Lending decision Area office Branch office Branch office up to certain level
After familiarity with “sixteenth Must be a VO member and need After saving 3 months a prescribed
decisions” application is to save regular basis, loan amount in ASA branch office
accepted and approved in the approve on the basis of the then ASA members are allowed
Approval Procedure center meeting, first provide borrower capacity to utilize the for a loan.
loans two members after 6 money, business type and the
weeks of repayment other profitability of IGAs
group members allow for loan
Liability Group and individual Group and individual Individual
Free, no group members are Collateral free, no legal Collateral free

Collateral responsible to pay on behalf of documents required
others
Service Door steps Door steps Door steps
Usually weekly in the center Usually weekly in the center Weekly in the center meeting;
meeting; solidarity group meeting, solidarity group Monthly for SEL and male loans,
works as a pressure group works as a pressure group first installment starts after 15
Repayment for ensuring repayment, in for ensuring repayment, in days and SEL 1 month; field
addition, field staff sometimes addition, field staff sometimes staff sometimes visit borrowers
visits borrowers house incase visit borrowers house incase of house incase of default
of default default
Interest rate Varies (10-15%) flat rate Varies (10-15%) flat rate Varies (10-15%) flat rate
Trained how to use the loans and Extensive training on occupational Training is absent, supervision
Supervision knowing 16 GB’s decisions skill development, supervise carried out in the borrower
borrowers enterprise enterprises
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9．Service Delivery the discussion is started from loan products.
Mechanism of the Major 10.1.1 GB loan products
Products GB’s loan program includes basic loan, housing loan,
higher education loan for member’s children, micro
There are four major kinds of financial services offered enterprise loan, loan for village phone, business loan
by Bangladeshi MSPs. These are loans, savings, death for graduate students of Grameen member families and
benefits or insurances and remittances. Bangladeshi loans for struggling members.
MSPs (i.e GB, BRAC and ASA) realizes that since the
poor do not constitute a homogenous group, one-size- Basic loan: Generally, basic loan is offered for one year
fit-all type of an approach with microfinance will not be term but there is flexibility from 3 months to 3 years. The
suitable for all categories of the poor. Thus, they have basic loan which includes all income generating loan
introduced different financial intervention according activities constitutes about 98 percent of the total loan
to the needs of different people living at different portfolio. This loan follows general lending methods of
poverty levels. The following section discusses different GB. The loan amount ranges from BTK 1000 to 5000.
products and services one by one i.e loan products, The interest rate is 10 percent (flat ).
saving products, insurances, remittances, education
and health. Housing loan for the poor: Grameen Bank found that the
poor needed to pay annually Tk 300-2000 (US$ 4-30）
10．Financial for repair of their thatched roofs. In fact, the house is not
only the shelter but also a place for income generating

