Day 4

 

Session 1:

Field Visit on BRAC Microfinance Programme

 

Facilitator: Mr. A. Rahman

 

The participants went to visit the BRAC’s microfinance programme at Kapasia, Gazipur. Participants left the hotel lobby at around 8:00 a.m. and visited the different development activities of BRAC. They stayed there up to 2.30 p.m., discussed with villagers, BRAC group members, observed group activities – who meeting is organized, how savings is collected, how loan is distributed, etc. They also tried to understand how BRAC’s development programme, especially the microfinance programme produced impacts to the livelihood of its group member. Participants visited different income generating activities operating by the group member, especially by the women.

 

After the field visit, the training session resumed again at 4 p.m. when they enjoyed the experience sharing on ASA’s microfinance programme.

 

 

Session 2:

Experience Sharing on ASA’s Microfinance Programme

 

Resource Person: Mr. Mostaq Ahmed Ph. D, Deputy General Manager- Information, ASA

 

Course coordinator introduced the resource person giving his background and portfolio he looks after in ASA.

 

The Resource Person informed participants that he would talk about lending methodology and product development.

 

ASA’s Branches and Coverage

 

As of date, ASA has 1,200 braches through which it is reaching 2.2 million clients. 19 other countries in the world also follow ASA model for their MF programme.

 

Who are people living in the rural and urban areas?

 

76% are living in rural areas and 24% are living in the urban areas.

 

On what elements of the borrowers the NGOs are emphasized?

 

Unlike bank or other financial sector the MF sector does not emphasize on the financial capability of the borrowers, rather it emphasizes on human and moral factor.

 

What are the basic factors of MF programme?

 

The resource persons mentioned that the following three things are the basic elements in MF programme.

 

§         Human quality

§         Moral

§         Trust

 

Based on these basic elements the group guarantee in a group has developed and this is the basic foundation of microfinance programme. Compare to men, the women are more credit worthy. Women are usually more sensitive and sincere, as a result preference was given to the women and let them to have a greater access to the MF and this makes the MF successful. However this is not the only cause for giving preference to the women. They are comparatively more vulnerable and oppressed than men in our society and this is for why they are getting preferential treatment in MF programme.

 

What is the key feature of ASA?

 

He acknowledged that the most MF programme in Bangladesh and around the world originated based on Grameen approach. Accordingly ASA’s MF also originated from the GB approach. But over the period of starting ASA’s MF programme, it learnt many lessons and accordingly developed its MF programme according to its own way. In this stage he showed a comparison between GB and ASA’s model.

 

He also explained that ASA also experimented whether microlending is possible without group guarantee. Based on some experiment on this issue, finally ASA was convinced that it could work without group guarantee. Then questions came from the audience saying that ASA’s is not committed to build institutions of the poor, its relation with poor is just as patron – client relationship. In this regard, the resource person responded saying that ASA believes 

 

Most important feature of ASA’s credit?

 

Only 1 credit in 1 family in a year, no more credit to that family. However, after repaying all the entire 46 instalments a borrower can receive 2nd loan.

 

 

 

 

How to characterize ASA’s MF programme?

 

The resource person mentioned the following few point with example in favour of the characteristics of ASA’s MF programme.

 

§         Individual lending methodology

§         Innovative and simple

§         Self-reliant

§         Cost effective

§         Sustainable

 

How does ASA Work?

 

Mobilization

 

Area selection:

 

Availability of a sufficient number of poor people (at least 1,200 people)

 

Client selection

 

Physically capable and one women and men member per family and is not affiliated with nay other lending institution.

 

Client Mobilization

 

Group size for collection center ranges from 25-30 and meets weekly. Male and female group remain separate.

 

Savings policy

 

Mandatory Savings - deposit weekly Tk. 10-20.

Voluntary Savings – as much as they can and allowed to withdrew anytime.

 

Credit Policy

 

Lending Time

 

§         Client must save regularly for 4 weeks and attend the group meeting to qualify for first loan.

 

§         Usually a client gets subsequent loans on the same day at noon after full repayment of the previous loan in the morning.

 

Types of Loans

 

Small Credit: Tk. 4,000 – 6,000, every year increases by Tk. 1,000 – 2,000

 

Small Business Loans: Tk. 10,000 – 20,000

 

Loan Term and Mode of Repayment

 

Loans are given for 1 year period and repayable in equal weekly instalments.

 

Use of ASA’s loans by the borrowers

 

Insurance:

 

Deposit Tk.5 per thousand of principal loan amount for each loan cycle.

 

In case of borrower’s death loan balance can be adjusted or the amount equivalent to the

He then explained the financial status of the ASA and status of some financial ration as of date.

 

Questions and Answers on the Presentation

 

How much have you done about client preference?

 

There are a little amount of research on client preference. ASA works with its own strategy and don’t believe on designing its products based on others preference.

 

How your repayment is possible if your borrowers investment their loan in agriculture?

 

Our member does not invest all loans to any single enterprise. So they have other short earning

 

If the asset is lost on which the borrowers invested the loan, how you collect the loan?

 

§         We sanction another loan

§         Provide grace period

 

What are the tools you use to calculate your recovery rate in such a quick fashion?

 

Decentralization and delegation of all functions to the branch level make it possible to produce the data so quickly.

 

How your savings grow such high if your savings is open and voluntary?

 

Because ASA has another savings product, which is mandatory, and group members do not withdrew this savings unless they are in very bad situation.

 

Finally the session on ASA’s presentation concluded here with thanks to the resource person.

 

 

 

Small changes in the schedule

 

Before conclusion of the day’s session, the course coordination briefed the participants on small changes in the schedule.

 

 

Group work on field visit

 

Next, the participants worked in two small groups to prepare a presentation for tomorrow on the their lessons learned from the field visit. Finally the 4th day’s session was closed with thanks to the participants.