Rural poverty in Bangladesh

Bangladesh is one of the worlds poorest countries, ranking third after India and China in the extent of poverty. The population is predominantly rural, with about 85 per cent of its 135 million people living in rural areas. For their livelihoods rural people depend mainly on the land, which is both fertile and extremely vulnerable. Most of the country is made up of flood plain, and while the alluvial soil provides good arable land, large areas are at risk because of frequent floods and cyclones, which take lives and destroy crops, livestock and property. Since the 1990s the country has made good progress towards reducing the incidence of poverty, achieving a 1 per cent drop in the proportion of people living below the poverty line every year. Estimates of rural poverty rates now stand between 53 per cent and 43.6 per cent. In general the depth and severity of poverty has been reduced more successfully in rural zones than in urban areas, although rural zones still lag far behind urban areas in terms of development. Who are the rural poor? About 20 per cent of rural households live in extreme poverty. Chronically poor people suffer persistent food insecurity, own no cultivable land or assets, are often illiterate and may also suffer serious illnesses or disabilities. Another 29 per cent of the rural population is considered moderately poor. They may own a small plot of land and some livestock, but while they generally have enough to eat, their diets lack protein and other nutritional elements. This segment of the rural population is at risk of sliding deeper into poverty as a result of health problems or natural disasters. Injury or crop failure caused by unexpected and severe weather conditions frequently ruins the livelihoods and the hopes of many Bangladeshis. Small-scale farmers may subsist at either of these levels of poverty. Their livelihoods are precarious, both because of the seasonal nature of farm income and because natural disasters such as floods and drought may periodically destroy their crops and animals. Women are among the poorest of the rural poor, especially when they are the sole heads of their households, such as widows or wives of men who have migrated in search of employment. They suffer discrimination because of their gender, they have scarce income-earning opportunities and their nutritional intake is often inadequate. Among extremely poor people, there is a disproportionate number of households headed by women. Fishing communities are also among the poorest and most disadvantaged groups in the country. Where are they? Aside from hilly areas in the extreme north-east and south-east, Bangladesh is made up entirely of low-lying deltaic flood plain. Poverty is concentrated in three areas: the

north-west, which is prone to drought and river erosion; the centre-north, which is subject to severe seasonal flooding that limits crop production; and the southern coastal zones, which are affected by soil salinity. The direct link between chronic poverty and unfavourable agricultural environments is becoming increasingly apparent, partly as the result of difficult climatic conditions and partly as a consequence of mismanagement of natural resources and the enormous population pressure on the land. Why are they poor? One of the main causes of rural poverty in Bangladesh is the erratic and extreme climate and the fact that a large proportion of the country is low-lying and vulnerable to flooding. Many of Bangladesh 's rural poor people live in areas subject to extreme annual flooding, which can destroy their crops, homes and livelihoods. They often have to resort to moneylenders in order to rebuild their lives, which pushes them deeper into poverty. For the large numbers of rural poor people whose subsistence depends on agriculture, income and food security are highly precarious. Many farmers eke out a livelihood on small and fragmented plots. For those who are landless or almost landless, the situation is even more severe. Almost half of the population falls into this category. Another root cause of rural poverty has been the enormous population growth and the pressure this has placed on the environment, unleashing problems such as erosion and flooding that in turn aggravate the situation of rural poor people. Bangladesh has made progress in developing rural infrastructure, but much remains to be done. Many poor people living in remote areas lack services such as education, health clinics and adequate roads, particularly road links to markets. Only 19 per cent of rural households have electricity

Grameen Bank and Grameen Trust The Grameen family of organizations has grown beyond Grameen Bank into a multifaceted group of profitable and non-profit ventures, established by Dr. Muhammad Yunus, the Nobel Peace Prize winning founder of Grameen Bank. Most of these organizations have central offices at the Grameen Bank Complex in Mirpur, Dhaka, Bangladesh. The Grameen Bank started to diversify in the late 1980s when it started attending to unutilized or underutilized fishing ponds, as well as irrigation pumps like deep tubewells.[1] In 1989, these diversified interests started growing into separate organizations, as the fisheries project became Grameen Fisheries Foundation and the irrigation project became Grameen Krishi Foundation.[1] These ventures include Social Advancement Fund (SAF), Grameen Trust, Grameen Fund, Grameen Communications, Grameen Shakti (Grameen Energy), Grameen Telecom, Grameen Shikkha (Grameen Education), Grameen Mothsho Foundation, Grameen Krishi Foundation, Grameen Baybosa Bikash (Grameen Business