intermediaries/services such as a store, a shop or a home factory for the poor.
10.1 Loan Products Responding to the needs of the poor, GB introduced
Micro-credit is the basic product for microfinance housing loan in 1984. It became a very attractive
activities. Hence, there are several sub-divisions within program for the borrowers. Maximum amount given for
micro-credit product. GB, BRAC and ASA have adopted housing loan is Tk 15,000 (US $ 218) to be repaid over a
seven, three and five kinds of micro-credit products period of 10 years in weekly installments. Interest rate is
respectively. As mentioned in previous section, every 8 per cent. A total amount of Tk 8.95 billion (US $ 210.38
MSP has developed new products according to different million) has been disbursed for housing loans end of
segment of people and is distinct from each other. Thus, July 2010.
6
Flat interest rate is calculated on the basis of principal amount that approved as loan; then the interest is added with principal amount and finally the total amount (principal + interest) is
subdivided by 46 installments for annual repayment. For example, if a client borrowsTk1000, she has to pays Tk 1,100 (principal amount Tk. 1,000+ interest Tk. 100) at 10% flat interest
rate.
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Micro-enterprise loans: Many borrowers are moving Loan for beggars: The struggling members program
ahead in businesses faster than others for many of GB is a very special program. It is an example of
favorable reasons, such as, proximity to the market, deepening financial inclusion and GB’s commitment to
presence of experienced male members in the family, social development. The objective of the program is to
etc. Grameen Bank provides larger loans, called micro- provide financial services to the beggars to help them
enterprise loans, for these fast moving members. There find a dignified livelihood send their children to schools
is no restriction on the loan size. A total of Tk 72.77 and graduate into becoming regular GB’s members.
billion (US$ 1080.26 million) has been disbursed under More than 112,216 beggars have joined this program
this category of loans (end of July 2010). Average loan and many of them already left begging. Basic features
size is Tk 26,976 (US $ 388.49), maximum loan taken of the struggling members program are- they make up
so far is Tk 1.6 million (US $ 23,209). This was used in their own rules, all loans are interest–free, loans can
purchasing a truck which is operated by the husband be for very long term, to make repayment installments
of a borrower. Power-tiller, irrigation pump, transport very small, inclusion of life insurance and loan insurance
vehicle, and river-craft for transportation and fishing are programs without paying any cost, groups and centers
popular items for micro-enterprise loans. are encouraged to become patrons of the beggar
members, struggling members are not required to give
Education Loans: Students who succeed in reaching up begging, but are encouraged to take up additional
the tertiary level of education are given higher education income-generating activities like selling popular
loans, covering tuition, maintenance and other school consumer items from door to door, or at the place of
expenses. By August 2010, 46,487 students received begging.
higher education loans, of them 44,152 students are
studying at various universities; 485 are studying 10.1.2 BRAC loan products
in medical schools, 787 are studying to become IGVGD: Income Generation for Vulnerable Group
engineers, 1063 are in other professional institutions. Development (IGVGD) program covers the poorest
Interest rate for education loan is 5% and is charged women who own no land, have little or no income, or
after graduation. are widowed or divorced. The objective of the IGVGD
program is to alleviate poverty of the hardcore poor
Loan for village phone: To-date Grameen Bank has by providing long-term sustainable income and
provided loans to 391,422 borrowers to buy mobile phones employment opportunities through food assistance,
and offer telecommunication services in nearly half of the training and access to credit facilities. In fact, the
villages of Bangladesh where this service never existed program is known as Challenging the Frontiers of
before. Telephone-ladies play an important role in the Poverty Reduction (CFPR) which was initiated in
telecommunication sector of the country, and also in 2002. In December 2009, 272,000 women received
generating revenue for Grameen Phone, the largest mobile a productive asset transfer worth between 8,000 and
telephone company in the country. 13,000 taka (between $112.94 and $183.54). In addition
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to the transfer, CRPR provides intensive training and affected by natural disasters and have used credit from
support in managing the assets; a daily stipend until the organization. The disaster credit helps the customer
income is generated from the assets (approximately contain economic erosion due to disaster. Credit amount
300 taka ($4.24) per month for approximately 18 is depending on the need. The loan is granted for one
months); subsidized health and legal services; social year term and the repayment method settles at the time
development training; water and sanitation; and the of credit disbursement. Even, the interest rate is also
development of supportive community networks through determined according to the need assessment.
Village Poverty Reduction Committees (Holmes and
Jones, 2010). The empirical study found (Das and PROGOTI (Microenterprise Loan): Started in 1996,
Farzana, 2010; Shina et. al. 2008; Halder, 2003) the this program aims generate income and create new
special investment program of CFPR had positive impact employment through enterprise development in the rural
on productive use of development funds for the benefit and semi-urban areas of Bangladesh. This is achieved
of ultra poor households in Bangladesh. Challenging the by providing credit facilities and technical assistance to
Frontiers of Poverty Reduction provides an innovative new and existing small businesses. PROGOTI borrowers
example of an asset transfer program. are required to open a bank account in order to receive
the loan. Loan sizes range from Tk. 50,000 - 500,000
DABI: DABI members are those who own up to one acre (US$ 700 to 7,000) with an interest rate of 15% flat and
of land (including homestead) and sell their manual monthly repayment.
labor to earn their living. Any BRAC village organization
member is eligible for DABI loan. Major types of credit 10.1.3 ASA Loan products
under the DABI programs include General Loans, Small loan for female clients: This loan is accounted for
Housing Loans and Disaster Loans. General Loans: 78% of total loan portfolio. Economically active poor to
ranges from Tk. 4,000 – Tk. 50,000 (US$ 50 – 500) undertake or strengthen income generating activities are
with a flat 15% interest rate. Loans are payable over one eligible for this loan. The loan ranges from BDT 10,000-
year through 46 weekly installments. The clients and 20,000 (US$ 150-300) depending on the economic
their representatives at the centre perform most of the potential of area and client’s capacity as well. It
roles and responsibilities with facilitation by the staff of offers weekly repayment having 15% interest rate (flat).
BRAC at the branch. Housing Loan: One of the effects of Second term loan increases depending on success of
having facilities for safe drinking water is the enhanced the previous loan.
buying capacity that helps members participates
in other types of credit also. This credit is similar to Hardcore poor Loan: This loan is accounted for 1% of
sanitation credit for the customers. The credit size is up total loan portfolio. A flexible loan product for hardcore/
to Tk. 10,000 payable over one year through 46 weekly ultra poor has initiated matching their irregular pattern
installments at a flat interest rate of 10%. Disaster Loan: of income generating activities. However, maximum
Disaster credit is given to those customers who are loan size is only 5000 (US$75). Loan is granted for 4-12
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IPRCC
months. Repayment is very flexible (monthly, quarterly children studying in 8th grade and above. Maximum
and half-yearly installments or at a time) settled at loan size is BDT 5000 (US$ 75). Repayment is made
the time of disbursement. Second term loan increases on weekly basis having 15% flat interest rate. Loan is
depending on success of the previous loan. granted for 12 months.
Small Business loan: The loan is accounted 12% of total 10.2 Saving Products
