Poverty alleviation and Micro-credit Programs/Projects Bangladesh Krishi Bank was established under BKB Order`1973 with the objective of strengthening rural economy by extending credit support to agricultural and agro-based sectors. In consideration of the importance of Micro-Credit and with the objective of generating employment as well as encouraging social development BKB has undertaken several Micro-Credit programs of its own and also in collaboration with local and foreign agencies. The programs have been designed to cover all segments of poor population whether skilled or unskilled such as small and marginal farmers, landless labourers, destitute women, disabled, unemployed youth and rural artisans etc. About 1417047 beneficiaries have been provided with Tk. 14469.90 million since its inception (upto 30 September,2008). Considering the needs of the target groups since late seventy`s BKB has been implementing a series of Micro-Credit programs out of which 10 programs have recently been completed and 31 programs are in operation at present. These diversified micro-credit programs are being implemented by BKB to achieve the following objectives:
- To create employment opportunities through income generating activities.
- To empower the rural women to establish their own rights.
- To improve the living standard of the rural people.
- To alleviate poverty of the poor people.
- To make easy access to institutional credit facilities and resources.
- To mobilize rural savings.
- To make optimum utilization of rural resources.
- To engage inactive human resources of the rural areas in productive/economic activities.
- To engage rural people in development process of the country.
- To eliminate exploitation done by the money lenders.
A Salient feature of BKB`s on going Micro-Credit Programs under poverty alleviation is given below:
Credit program for the landless and Marginal Farmers:
This program has been launched with BKB`s own fund in 1992-93 financial year through its all branches. Landless and marginal farmers get short term credit under this program. Persons/ Peasants having not more than 1.50 acres of cultivable land and annual income of highest Tk 25000/- are eligible for getting credit under this program. After formation of groups and obtaining training the group members get credit without any collateral security. But they have to hypothecate the goods and assets created by the loan. In lieu of collateral they have to take responsibility as guarantor for the recovery of loan within the group. The present Interest rate is 10%. 52 equal weekly installments are fixed and the recovery will be taken place accordingly. About 474181beneficiaries have been provided with Tk. 4698.40 million since its inception (upto 30 September,2008).
Beef fattening Joint Program:
This is a bank`s own financed program. Bank launched this program in 1994. The main objective of this program is to fill up the deficiency of animal protein in the country as well as creation of selfemployment for poor and unemployed people living in the villages. Under this program a person can get a loan amounting upto Tk.25000/- for 5 calves against guarantee of a bank official / local elite. The rate of interest is 10%. The loan is to be repaid with interest in one installment within one year. About 89025 beneficiaries have been provided with Tk.1481.30 million since its inception (upto 30 September,2008).
Swanirvar Credit Program:
Bank has been implementing swanirvar credit program without collateral security since 1979. Employment creation for the landless and marginal farmers, increasing their standard of living, creation of social and ethical values, eradication of illiteracy, providing creation of health and family planning services etc are the objectives of this program .The beneficiaries under the program are landless, rural poor & destitute having maximum 0.40 acres of cultivable land and maximum annual income is Tk.20,000/-. 212 branches of 31 districts (regions) are involved in this program. The beneficiaries have to form groups (each Consisting 5 members) and a center (consisting 5 groups). BKB & Swanirvar Bangladesh is operating this program jointly. The credit is collateral free but Group guarantee for each other is needed. Maximum loan amount is TK.15,000/- per beneficiary. It is Short term credit(to be recovered in 52 equal weekly installments within one year). Disbursement of loans to the beneficiaries is made duly recommended by Swanirvar staffs. Swanirvar Bangladesh is responsible for group formation ,giving training to the beneficiaries and recovery of loan. Rate of Interest is 16%. (6% Service charge for Swarnivar, 10% Interest for BKB). About 274115 beneficiaries have been provided with Tk.1577.80 million since its inception (upto 30 September,2008).