Development), Grameenphone, Grameen Software Limited, Grameen CyberNet Limited, Gonoshasthaya Grameen Textile Mills Limited, Grameen Capital Management Limited, Grameen Knitwear Limited, Grameen Mutual Fund One, Grameen Kalyan (Grameen Well-being), Grameen Shamogree (Grameen Products), Grameen Danone Foods (joint venture with Groupe Danone) and Grameen Uddog (Grameen Enterprise, owner of the brand Grameen Check).[2][3]

Contents
[hide]

1 Grameen Bank 2 Grameen Trust 3 Grameen Fund 4 Grameen Telecom 5 Grameenphone 6 Grameen Solutions Limited 7 Grameen Communications 8 Grameen Fisheries and Livestock Foundation 9 Grameen Shakti 10 Grameen Shikkha 11 Grameen Byabosa Bikash 12 Grameen Danone Foods 13 Grameen America 14 References 15 External links

The Grameen Bank is a microfinance organization and community development bank started in Bangladesh that makes small loans (known as microcredit) to the impoverished without requiring collateral. The system is based on the idea that the poor have skills that are under-utilized. The bank also accepts deposits, provides other services, and runs several development-oriented businesses including fabric, telephone and energy companies. The organization and its founder, Muhammad Yunus, were jointly awarded the Nobel Peace Prize in 2006.[4]

Grameen Trust (GT), a non-profit and non-government organisation established in 1989 uses microcredit as a tool for fighting poverty and follows the Grameen Bank approach for the purpose. It supports and promotes poverty focused microcredit programs all over the world under its Grameen Bank Replication Program (GBRP) through a number of ways - dialogue programs for potential replicators, training and technical assistance to

replication projects, funding selected projects, and monitoring performance.[3][5] Grameen Trust funds are provided in two forms - seed capital and scaling up fund.[6] As of August 2007, it has provided support to 138 replication partners in 37 countries of the world. Under the Build, Operate and Transfer (BOT) program, the Trust directly implements the projects to respond to the need for immediate and rapid implementation of poverty focused microfinance programs. Grameen Trust hosts the Grameen Global Network (GGN) and publishes the Grameen Dialogue newsletter to promote the cause of microcredit movement.[5] To implement the replication program, it received funds from the MacArthur Foundation, United Nations Capital Development Fund (UNCDF), Deutsche Gesellschaft fr Technische Zusammenarbeit (German Technical Cooperation or GTZ), United States Agency for International Development (USAID), United Nations High Commissioner for Refugees (UNHCR), United Nations Office for Project Services (UNOPS), the Citigroup Foundation, the World Bank and Ford Foundation.[6]

Social Business
Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way. The impact of the business on people or environment, rather the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goal/s Types of Social Businesses Type I: focuses on businesses dealing with social objectives only. Eg. The product produced is for the benefit of the poor. Type II: can take up any profitable business so long as it is owned by the poor and the disadvantaged, who can gain through receiving direct dividends or by some indirect benefits.

Seven Principles of Social Business

Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization Financial and economic sustainability Investors get back their investment amount only. No dividend is given beyond investment money When investment amount is paid back, company profit stays with the company for expansion and improvement Environmentally conscious Workforce gets market wage with better working conditions ...do it with joy

Why Work for an NGO?

Working for an NGO is a vocation. It is a calling. Most people who are most blessed in life love to work in this field. It is in this field wherein you can see the difference in working with the business employment sector and a nonprofit sector. It is very much known that if you are working on NGOs you tend to place the concerns and needs for others above your own. You want to give the heritage to your love ones that in time of suffering you are one of the people who has opened arms help those less fortunate. It is in this Organization that one can be able to bring the worth and meaning to people. Working in this kind of organization gives you an opportunity to assist other people and help boost their lifestyles to a more comfortable level. We have different perspective in life, and so goes with the different reasons why one might enjoy working in a NGO with a not so attractive remuneration but a good sense of purpose.

Objectives

To support and promote GB type programs to reduce poverty. To offer training and techical assistance to national and international organizations to support GB replication initiatives. To publish materials aimed at disseminating information about Grameen Bank Replication Programs (GBRP) and drawing the attention of all concerned to the deep rooted problems of poverty. To build an international network of concerned people and institutions working in the field of poverty alleviation. To conduct research and undertake and/or encourage experimentation to find ways to bring about socio-econonic changes in the lives of the poor. To promote and operate health and sanitation services for the benefit of the poor. To organize and operate any project or enterprise that will help increase employment, income and management skills of the poor.