loan portfolio. A loan product is disbursed to informal or Saving is a part of income not consumed immediately
formal micro enterprises to promote production/enhance in favor of the future. At present, saving is an important
business activity and employment generation. Maximum part of the microfinance activities. Hence, the selected
loan size is BDT 50,000 or (US$ 735). Loan is granted for 1 MSPs offer several saving options for its clients and
year and repayment made on weekly or monthly basis. non-clients.
Small Entrepreneur Lending (SEL): The loan is GB has different kinds of savings products. These are-
accounted for 6.5% of total loan portfolio. Loan product compulsory saving: within compulsory savings there
is initiated for informal or formal small/micro enterprises are sub-divisions i.e emergency fund- contribution is
to promote production/enhance business activity and BDTk 5 per 1000 lent, children welfare fund- members
employment generation. This product also caters to required to pay BDTk 1 per week. The children’s
information technology related activities. Maximum loan welfare fund provides education for members’ children
size is BDT 700,000 (US$ 10,226). This loan is granted in schools managed and run by GB groups (Hasan
for 1-2 years having 15% flat interest rate. Repayment and Guerrero, 1997). Grameen Pension Savings: this
is made on monthly basis. scheme for GB members and staff; personal savings
and double in 7 years-term deposits: its open to all;
Agri-business Loan: This loan is accounted for 1.5% loan insurance savings: only for GB members; Fixed
of total loan portfolio. A loan product for supporting Deposit with monthly income: open to all. By the end of
agribusiness related activities. The maximum loan size August, 2010 total deposit in Grameen Bank stood at
is BDT 350,000 or US$ 5,113. The loan repayment, loan Tk. 93.89 billion (US$ 1352.11 million). Member deposit
term and interest rates are similar to SEL. constituted 53 per cent of the total deposits. Balance of
member deposits have increased at a monthly average
Rehabilitation Loan: A loan product for clients’ affected rate of 2.66 percent during the last 12 month (June 2009
by natural disasters e.g., flood, cyclone etc. Maximum to July 2010). The deposit rate varies from 8.5 per cent
loan size is BDT 2,000 or US$ 30. This loan is interest to 12 per cent.
free and the repayment is made on weekly or monthly
basis. Loan is granted for 12 months. Similarly, BRAC offers three kinds of savings-
Compulsory Savings: when members take loans, it is
Education Loan: A loan product to support clients’ mandatory to deposit 5% of the loan amount into their
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savings account. The interest rate for the savings is 2009). Grameen Bank introduced one of the earliest
6%. Normally borrowers can withdraw their savings insurance products in the sector, including health
anytime. Own Savings: members are required to save insurance through Grameen Kalyan. In case of death
a minimum of BDTk 5 (US$0.071) per week. Current of a GB’s borrower, all outstanding loans are paid off
Account Savings: BRAC has recently introduced current under loan insurance program. Under this program, an
account savings that bear no interest but allow the insurance fund is created by the interest generated in a
group members to make unlimited withdrawals. savings account created by deposits of the borrowers
made for loan insurance purpose, at the time of receiving
ASA also offers three kinds of savings- mandatory loans. Coverage of the loan insurance program has also
savings: clients belonging to basic loan category except been extended to the husbands with additional deposits
SEL and Agri Business loan are required to deposit a in the loan insurance deposit account. A borrower can
fixed amount minimum deposit rate in BDT 10 (US$ get the outstanding amount of loan paid off by insurance
0.15). Clients can withdraw anytime but need to keep 5% if her husband dies. She can continue to borrow as if
equivalent of loan (principal) as balance. Interest rate she has paid off the loan. The families of the deceased
on savings is re-arranged in every year on the basis of borrowers are not be required to pay off their debt
bank rate. Voluntary Savings: The term and conditions burden any more, because the insured borrowers or
are similar to mandatory savings. But, it is optional for their insured husbands do not leave behind any debt
clients. Long Term Savings: any client can participate burden to take care of. Life Insurance: Borrowers are not
in this product. This is monthly an installment based required to pay any premium for this life insurance. Each
deposit with fixed return usually higher than regular family receives BDTk 1,500 (US$21.5). A total of 128,818
savings but close to fixed rate of return. Minimum borrowers died so far in Grameen Bank. Their families
deposit rate is BDTk 50/ 100/ 200/ 300/ 400/ 500 per collectively received a total amount of Tk 227.34 million
month. Deposit term is 5 and 10 years. The deposit rate (US$ 4.54 million).
is 9% for 5 years duration while it is 12% for 10 years
duration at maturity. Clients can withdraw any time Similar to GB, BRAC has introduced a death benefit
before maturity but with lower rate of return. policy for its VO members beginning in 1990. BRAC
partnered with the market leader in insurance, namely
10.3 Insurance Products Delta Insurance to offer life insurance. The product
Microfinance service providers are gradually becoming offers TK 10000 (US$ 150) to the family in case of death
interested in offering insurance products. MSPs over of a member to cover funeral expenses and contribute
the years have offered various kinds of insurance to the repayment of remaining liabilities. Members do
products like health insurance, life insurance, credit not have to pay a regular premium for the life insurance
insurance, property insurance and crop insurance but facility. The key features of BRAC’s insurance policy
have experienced difficulties in attracting clients and are- any poor woman when she becomes a VO member
maintaining the sustainability of the product (MIFA, is eligible for this benefit. BRAC’s insurance service
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provides Tk.10,000 (US$150) to the dependants of the remittances in the rural areas. It is easy for BRAC to
deceased, no premium is charged to the members. provide remittance services through its large networks.
BRAC pays the money to the family from the interest At first BRAC enlists migrant worker families through
earned through its credit program. survey and register their names who are interested
to receive their remittance through BRAC and BRAC
ASA has not lagged behind to offer insurance to its Bank. The registration fee is Tk.100 (US$1.5). Once
clients. ASA has four kinds of insurance benefits. Loan the formalities are finished, the receiver is requested
Insurance: Any client can participate in this product; to inform the sender(s) to remit through Western Union
an installment based deposit with fixed return usually through BRAC Bank. Similarly, ASA has started foreign
higher than regular savings but close to fixed rate of remittance with National Bank Limited jointly since July
return. Premium is in each loan cycle BDTk 10 (US$.15) 2008 with a view to facilitating increased remittance
per thousand loan disbursement. Non-refundable but inflow through the banking channel to Bangladesh. More
in case of death of borrower or borrower’s spouse, the than 700 branches have been brought under remittance
total outstanding loan is written off. Member’s Security service until December 2009 (ASA, 2009).
Fund (Mini Life Insurance): All basic loan clients must
contribute and participate in this product. Premium is There are some other MSPs, BURO Bangladesh and
BDTk.10 (US$ 0.15) per week but BDTk 10 (US$ 0.15) Thengamara Mahila Sabuj Sangha (TMSS) have been
per month for Hardcore Poor Loan. Refundable with 4% involved in countrywide internal money transfer (INAFI,
interest but 6 times the amount of balance paid in case 2007). However, GB has yet not started remittance
of eight years maturity. Male Member’s Security Fund services. Grameen Bank, had sought permission
(Mini Life Insurance): Spouse or family head of female from Bangladesh Bank for taking part in remittance
clients’ may participate in this product. Premium rate is transfer and utilization. Bangladesh Bank was favorably
similar to member’s security fund BDTk 10 (US$ 0.15) disposed to this idea but till now it is under consideration
per week. Refundable with 2% interest but 3 times the to amend GB’s ordinance in the parliament Non-
amount of balance paid for four years term. Financial Services (Siddiqui, 2004).
10.4 Remittance 10.5 Training Products