Small Farmers & landless Labourers Development Project (SFDP):
This project is being implemented jointly by BARD & BKB from 1995 through 21 branches under 6 Regions (districts) of Bangladesh Krishi Bank. The objectives of the project are to increase production, employment creation and increase income of the small landless farmers & labourers through formation of small groups, generation of own capital and provision for capital support for undertaking various income generating activities. Under this project Tk. 19.80 million has been disbursed to 2710 beneficiaries on average per year and recovered Tk. 15.80 million per year. Cumulative recovery rate is 97%. The beneficiaries under this program are small farmers having maximum 0.50 acres of cultivable land & landless labourers having 0.51-1.50 acres of cultivable land. Selection of target family, group formation, supervision of group activities, supervision of loan utilization and all kinds of field works are done by BARD. Opening of group account, sanctioning and disbursement of loan & maintaining savings account etc. are done by BKB. Bank provides credit from its own source after formation 5-10 members group. The loan is collateral free, but assets and goods derived from credit are hypothecated. Lien of group savings & group pressure replace the collateral. Loan is disbursed for any recognized items which is accepted by bank & identified by members of group. Interest rate is 15% of which 10% for BKB, 5% for BARD. Chairman or secretary of the group recovers the loan. Loan is recovered in weekly/fortnightly/monthly installments within maximum 18 months. About 28266 beneficiaries have been provided with Tk.215.20 million since its inception (upto 30 September,2008). This program terminated on 30 th June,2006.
South Asia Poverty Alleviation Program:
This program was launched on the basis of Dhaka conference of SAARC countries in 1993. This is a joint venture program with UNDP. But it is banks own financed program. UNDP organizes the beneficiaries, trains them and recommends the loan. The responsibility of credit realization lies with the managers of village organizations. This is an area based credit program. Only Kishorganj ( a district) sadar upazilla is the command area of this program. The maximum credit limit is Tk. 25000/- per beneficiary. 25 beneficiaries form a group. Rate of interest is 15% (BKB 10% and the manager of village organization 5%).The loan is collateral free and is recovered in weekly installments within one year. About 53723 beneficiaries have been provided with Tk.445.70 million since its inception (upto 30 September, 2008).
United Nations Capital Development Fund(UNCDF):
This program started in 1983 with the objective of financing rural & cottage industries. Now it is running on revolving fund. This is a joint venture program with BKB, BSCIC & UNCDF. UNCDF provides one third of fund while BKB provides two thirds. BSCIC selects borrower and provides extension services. The program covers 29 districts. BKB provides credit from joint fund and maintains account. Rate of interest is 10% – 14%. This is a collateral free credit. Raw materials, finished goods and capital asset created out of credit are kept as hypothecation against credit provided to the beneficiaries. About 24837 beneficiaries have been provided with Tk.136.70 million since its inception (upto 30 September,2008).
Rural Women Employment Creation Project ADB Loan No 1067 BAN(SF):
This is a joint project started in 1993 for experimenting with the idea of co-participation of government Organizations (GOs) and Non-Government Organizations (NGOs) aiming at employment creation for poor women in the rural areas. Department of women Affairs (DWA), 19 NGO`s in 12 thanas (upa-zilla) and BKB jointly implementing the project. NGOs organizes individuals into groups, train them under the supervision of DWA and recommends for credit funded by ADB. This is also a collateral free credit. Interest rate is 12%. About 67402 beneficiaries have been provided with Tk.154.70 million since its inception (upto 30 September 2008). This program terminated on 30 th June,2007.
BKB-NGO Micro Credit Program:
This program is a replication of Rural Women Employment Creation Project (RWECP).NGOs organizes individuals into groups, provides them training and recommends for credit . BKB provides credit from its own fund. This is also a collateral free credit. Interest rate is 12.5% . About 16636 beneficiaries have been provided with Tk. 136.00 million since its inception (upto 30 September 2008).
Credit Under National Poverty Alleviation Program through Goat Rearing:
This program have been introduced in 2002 aiming to eradicate poverty through goat rearing. Directorate of livestock provides with extension service while BKB provides credit from its own fund for a period of 4 years term. This is a collateral free credit provided from all branches of BKB. Interest rate is 10% . About 24354 beneficiaries have been provided with Tk. 236.50 million since its inception (upto 30 September 2008).
Milching Cow Credit Program for the Women:
The program launched in the year 1997. The main objectives of the program were proper utilization of the unemployed women increasing milk production and helping the up-lift of the condition of the women folk. Under this program one village of a branch area is selected. One women from each family of the selected village is eligible to get this credit facility. An applicant gets maximum Tk. 10,000/- to purchase a calf. Interest rate is 8%. The loan is realized within one year in weekly installments. This is a collateral free supervised credit. An officer or field worker of the branch is engaged in supervising the credit under the direct control of the branch manager. Livestock officers help the beneficiaries in treatment and rearing the cow. About 612 beneficiaries have been provided with Tk. 8.20 million since its inception (upto 30 September 2008).