Grameen Trust usually supports microcredit programs in collaboration with local organizations interested in implementing such programs following GBA. However, in special circumstances, GT directly implement the microcredit program without any intermediary organization, following its "Build, Operate and Transfer (BOT)", and "Build, Operate and Own (BOO)" Model. BOTs and BOOs are set up in countries with difficult situations where GT has no partner organizations to support. GT identifies suitable branch locations, recruits staff, and begins microcredit operations in the chosen country. Currently GT has fourteen (14) BOT and BOO projects in thirteen (13) countries. A consolidated table on the latest performance of BOT and BOO projects are given below : Grameen America Inc. (GAI) In 2007, Grameen Trust launched a microfinance program through Grameen America Inc (GAI) in the United States following its Build-Operate-Manage (BOM) model. Initially GAI will focus on serving the poor and immigrant communities in NYC and then it may expand its operation in Arkansas, California and other States. The office of the GAI has been opened in Jackson Heights in New York City (NYC). Grameen Trust sent resource persons to implement the microfinance program of GAI on the ground. GAI recruited local staff and trained them on Grameen Bank credit delivery mechanism. The first loan of GAI was disbursed on January 15, 2008. Members have utilized loans for various purposes including candy store, sewing machine, salon accessories, selling jewelry, pocket books and others. To know more about the project please visit http://www.grameenamerica.com For latest information on the project performance please see the table above. Hainan Microcredit Project in the Grameen Bank Model (HMPGBM), China Hainan Rural Credit Union (HRCU) and Grameen Trust (GT) began discussions in summer 2007 regarding implementing a microfinance program following the Grameen Bank Approach (GBA) in Hainan Province of China. The plan to implement the program was formally announced in December 2007. HRCU committed to fund RMB 30 million for this program. In April 2008, GT sent two resource persons from Grameen in Hainan. GT resource persons recruited local staff and trained them up on Grameen methodology. They started implementing the project with three local staff.

Hainan Microcredit Project in the Grameen Bank Model (HMPGBM), as the program is known, disbursed its first loans on June 03, 2008, to 10 members of Shima village. The loan disbursement ceremony was held at the HRCU office. Each of the 10 borrowers received RMB 2,000, which they plan to use on pig fattening, poultry and grocery business. In December 2008, HMPGBM has opened its second branch in Tunchang County and the first loan size was increased upto RMB 4,000. Asociacion Costa Rica Grameen (ACRG ) Asociacion Costa Rica Grameen (ACRG ) was launched in December 2005 and started its operation in Costa Rica under BOT (Build-Operate-Transfer) model of Grameen Trust. GT has received financial support from Whole Planet Foundation USA to implement the microcredit program in Costa Rica. The aim of this project is to reach out to 4500 members over a period of 3 years so as to create a separate microcredit operation with a vision of achieving institutional and financial sustainability. GT sent five Grameen experts to Costa Rica to initiate and continue microcredit program in Costa Rica. The project is working in Guacimo, Siquirres and Limon in the Limon Province where poverty and population density levels are high. The project has recruited local staff and provided them training. Members have taken loans for poultry, farming, selling of local products like handicrafts, restaurant business, selling homemade foods etc GT is optimistic that the project will be successfully implemented and will meet its goals. For latest information on the project performance please see table no. 1 Banrural Grameen Microfinanzas, Guatemala Banrural Grameen Microfinanzas was initially known as Association Civil Guatemala Grameen Credit (ACGGC). It was set up in December 2005 as a Build-Operate and Transfer (BOT) project of Grameen Trust in order to provide financial services through microcredit for poverty alleviation in Guatemala with financial assistance from the Whole Planet foundation. During a visit in April 2007, the erstwhile First Lady of Guatemala, Ms. Wendy W.de Berger, proposed a partnership between ACGGC, Creciendo Bien and Banrural which is one of the largest banks in Guatemala. This was proposed because it was believed that the project could reach out to more poor people of Guatemala through using Banrurals extensive network across the country. On November 17, 2007 a Memorandum of Understanding was agreed between Banrural, Whole Planet Foundation, ACGGC and Grameen Trust. The signing ceremony was held at the Presidential Palace on December 11, 2007 in the presence of Professor Muhammad Yunus. Following the agreement Banrural set up a Banrural Grameen Division to implement the Grameen microcredit program nationwide. Mr. Alomgir Hossain, the former Director of ACGGC, has been appointed as the Director of Banrural Grameen Microfinanzas. Four Grameen resource