In order to serve migrant workers and their families Training is considered the key instrument towards
abroad, Bangladeshi MSPs are now offering money successful microfinance interventions. Hence, GB and
transfer services in collaboration with commercial BRAC have been providing training services while
banks and money transfer companies such as Western ASA has no such services. Grameen Bank pays high
Union. BRAC is involved in remittance transfer process. priority to educating and training its bank personnel and
BRAC Bank Ltd has agreement with Western Union borrowers. The goal of the training is to build committed
for remittance transfers in Bangladesh. BRAC Bank is bank employees who work in accordance with the
using the microfinance network of BRAC for transferring bank’s philosophy. Prospective branch managers
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are trained for six months--five months extensive development practitioners working within and outside
fieldwork practice in a branch office, and 4 weeks in- Bangladesh. A well-known feature of BRAC training
class study. Trainees learn about banking procedures is its participatory nature, which is learner-centered,
such as loan processing, deposit-banking, record problem focused and need-oriented. It promotes
keeping, and accounts maintenance. This exercise individual involvement in the training process and group
orients the bank worker to the poverty of rural life and interaction. The training courses are designed and
how the poor perceive the bank (MacIsaac and Wahid, delivered from the perspective of the participants’
1993). Meanwhile, group of borrowers participate in a needs. The courses are continuously upgraded to meet
training of at least seven days to learn about the GB’s the evolving needs of the BRAC programs. At present
philosophy, banking rules and procedures, business there are 21Training and Resource Centers (TARCs),
skills, the responsibilities of the group chairperson, three rented training centers and two BRAC Centers
“Sixteen Decisions” and the group savings program. for Development Management (BCDMs) that operate
They are also taught about health, children’s year-round training courses facilitated by experienced
education, other social development programs, and how trainers. Some of the training programs and courses
to sign their names (Hossain, 1993). After participating are - In house training, vocational training, training for
training program each group attends weekly meetings. the community leader. The training courses include-
When the group demonstrates familiarity with the rules Gender awareness and analysis; gender and social
and regulations, formal status is granted. Loans are change; gender and reproductive health; gender and
given to two members first after successful repayment HIV/AIDS; gender and rights.
(following two months) other group member are allowed
for loans (Jansen and James, 1998). The training Surprisingly, ASA does not have any kind of training
program of GB is focused on loan procedures and rules programs. So, it has no training cell, no training center
primarily. and no trainers. Work routines are standardized and
simplified so that new recruits need only a few days of
BRAC has adopted extensive training activities not supervised work experience in a branch before being
only for its staff and clients but also for outsiders. sent off to another one to start work. Head office staff is
The BRAC Training Division (BTD) is responsible for given no in-service training.
capacity building and professional development of
BRAC staff and program participants through a wide 10.6 Education Products
range of training and exposure initiatives. Leadership, Bangladesh government has provided free education
management skills development and occupational for girls (up to grade 12) and boys (up to grade 5).
skills for microfinance program participants are also However, greater portions are unable to complete
remarkable. The broad objective of BRAC training is the their education as they are either forced to drop out in
enhancement of knowledge, skills and attitudes of the order to seek employment to supplement household
program participants and staff as well as other external income, or drop out because they do not have the
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sufficient support to perform (Rahman, 2010; Hasan diseases and common ailments. The health program
and Guerrero, 1997). Concerning the issue, MSPs came is a combination of preventive, curative, rehabilitative
forward by establishing schools and supplementary and promotional health services that have proven
services. Accordingly, GB encourages borrowers to effective in the past. Building on the experience of
establish schools, pre-schools and day-care services past successes, the health program has evolved and
to tutor members’ children while they are engaged responded to emerge national health problems and
in their business activities. Furthermore, GB school scaled up former pilot projects. It engages 80,000
system also provides member families with a full Community Health Volunteers called Shastho Shebikas
program of elementary education. Meanwhile, BRAC who are members of the VO, trained to provide health
has accomplished education program for children education, sell essential health commodities, treat basic
different groups of people. These includenon-formal ailments, collect basic health information and refer
primary education programs for traditionally outside patients to health centers when necessary (Gain, 2010).
formal schooling, support to formal schools, education BRAC comprehensive health care program reaches to
for ethnic children and education for adolescents (no. 14.5 million people. Tuberculosis (TB) control program
of adolescent center is 8,868). Even, there is an option reaches 88.5 million people (Brac annual report, 2009).
for higher education (BRAC University). BRAC’s has About 4 million pregnant women have received anti-
2195 rural community based libraries (Gonokendras), of natal care from BRAC. BRAC provided essential health
which about 1085 are equipped with computers that are services include- health and nutrition education;
connected to the Internet and 8,016 Kishori Kendras that water, sanitation and Hygiene (WASH); family planning;
give members access to a variety of reading materials immunization; pregnancy-related care; basic curative
(Brac annual report, 2009). On the other hand, ASA has services; and tuberculosis control. Taking an example
education loan program for clients’ children and higher of WASH program, BRAC started Water, Sanitation and
education institute (ASA University). Hygiene (WASH) program in 2006 in partnership with
the government. Program goal is to provide sustainable
10.7 Health Products and integrated WASH services in the rural areas and
A few MSPs have included health support programs to break the contamination cycle of unsanitary latrines,
ensure the wellbeing of clients and their families. Among contaminated water and unsafe hygiene practices, as
others GB and BRAC are notable ones. At the very well as ensure sustainability and scaling-up of WASH
beginning, ASA also had health program for its clients. services. In this program number of latrines installed
BRAC has very extensive health programs. From its or repaired were 5 million and the participants in the
founding days, healthcare interventions have been an cluster meeting was 61.5 million (Brac annual report,
integral aspect of BRAC’s holistic and rights based 2009). In some areas, it includes additional activities
approach. The two major objectives of the BRAC health such as services for presbyopia, pneumonia, malaria
program are to improve maternal, neonatal and child and promotion of safe delivery practices. It also
health, and to reduce vulnerability to communicable collaborates with national programs such as Vitamin-A
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IPRCC
supplementation and family planning. of MSP giants such as ASA and small MSPs (MIRB,
2009). PKSF has helped various small MSPs to achieve
Beside above mentioned products and services there high levels of operational efficiency whereby they can
are other several products including family planning enhance their financial self-sufficiency and leverage
and welfare, agriculture and related activities, water funds from the commercial banking sector in future.
supply and sanitation, human rights and advocacy, However, over the years, external donor grants have
legal aid, women entrepreneur development, research declined in a significant pace (from 30.4% in 1997 to
and evaluation division (only BRAC has independent 7.9% in 2005). It is worth to mention that the declining
research cell) and so on. donor grant does not affect the microfinance sector as
much. For instance, GB and ASA do not accept any
grants or donations from outside sources since 1998

