brac microfinance insitution

BRAC (Bangladesh Rural Advancement Committee) Mr. Fazal Hasan Abed Presented by Tata-Dhan Academy PDM 11 Pashupati Pandey Shanti Gupta :

BRAC (Bangladesh Rural Advancement Committee) Mr. Fazal Hasan Abed Presented by Tata- Dhan Academy PDM 11 Pashupati Pandey Shanti Gupta

BRAC: An overview:

BRAC: An overview Inception in 1972 with rehabilitation of displaced people after Bangladesh announced as an independent country. In mid 1972 BRAC was set up as a national private development organization by Mr. Fazle Hasan Abed. By mid 70s, BRAC realized that more long term, sustained effort was needed for change the lives of the poor. The focus shifted from rehabilitation to development, and BRAC was renamed to stand for Bangladesh Rural Advancement Committee

Vision and Mission statement:

Vision and Mission statement Vision A world free from all forms of exploitation and discrimination where everyone has the opportunity to realize their potential. Mission To empower people and communities in situations of poverty, illiteracy, disease and social injustice. Our interventions aim to achieve large scale, positive changes through economic and social programmes that enable women and men to realize their potential.

BRAC’s Programs:

BRAC’s Programs BRAC Development Program (BDP) BRAC Education Program (BEP) Health, Nutrition & Population Program (HNPP) BRAC Training Division (BTD) Research and Evaluation Division (RED) Support Programs and Enterprises Other related institutions: BRAC University, BRAC Bank

BRAC’s Development Program:

BRAC’s Development Program Microfinance Agriculture and food security Education Health Water, Sanitation and Hygiene Advocacy and Human Rights Disaster, Environment and Climate change Enterprises

BRAC’s Outreach :

BRAC’s Outreach Population 110 million out of 147 million Districts 64 out of 64 Staff Distribution 4.5% (head office) 95.5% (field)

Microfinance:

Microfinance Microfinance began in 1974 and cover all 64 districts. We provide access to financial services to the poor, who are unable to obtain credit from mainstream banks due to lack of necessary . Target population are most of the women People these loans to engage in various income generating activities to improve their socio-economic status.

Financial Products :

Financial Products Credit √ General Loan √ Loan for income generating projects √ Housing Loan √ Enterprise Loan Savings Death Benefit

Features of loan product:

Features of loan product Micro Loans √ Lending through group formation, namely Village Organizations (VO) √ Loan Range: Tk.1,000 to 50,000 (US$15 to $700 ) √ Repayment through equal weekly installments - Micro Enterprise Loans Individual Lending between Tk 50,000 to Tk 300,000 (US$700 to $4,500) √ Repayment through monthly installments √ Service charge: 12.5% (Flat) √ Emergency loans are also given at the time of disaster

Components of BRAC Microfinance Program:

Components of BRAC Microfinance Program Group Based Products Poverty Alleviation Employment and Livelihood for Adolescents Economic Development Individual Products Micro Enterprise Loans Women Entrepreneur Development Program Microfinance for the Extreme Poor Challenging the Frontiers of Poverty Reduction –Targeting the Ultra Poor (CFPR-TUP) Income Generation for Vulnerable Group Development (IGVGD) – Collaborating with the government and WFP

Impact of microfinance:

Impact of microfinance Number of Village Organisations increased to 295,507, with a total membership of over 8 million Over USD 1 billion in microloans was disbursed to more than 6 million active borrowers Members’ savings increased by 15%, to USD 269 million

Challenges:

Challenges T he adverse impacts of climate change. On the one hand, floods and cyclones, now occurring with increasing frequency, directly affected the lives and livelihoods of our members, thereby restricting their ability to repay loans on time and accumulate savings. Changing climactic patterns have led to a larger migrant population, providing access to financial services for whom has become extremely challenging owing to the increase in risk.

Opportunities :

Opportunities There are significant opportunities for greater innovation, particularly in developing new loan and deposit products for microfinance clients. In 2010, the Microfinance Programme will develop, test and launch several new products. Moreover, the potential use of new technology will also provide new opportunities for the Microfinance Programme to offer new products and services to our members as well as increase operational efficiency of our programm

Agriculture and Food Security:

Agriculture and Food Security The overall approach of our Agriculture programme is to increase Crop production while ensuring environmental sustainability, Adaptability to climate change and affordability for marginal and small farmers.