Special Micro Credit Program for the Disabled:
This program have been introduced in 2002 aiming to income generation & development of socio-economic condition through employment creation for the disabled persons. Department of Social Welfare and Disabled Foundation provides extension services. This is a collateral free credit provided from all branches of the bank. Interest rate is 10%. About 530 beneficiaries have been provided with Tk. 5.60 million since its inception (upto 30 September 2008).
Monipuri Small Traders Credit Program:
This program have been introduced in 2003 aiming to provide working capital to handloom industry operated by the Monipuri women living in the greater Sylhet areas. Bank officials organizes the Monipuri women having handloom and training/education/experience of operation. Eligible women are organized into 5 member groups. This is also a collateral free credit provided from the bank`s own fund. Interest rate is 10% . About 684 beneficiaries have been provided with Tk.21.50 million since its inception (upto 30 September 2008).
Special Credit Program for the Rakhains under the district of Cox`s Bazar:
This program has been launched in 2003 aiming to provide working capital credit for producing handloom and cottage Industrial products and marketing. The loan is disbursed to the Rakhain community living in the district of Cox`s Bazar. Bank officials organizes Rakhains into 5 member groups. This is a collateral free credit programme from banks own fund. Interest rate is 10% . About 469 beneficiaries have been provided with Tk. 15.10 million since its inception (upto 30 September 2008).
Tree Plantation Programs: In 2002 and 2003 BKB has launched 8 Tree Plantation Programs-viz:
- All types of tree nursery including herbal
- Horticulture Development
- Fruit and forest tree plantation
- Bamboo production
- Herbal gardening
- Coconut gardening
- Patipata (a plant used in making mat) production
- Cane production
These programs have been introduced in all branches of the bank to grow more and more trees aiming to eradication of poverty, proper use of fallen land, increase of tree production facilitating herbal treatment and development of environment. Credit under these programs is collateral free upto Tk. 25,000/-. Interest rate is 8%. About 20043 beneficiaries have been provided with Tk 203.50 million since its inception (upto 30 September 2008).
Establishment of Breeding Farm of Black Bengal Goat Program:
This program has been taken to ensure supply of kids of Black Bengal Goats in order to support the national program of poverty alleviation through goat rearing. Under this program a farm comprising 50 she goats is considered as a small farm and a farm comprising 51-200 she goats is considered as a big farm. The loan is medium term. Credit limit is Tk. 30,000/- for a small farm consisting of 10 she goats ( with a he- goat). This credit limit is calculated for making up goat-shed, purchasing of she-goats & he-goat and initial feed cost. This limit is proportionated for a small farm having upto 50 number of she-goats. For a medium farm credit limit is to be calculated deducting the cost of goat shed. This cost is borne by the entrepreneur. About 304 beneficiaries have been provided with Tk 14.60 million since its inception (upto 30 September 2008).
Community Based Resource Management Project:
This project started in 2003-04 fiscal year. It is a joint venture project of BKB, IFAD and Dept. of LGED of GOB. The project is to be implemented in all of the 10 upa-zillas of Sunamgonj (a district) at 3 phases within 11 years. The project has five components such as: (1) Infra -structure Development, (ii) Development of Fisheries, (iii) Crop and livestock Development, (iv) Grass Roots Institutional Development and (v) Small Credit Bangladesh Krishi Bank deals with “small credit“ component of the project. LGED organizes the target people into 30 member groups. Bank Provides short and medium term loan. Maximum loan limit is Tk. 14,000/- to each member as short term and Tk. 27,000/- to each member as Medium term. The loan under this project is collateral free. Rate of interest is 15%. 1508 credit organization (each credit organization consists of maximum 30 beneficiaries) have been provided with Tk 190.35 million since its inception (upto 30 September 2008).
Poverty Alleviation through Production and Improvement of Sheep:
This is a government directed program which has been launched in the last part of the fiscal year 2004-05. Primarily this is to be implemented throughout the selected 22 upazillas under selected 11 districts of BKB`s jurisdiction. Directorate of livestock provides with extensive services while BKB provides credit from its own fund. Under this program credit amount upto taka 50,000/- is collateral free. Interest rate is 8%. This loan is to be repaid within four years in 6 equal installments including one year grace period. About 360 beneficiaries have been provided with Tk 3.80 million since its inception (upto 30 September 2008).