11．Financial Strength and 2001 respectively but they are enjoying financial
Bangladeshi MSPs are most self-sufficient in Asia self-sufficiency status. While BRAC has increased
particularly the larger ones. They are financially 73% self-sufficiency and only 27 depends on donor
sustainable because, they can accumulate funds from grants. However, these grants are only for children’s
diverse sources i.e, local banks, wholesale fund from education, right based services and health programs.
Polli Kormo Shyakak Foundation (PKSF), international No grants are now taken for microfinance activities.
donor grants, savings/deposit of members, interest Microfinance in BRAC is self financed (Santen, 2009).
or service charges. Hence, ASA was the first MSP to
attract loans at market rates of interest from commercial Nevertheless, the financial strength of Grameen Bank,
banks (Agroni and Sonali Bank). In fact, PKSF has been BRAC and ASA have been assessed on the basis of
playing a greater role to making MSP financially self- Return on Equity (ROE), Operational Self-sufficiency
sufficient. As an apex institution, PKSF has been working (OSS) and Financial Self-sufficiency (FSS) overtime
as both financial intermediary and market developer and (see annex 2 & 3 for more details). Operational Self-
continues to be an institution central in the Bangladeshi sufficiency refers to the ability of the institutions to
microfinance landscape (Bedson, 2009). PKSF was generate enough revenue to cover its operating costs
established in 1991 by the Government of Bangladesh while Financial Self-Sufficiency (FSS) refers to the
for refinancing the NGOs providing micro-credit institution's dependence (or lack of it) on subsidies
services to the poor in rural areas. PKSF was refinanced for successful operation (Murdoch Dec 1999). Table
by government funds as well as funds from the World 2 reveals that Return on Equity was 5.64%, 4.73%
Bank to continue to meet the growing financing needs 3.57% for GB, BRAC and ASA respectively in 2009.
of the sector. Accordingly, most of the large MSPs have The Operational Self-Sufficiency was 102.6%, 105%
established their scale of operations and achieved and 140.27% for GB, BRAC and ASA respectively.
financial self-sufficiency through their collaboration with Meanwhile, Financial Self-Sufficiency for GB (99.21%),
PKSF. It is regarded that PKSF is part of the success BRAC (111.48%) and ASA (110.63%) which is definitely
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indicate their financial strength. Following three figures from figure(s) ROE, OSS and FSS have significantly
(Fig-3, Fig-4 and Fig-5) shows the ROE, OSS and contributed towards sustainability of GB, BRAC and
FSS of GB, BRAC and ASA last five years. It appears ASA’s microfinance program.
Particular GB BRAC ASA
Disbursement (in million dollar) 1151.00 565.69 898.39
Outstanding (in million dollar) 792.00 655.28 457.60
Repayment rate (%) 97.00 99.47 99.64
Return on Equity (ROE %) 5.64 4.73 3.57
Operational Self Sufficiency (OSS %) 102.63 105.00 140.27
Financial Self-Sufficiency （FSS） 99.21 111.48 110.63
Savings (in million dollar) 1205.95 268.59 68.45
Net profit (in million dollar) 5.38
GB
40 GB 300
BRAC
BRAC 250
30 ASA
percent (%)
Percent (%)
ASA 200
20 150
10 100
50
0
0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Year Year
Figure-3 ROE of GB, BRAC and ASA during 2005-2009 Figure-4 OSS of GB, BRAC and ASA during 2005-2009
GB
200 BRAC
ASA
150
Percent (%)
100
50
0
2005 2006 2007 2008 2009
Year
Figure-5 FSS of GB, BRAC and ASA during 2005-2009
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IPRCC
12．Regulatory Status grants to re-build the nation. Accordingly, government
and non-government organizations worked hand in
Some kind of regulation is necessary as microfinance hand to restoring livelihoods of the people through
sector grows rapidly and deals with money and income generating activities (MIRB, 2009). Initially the
more importantly poor people’s money. Usually, it government and individual social leaders (later NGO)
is the government role to promulgate regulations for embarked on relief and rehabilitation works. Gradually
microfinance sector as government is responsible the NGOs earned a space and the government
to keep safe citizen right and their money. However, created a space for NGOs to take part in nation
many MSPs have developed a code of conduct that building programs. That is how the NGOs became
imposed self-regulation on them. Whatever the form of more development organization. NGO-MFIs have
regulation, there should be a concrete regulation which vastly widened their activities as social and economic
can ensure the interest of the poor and the organizations empowerment of the poor.
as well. Realizing the matter, over 50 countries have
implemented or are considering specific arrangements With the rapid expansion of NGO-MFIs activities and
for regulation and supervision of microfinance either as increasing inflow of external resources, the government
a separate law or as amendments to the existing legal was concerned with transparency and accountability.
and regulatory framework in world (Mohanty, 2010). Responding to the need, government created the
Accordingly, Bangladesh is moving toward building NGO Affairs Bureau (NGOAB) in 1991. NGOAB’s
concrete microfinance regulations by a separated activity spectra entails the areas like- NGO registration,
regulatory authority. approval of project proposals, releasing funds and
monitoring NGO projects, etc. NGOAB played the
Nevertheless, the establishment of separate regulatory role of the primary regulator of the development
authority was not an easy task as Bangladesh MSPs NGO-MFIs supported by foreign funds, providing
were mostly self-regulated. Hence, MSPs have enjoyed microfinance services in the country. In real sense,
lots of freedom working with government or individually MSPs remained “unregulated” until established
for rebuilding the nation. Actually, Bangladesh evolved Microcredit Regulatory Authority Act 2006 with the
as an independent nation in 1971 after 9 moths of initiative of Bangladesh Bank (the central Bank of
Independence War. In this war, a huge destruction was Bangladesh) after extensiveconsultation with NGO and
made and several intellectuals and scholars were killed bank leaders. MRA’s responsibilities are to provide/
by Pakistani army. The government received donor cancel licenses and monitor MFIs performance for
7
The Bangladesh Bank in coordination with NGOAB and in consultation with the microfinance NGOs represented by GB, BRAC, CDF and PKSF have established the Microfinance
Regulatory Authority and created the Micro Credit Regulatory Authority Act 2006.
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strengthening a sustainable financial market. The installment, negotiations between lenders and
minimum criteria of obtaining license are- either borrowers, for a longer gap, have been allowed
minimum balance of outstanding loan at field level ◎ Mandatory to allow at least 50 weeks time for
BDTk four million or minimum borrower 1,000. The act recovering entire amounts of general loans which are
emerged after reviewing several previous Acts including issued for a period of one year
Societies Registration Act 1860 (the same as in India), ◎ MSP must calculate rates of interest on loans in
Cooperative Credit Society Act 1904, Companies Act declining balance method, in place of the existing flat
1913, Trusts Act 1882, Charitable and Religious Trust rate method
Act 1920 and Cooperative Societies Ordinance 1984 ◎ MSP must have a specific pay structure, which must
(MIRB, 2009). According to MRA recent report there be sent to the authorities.
are 503 NGO-MFIs been registered/ licensed out of
4240 applied for. The remaining MSPs are under review It is noted that GB, BRAC and ASA have registered from
process for registration. MRA held an international MRA along with other NGO-MFIs. In addition, they have
conference on Microfinance Regulations: Who benefits? adopted self-regulatory mechanism in their respective
during 16-17 March, 2010 to have world experience organizations.
regarding microfinance regulations (MRA, 2010). In
addition, MRA has conducted another participatory