Impact in agriculture:

Impact in agriculture BRAC research had3 new varieties of hybrid rice - HB 9, Shakti 2, and Aloron 2 Over 5, 500 metric tons of our high quality seeds were marketed through commercial distributors Our work in Cyclone Sidr -affected areas showed that: the proportion of individuals reporting that they could eat three meals a day increased from 55% in 2008 to 70% in 2009

Contd…:

Contd … Hybrid rice farming demonstrations in the coastal areas showed the potential of three fold increase in productivity and four-fold increase in profits compared to farmers’ current practices. BRAC has mobilised a USD 75 million refinancing facility from the Bangladesh Bank to take credit and extension service to tenant farmers (sharecroppers)

Education :

Education Primary school Adolescent Primary Schools that have higher entry ages (11–14) Education for Ethnic Children (EEC) BRAC started the EEC initiative in 2001 to adapt Bengali materials and develop teaching methods for ethnic children. Local teachers explain lessons in their native languages alongside Bengali.

Impact of education program:

Impact of education program Success in National Examinations 97% of our students passed first-ever standardised test for primary completion ( shomaponi ) Helping Improve the Quality of Education 3 mathematics textbooks for grades 6–8 approved by the National Curriculum & Textbook Board ICT for Education 15 schools get government support for introduction of Computer Aided Learning

Contd..:

Contd.. Mentoring for Leadership 9,993 selected students in grades 6–9 received peer mentoring to develop self-esteem, creativity and leadership Reaching the Marginalised 3 story books in Chakma language developed for pre-primary for grade 2 Promoting Inclusive Education Special sports, cultural and income-earning initiatives introduced for the economic and social independence of children with special needs Empowering Adolescent Girls -Members of adolescent clubs performed on a TV talent show, ‘ Nache Gane Number One’

Health:

Health Essential Health Care 100 million people covered in all 64 districts of Bangladesh Healthcare for the Ultra Poor 249,500 families covered in 40 districts 126,836 patients received health subsidy Tuberculosis Control 86 million people covered in 42 districts Reading Glasses 5 million covered in 5 districts

Governing body:

Governing body Our Governing Body consists of highly distinguished professionals, activists and entrepreneurs who bring their diverse skills and experiences to the governance of BRAC. The Governing Body is assisted by an Audit committee that reviews the financial condition of the organisation in order to recommend appropriate remedial action

Annual Expenditure:

Annual Expenditure

Microfinance revolving loan fund:

Microfinance revolving loan fund

Expense and donor funding:

Expense and donor funding year Amount in millions USD % Donor contribution 1980 0.78 100 1985 2.3 97 1990 21.25 68.2 1995 63.73 54 2000 152 21 2005 259 24 2009 460 30

Assets contribution:

Assets contribution ASSETS US $ % contribution Cash in hand and at banks 5,42,04,359 5.44 Term deposits 13,08,15,811 13.12 Advance,deposits and prepayments 2,16,02,716 2.17 Grants and a/c receivable 2,13,04,807 2.14 Inventories 2,62,53,125 2.63 Motor cycle loans 1,09,88,225 1.10 Loans to VO members 57,74,34,280 57.93 Investments in securities 19,57,664 0.20 Investments in related undertakings 7,02,86,852 7.05 Property and equipment 8,18,78,668 8.21 TOTAL ASSETS 99,67,26,508 100.00

Liabilities:

Liabilities Liabilities amount in USD % contribution Deferred income 47,94,120 0.67 Term loans 25,16,75,403 35.25 VO members savings deposits 26,85,92,966 37.62 Securitised financin 67,49,786 0.95 Other long term liabilities 6,62,33,901 9.28 VO members project & current account 2,20,808 0.03 Grants received in advance account 2,09,70,918 2.94 Other current liabilities 2,68,44,300 3.76 Provision for taxation 40,72,132 0.57 Bank overdrafts 6,38,00,411 8.94 Total Liabilities 71,39,54,744 100.00

Expenses Details:

Expenses Details Expenses Heads Amounnt in USD % of total expenditure Income Generating Projects 5,98,98,178 13.98 Program Support Enterprises 4,13,08,064 9.64 House property related expenses 11,33,525 0.26 Education Programme 5,98,98,178 13.98 Challenging the Frontiers of Poverty Reduction Programme 4,19,94,517 9.80 Health and Population Programme 4,49,38,363 10.49 Micro Finance Programme 15,37,91,973 35.90

Contd……:

Contd …… Expenses Heads Amounnt in USD % of total expenditure Relief and Rehabilitation 1,44,76,027 3.38 Poultry & Livestock Extension Programme 3,04,217 0.07 Fisheries Extension Programme 4,03,115 0.09 Agriculture & Sericulture Extension Programme 9,67,491 0.23 Livelihood Development Programme 48,61,850 1.13 Grants to BRAC University 1,27,007 0.03 Research, Monitoring and Evaluation 13,45,440 0.31 Total expenses 42,84,11,737 99.31

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