persons of ACGGC have been appointed as trainers and regional managers of the new initiative. Banrual Grameen Microfinanzas is now referred to as a Joint Collaboration Program. As per the agreement, Banrural will provide financial resources and Grameen Trust will provide technical assistance and manage the operations through the Grameen resource persons on the ground. Aceh Grameen Credit Project (AGCP) GT initiated a directly implemented post-tsunami rehabilitative microfinance project in the Aceh region of Indonesia under the Build, Operate and Transfer (BOT) model called `Aceh Grameen Credit Project with support from the Grameen Aceh Cooperative. The Grameen Aceh Cooperative was set up at the initiative of Sister Beth del Fierro from Philippines following a visit to Grameen in June 2005. The primary objective of the Cooperative is to support thousands of women in the tsunami affected community and help them find long-term prosperity through microcredit. GT sent one resource person as the Project Director on July 20, 2006 in order to start the BOT program in Aceh for providing microcredit to the tsunami affected people in 9 villages. The primary objective of the project is to reach 2500 members within the period of three years. The Project Director is actively undertaking the microcredit program including recruitment of staff, training of members and staff, group/member selection, loan disbursement, loan monitoring etc. Turkish Grameen Microcredit Project (TGMP ) The Turkish Grameen Microcredit Project was officially launched in Diyarbakir, southeastern Turkey on June 11, 2003. Professor Muhammad Yunus, Executive Trustee of Grameen Trust and Professor Aziz Akgul, of the Turkish Foundation for Waste Reduction signed an agreement for the implementation of a Grameen Trust build operatetransfer Microcredit project for the poor communities in urban and rural Diyarbakir. Professor H.I. Latifee, Managing Director of Grameen Trust and Mr. Nusret Miroglu, Governor of Diyarbakir were also present. In March 2003, Professor Aziz Akgul, who is also a member of the Turkish National Assembly, visited Bangladesh with an invitation from the Prime Minister of Turkey, Recep Tayyip Erdogan for Grameen to implement a Microcredit project in Turkey. In response, Grameen Trust sent a delegation to Turkey to develop a project plan that was approved for funding by the Turkish Foundation. Afterwards, GT appointed the Project Director and two branch managers for this project from a team of highly experience staff of Grameen, who were sent off to begin the implementation process. The project launch followed the International Conference on Poverty Reduction through Microcredit, which took place in Istanbul from June 9-10, 2003. Prime Minister Erdogan, who reiterated the commitment of the Turkish Government to poverty alleviation through microcredit in Turkey, inaugurated the conference, which was organized by the Turkish

Foundation for Waste Reduction in consultation with Grameen Trust. Participants included high-level representatives of the Turkish Government, NGO leaders, bankers, academics, journalists and donor organizations. Microcredit practitioners from the Philippines, United Kingdom, United States, Nepal, Bosnia, Bangladesh, Vietnam and Kosovo were invited to discuss the experience and impact of Microcredit programs. The conference focused on issues such as:
o o o o

Targeting the very poor Achieving sustainability Options for financing Guidelines for regulatory environment of Microcredit programs

Currently, the project is operating though its six branches in Diyarbakir, Ankara, Batman, Ergani. The project saw the successful completion of building up capacity of local staff. Now only two expatriates from the GT team remain there in managerial positions. To know more about the project please visit http://www.tgmp.net Kosovo Grameen Microcredit Project (KGMAMF) The Kosovo Grameen Missione Arcobaleno Microcredit Fund (KGMAMF) is another GT BOT project that was established in June 2000 to aid conflict-affected women in the region. For this project, GT received US$ 4.83 million to establish a microcredit program, to help rebuild the economic activities of the poor in Kosovo. KGMAMF operates through four branches at Peje, Pristina, Gjilan and Prizren regions of Kosovo. The project saw the successful completion of building up capacity of local staff, after which the majority of the expatriate management team returned to Bangladesh, leaving the operations of branches in the hands of local staff members. Now only two expatriates from the GT team remain there in managerial positions. UNV-GT Zambia - Micro Finance Poverty Reduction Project (MFPRP) GT and UNV had been in negotiations for a few years to create a relationship for combating poverty through microfinance. These negotiation efforts took concrete form in mid-2003, as a follow up to which the Managing Director of GT met with UNV officials in Bonn, Germany, to discuss their future collaboration in Zambia. However, before the project was finalized, a four member technical mission consisting of officials from both GT and UNV visited Zambia from December 7-13, 2003. The purpose of this visit was to assess the situation, nurture the partnership and clarify the role of key partners and cooperative actors before the actual implementation of the project. Following this joint mission in December 2003, the officials met a number of organizations including UNDP, CIDA, ICAZ, MBT, AMIZ, MPU, the Central Bank, MCDSS, two ministers and the NGO Association in Zambia. The members of the mission also saw various government officials, NGO representatives, microcredit practitioners and poor women from the rural areas and shared with them the global

activities of Grameen Trust and the future possibilities of developing microcredit programs in Zambia following the Grameen Bank Approach. The project was officially launched in 2004 with the goal of reaching 2,400 women suffering