13．Reasons for Successes
conference among MSPs for settling most debatable
issue i. e. interest rate and deposit collection (MRA, a. Lending Mechanism: The group lending with
2010, Khan, 2010). Recently, MRA has announced a individual responsibility mechanism is often
guideline for NGO and MFIs in a circular issue on 10 presented as the key factor of MSPs success.
November, 2010. The key guidelines are: Hence, GB, BRAC and ASA have continuously
◎ The maximum effective interest on loans must be 27 improved their group lending approaches overtime.
percent At present, they are providing individual loans
◎ MSPs must pay at least 6 percent interest on along-with group lending.
mandatory weekly savings of borrowers b. Responsible borrowers: Combination of joint liability
◎ NGO-MFIs can be charged maximum Tk 15 for loan is considered as vital to high repayment rates. But,
application forms, client admission fee, passbooks, etc. this is not only the reason of joint liability but also hard
◎ No deduction of money from loans should be allowed working of the field officers and responsible borrowers
at the time of loan issuance, in the name of savings, particularly the women. Hence, poor has proven to
insurance, or any other category. be better repays. It is because of people’s sincerity,
◎ For micro-enterprise loans, the stamps fee must be honesty, hard works and responsible behavior.
Tk 50 c. Learning from women: MSPs are good listener of
◎ Mandatory to allow at least a 15-day gap between poor voice especially women. Accordingly, MSPs have
the dates of loan issuance and first repayment designed and re-designed several innovative products
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IPRCC
after listening from women. within a village. Hence, forming a solidarity group is
d. Trust: Most of the MSPs had started their activities as difficult but not as much in Bangladesh. MSP conveys
effective distribution of relief funds in cash and kinds. It the vision and mission to the villagers and may start their
is regarded that MSPs are more efficient in respect to microfinance activities without any severe difficulties.
service delivery to the rural community. Hence, MSPs i. Product diversification: MSPs are allowed to offer
have achieved certain degree of faith to the community diverse products and services (savings, insurance,
or society. For example, BRAC community development remittance, social development etc.) particularly
programs i.e health, education, social awareness has the savings/deposit has contributed to improve the
contributed a lot and satisfied people’s mind. So, the economies of scale.
MSPs have been using their past trust for expanding j. Fund availability: Bangladeshi MSPs have received
their existing programs in a successful manner. significant amount of donor grants and soft loans which
e. Women active participation: Women have proven improve their scale of business. Meanwhile, Bangladesh
their entrepreneurship and business skills for utilizing Bank and commercial banks are offering soft loans
and repaying loans. By doing so, they are contributing to the MSPs. In addition, PKSF is working closely with
toward changing existing social system (male dominant MSPs by providing financial and technical assistance.
society) in Bangladesh. Meanwhile, their active So, the combination of this supportive environment
participation in microfinance activities has extended the facilitated financial self-sufficiency of a good number of
business opportunity of MSPs. MSPs.
f. Demand push: The people are really poor with many k. Attitude to repay loan: The high successful
needs in Bangladesh. Hence, loans are very need repayment rate by the borrowers have attracted
oriented towards improvement of their livelihood. financial intermediaries. They have seen business i.e
g. Collateral: Collateral free and simple loan approval microfinance.
process of MSPs (GB, BRAC and ASA) has triggered l. Friendly relation between borrowers and loan officers:
the success. In Bangladesh, formal financial institutes Microfinance is a loan program with a human face. It is
are inefficient and less popular due to their complex a relationship building between the borrowers and the
procedures, collateral requirement, favoritism to better staff/organization. Accordingly, microfinance sector has
off people and claim for bribes. More importantly, realized the importance of human relationship and is
the NGO type MFIs offer services to the door steps trying to maintain it in a meaningful way.
of the clients while formal banks offer services from m. Positive relation between government and MSPs:
their offices which might be a good reason for greater MSPs have earned government faith with their hard
participation in microfinance program. works, proper systems and commitment to improving
h. Group formation: Bangladesh is most densely people’s livelihood especially the women. Thus,
populated (1046 person per square km.) country in the government has less intervened microfinance
world. Each and every village consist huge number of market which leveled to rapid growth of this sector in
population. Usually, there is a negligible heterogeneity Bangladesh.
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n. Decentralization: Strong decentralization combined ◎ In Bangladesh, there is a competition among
with extensive information and communication system microfinance service providers particularly key players
is also a reason for success. The specific organizational so products keep improving. In addition, government
structure makes good management and transparency of has also several collaborative programs in certain
GB, BRAC and ASA. direction towards poverty reduction. The government
has gained full points for poverty reduction with proper
14．Learning/lesson from policies and guidelines.
◎ The service delivery mechanism of GB, BRAC and

GB, BRAC and ASA ASA can be applied to other developing countries with
The most remarkable lesson can be learned from GB, adaptation.
BRAC and ASA’s microfinance approaches that the ◎ Microfinance is not simple. It needs professionalism,
organization can work so successfully in the villages systems, dedicated works and a comprehensive
even in slum areas of the poorest countries in the world. approach building relations with the people.
It is regarded that a poor country (like Bangladesh) can ◎ People have performed in their respective role to
develop its own way to poverty alleviation. Some specific make the microfinance sector successful.
learning points are:
◎ Credit access to poor is a very important and vital
part of any social and economic development of the

15．Future Challenges
poor. Definitely, innovation of collateral free group In Bangladesh, significant successes have been
lending by GB, BRAC and further development by ASA achieved by large MSPs in respect to innovative
others have shown success in Bangladesh and some approaches, diversified products and services, financial
other parts in the world. strengths and improving regulatory environment.
◎ MSPs have reached the poor very productively and However, the microfinance sector is not out of future
with a sense of concern and belief in the strengths of the challenges. Some of them are-
poor especially women. ◎ Beside success of large MSPs, a vast majority
◎ The credit plus-plus approach has benefited more small MSPs are not able to move efficiently towards
and has considered more applicable towards poverty commercialization, due to lack of adequate human,
alleviation. financial and technical resources.
◎ It is proven by GB, BRAC and ASA that poor can ◎ MSPs always used higher repayment as indicator of
utilize loans and repay them if effective procedures and success. However, there is obligation that loan officers
relationships are maintained and established. may use their superior status to pressure clients to pay
◎ Decentralize organizational pattern of GB and BRAC the weekly meetings, sometimes using techniques that
combined with extensive information and communication come close to social collateral.
systems are lessons for other development partners/ ◎ It is regarded that microfinance is an effective tool
organizations. towards poverty alleviation. However, the question remains
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whether such an approach is comprehensive to poverty approach has widely been replicated in many developed
alleviation if there is limited connection in production, and developing countries in the world. These include-
infrastructure and market development process. China, India, Pakistan, Sri Lanka, African countries, USA,
◎ It is not an easy task to determine the impact of Canada and Germany, has been applying the approach
poverty alleviation of such microfinance programs according to their country’s suitability. Meanwhile,
in Bangladesh. In fact, simultaneous programs BRAC approach has adopted 9 developing countries
have been implemented by government and other in Asia and Africa. Interestingly, BRAC experience is
development partners. So, it is the combination impact being used effectively in Afghanistan for livelihood
of th development intervention by MSPs, development improvement. BRAC is recognized as the largest private
organization and government. development partners in Afghanistan (DFID, 2010).
◎ Despite supervisory mechanism (provide enterprise ASA’s cost effective microfinance approach has been
skill trainings and guidance for utilizing loans) for adopted several developing countries (7 countries).
disbursing loans, there is concern about unproductive
use of loans. China’s most of microfinance service providers
◎ About 3000 MSPs have been operating in Bangladesh have been using GB plus something of their own
at local, regional and national level. These micro-credit kind of approach suiting to their own environment.
suppliers provide credit without taking care of previous ASA international is trying to get access in China’s
lending history (whether she receives loans from other financial market (Koppes, 2008). Thus, before
MFIs or not). Thus, there is a concerning trend of multi- adapting microfinance approach in a certain country
loans of borrowers which fell them difficulties to repay the approach need to be well understood and some
and create over-indebtness. flexibility is adopted according to the particular socio-
◎ Despite flexible initiative in recent years, there cultural background.
remains concern of exclusion of the poorest and
remote areas in Bangladesh. It is reported by PKSF
that the coverage of micro-credit operations is absent

17．Conclusion
in the more remote and less populous districts of the Livelihood improvement of poor people is not an easy
country’s north and southwest part. task. However, Grameen Bank, BRAC and ASA along
with other MSPs have been able to demonstrate the
Criticisms are good as long as they are constructive. effectiveness of microfinance towards sustainable
Leading to further improvement of approaches of adapted. development for the rural poor in Bangladesh. It is
regarded that microfinance success could not be
achieved without active participation of the Bangladeshi

16．Applicability people particularly the women. The credit culture,
Bangladeshi MSP has proven their applicability in many discipline, and commitment towards maintaining regular
developing countries. For instance, Grameen Bank repayment and compliance with microfinance provider
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IPRCC
norms are noticeable. In addition, the innovation of Finally, the Government liberal policy to MSP and
alternative way to financing the poor and continuous establishment of PKSF has led to rapid expansion of
efforts to develop new products and services have led microfinance sector in Bangladesh. PKSF remains a
to this success. More importantly, the effective and reliable source of refinancing for the MSP particularly
efficiency management skills, innovative approach and the small MSP. On the other hand, Microfinance
decentralized institutional patterns are also remarkable. Regulatory Authority (MRA) is trying to establish a
Accordingly, country has recognized as a successful balance microfinance sector by protecting client interest
case of microfinance sector. and service provider interest as well. The recent MRA
circular on ceiling effective interest rate along with other
In Bangladesh, MSPs have been promoting guidelines can be considered a first step to build the
development access to the poor for improving their sector in a formal regulatory framework.
socio-economic conditions. More specifically,
microfinance activities have empowered rural poor Acknowledgement: The authors express thanks to
people especially the women to accomplish economic Dr. Cheng Enjiang for his constructive and valuable
achievements. In the development process, MSPs are comments.
offering several loan products considering the needs
of different stratum of the people. The supplementary
services (savings, training, remittance, legal awareness,
education and health) have reduced the vulnerability of
the poor. More importantly, the service delivery systems
and decentralized management systems have had
greater contribution to bring Bangladeshi microfinance
sector to this stage.
Typical GB, BRAC and ASA offer small loans to poor
people who are deprived of access to credit offered
by regular private banks. Lack of material collaterals
has been dealt with through the introduction of "social
collateral." GB and BRAC give individual loans to
villagers in groups of five, forty, and hold the group
jointly is liable for repayment. This group mechanism
creates peer social pressure and solidarity, which
seems to work well in a society where social networks
are often of vital importance. Meanwhile, ASA offers only
individual loans consists 30-40 members in a group.
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Annexure
Annex 1 Financial portfolio of Grameen Bank in the last 5 years
Item 2005 2006 2007 2008 2009
No. Branch offices 1735 2319 2481 2539 2562
Loan disbursed (in million US$) 612.00 727.00 731.00 906.00 1151.00
Outstanding (in million US$) 427.00 476.00 530.00 646.00 792.00
Current performing loan(in million US$) 416.00 463.00 509.00 623.00 757.00
Overdue loan(in million US$) 7.28 8.51 14.91 17.99 20.82
Portfolio growth rate (%) 39.66 18.32 9.26 22.22 23.20
Return on Equity (ROE %) 21.22 25.83 1.79 21.21 5.64
Operational self sufficiency (OSS %) 115.65 117.41 101.02 112.20 102.63
Financial Self sufficiency (FSS %) 110.40 112.28 94.84 106.07 99.21
Cost per borrower (US$) 8.27 7.78 8.87 10.29 12.89
Net Profit (in million US$) 15.20 20.00 1.56 18.99 5.38
Portfolio at risk ratio (PAR %) 2.57 2.69 3.88 3.67 4.39
Capital adequacy ratio (%) 13.41 14.38 12.43 12.02 10.65
Savings (in million US$) 482.92 634.27 758.92 940.09 1205.95
Source: Grameen Bank annual report, 2006, 2007, 2008 and 2009
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Annex 2 Financial portfolio of BRAC microfinance program in the last 5 years
Item 2005 2006 2007 2008 2009
Disbursement (in million US$) 501.00 627.00 917.00 - 1,104.83
Loan loss provision - 7.78 15.42 23.01 -
Savings (in million US$) 141.00 156.00 198.00 231.00 268.59
Return on Equity (ROE %) 14.00 27.00 23.11 24.44 29.60
Operational self-sufficiency (OSS %) 119.60 107.00 96.58 106.00 105.00
Financial Self-Sufficiency (FSS%) 119.63 119.48 103.60 107.00 111.48
Assets in Microfinance program - 324.00 489.00 608.66 696.93
Source: Annual report 2006, 2007, 2008 and 2009
Annex 3 Financial portfolio of ASA in the last 5 years
Item 2005 2006 2007 2008 2009
No. of Branch office 2931 3333 3303 3236
Disbursement (in million US$) 479.45 598.72 705.57 892.09 898.39
Current Loan (in million US$) 301.23 358.03 466.79 440.80
Recovery rate (%) 99.88 99.85 99.77 99.59 99.64
Portfolio at risk (%) 1.22 1.85 3.40 5.00 4.67
Loan loss ratio (%) 0.14 0.23 0.27 0.45 0.97
Return on Equity (%) 19.66 16.42 8.88 3.80 3.57
Operational sustainability (%) 275.24 238.16 175.51 143.61 140.27
Financial Sustainability (%) 169.73 155.20 121.44 114.33 110.63
Savings (in million) - 3521.00 4604.00 6433.00 8145.00
Conversion rate 69.00 69.00 68.56 68.50 68.45
Source: ASA annual report- 2006, 2007, 2008 and 2009
３３
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The Synthesis of Grameen Bank, BRAC and ASA Microﬁnance Approaches in

Article · February 2011

Wakilur Rahman Salehuddin Ahmed

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T he paper describes the operational mechanism/institutional innovation of key Microfinance Service

microfinance approaches in Bangladesh and can think or re-think for adaptation.

Keywords: Bangladesh, Microfinance approach, Grameen Bank, BRAC and ASA

1．Introduction tremendous success in developing innovative

micro-credit models, service diversification, financial

have developed and improved a good number of Finance Corporation (IFC).

original methodologies and defied conventional

and extensive social services to the poor while ASA

management systems etc. a credit delivery system to provide banking services

targeted at the rural poor. In that time, rural poor was

investment, and more income). The project’s success

was implemented in other parts of the country with the

Advancement Committee (BRAC) and Association government. Accordingly, it became a community

rehabilitation organization to a development organization. generation activities. In this stage, empowerment

issue only but a multidimensional issue needing multi-

faceted integrated approaches. Therefore, BRAC is

not an MFI, it is a development organization. Thus,

From a similar background, ASA was established in

of horizontal growth and decentralization of power,

level is responsible for monitoring all programs

The governing body consists of highly distinguished

central office and the branch office in the field. Branch

offices can be considered as center of activities. Branch

offices are independent cost and profit centers. All

members program exclusively for the beggars which

maintaining sustainability? There are two different

Figure 1 Outreach of different financial intermediaries in pyramid

education schemes for member’s children and social

-both upstream and downstream -that maximizes

benefits to the poor (Spainhower, 2010). Taking an

example from BRAC dairy and food project, the project

Thus banking is conducted openly in front of all

a group of five like-minded friends. This is to ensure

but also to the group as a whole.

BRAC forms group consist 30-40 people is known as

overdue collection from the default members of the VO.

income generating activities through credit provision; depending on their surplus.

Table 1 Key Features of GB, BRAC and ASA

Particular GB BRAC ASA

Group 5 members 30- 40 members 30-40 members

weekly meeting, information Weekly meeting, information Weekly meeting, information

Loans Group and individual Group and individual Individual

Liability Group and individual Group and individual Individual

Free, no group members are Collateral free, no legal Collateral free

Service Door steps Door steps Door steps

Mechanism of the Major 10.1.1 GB loan products

Products GB’s loan program includes basic loan, housing loan,

higher education loan for member’s children, micro

benefits or insurances and remittances. Bangladeshi loans for struggling members.

saving products, insurances, remittances, education

poor needed to pay annually Tk 300-2000 (US$ 4-30）

only the shelter but also a place for income generating

10.1 Loan Products Responding to the needs of the poor, GB introduced