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WELCOME to a presentation on BRAC Micro and Small Business Finance Programs Presented By: Aminul Alam Deputy Executive Director, BRAC.

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Presentation on theme: "WELCOME to a presentation on BRAC Micro and Small Business Finance Programs Presented By: Aminul Alam Deputy Executive Director, BRAC."— Presentation transcript:

1 WELCOME to a presentation on BRAC Micro and Small Business Finance Programs Presented By: Aminul Alam Deputy Executive Director, BRAC

2 Brief History Opened as a Relief Organization aiding and resettling refugees in 1972 Opened as a Relief Organization aiding and resettling refugees in 1972 Twin objectives of : Twin objectives of : - Poverty Alleviation, - Empowering the Poor, especially women Underwent 2 major Transitions: Underwent 2 major Transitions: - Relief to a Development Organization - Development focused from Community to Target Groups

3 Core Programs of BRAC 1. BRAC Economic Development Program 2. BRAC Education Program 3. BRAC Health Program 4. Support Programs

4 BRAC Micro Finance Canvas Urban (20%)Rural (80%) Better-off (27%) Vulnerable Non- poor (20%) Moderate Poor (17%) Extreme Poor (31%) IGVGD TUP Dabi Unnoti Progoti Destitute Poor (5%)

5 Target Ultra Poor (TUP) Designed to meet the demands of the Ultra poor by strengthening their livelihood conditions Designed to meet the demands of the Ultra poor by strengthening their livelihood conditions Push Down Strategy: Push Down Strategy: Targeting very poor households who have suffered relative neglect in most interventions Targeting very poor households who have suffered relative neglect in most interventions Special investment program in the form of a grant/capital in kind and stipend Special investment program in the form of a grant/capital in kind and stipend Skills and Social development training Program Skills and Social development training Program Push Out Strategy: Push Out Strategy: Addresses neglected dimensions of human capital Addresses neglected dimensions of human capital Strengthens the voice of the poor in the structures and processes that determine livelihood outcomes. Strengthens the voice of the poor in the structures and processes that determine livelihood outcomes.

6 Features of TUP Loan Range US $ 25 – US $ 300 Service Charge 15 % Repayment Period 1 year (46 weeks) Repayment Mechanism Equal Weekly Installments Loan Products Cow/Goat/Chick Rearing, Vegetable production, Nursery Members6,952 Active Clients 2,293 or 33 % (Oct 04) Outstanding US $ 61,084 Total Disbursement US $ 87,118

7 Dabi / Poverty Alleviation / MF 1 Caters to the moderate poor in both rural and urban areas Caters to the moderate poor in both rural and urban areas Organizes landless groups (Village Organizations) and provides them with financial services and self-employment opportunities Organizes landless groups (Village Organizations) and provides them with financial services and self-employment opportunities Provides collateral free loans, savings facilities, and members death benefit Provides collateral free loans, savings facilities, and members death benefit

8 Features of Dabi Loan Range US $ 75 – US $ 300 Service Charge 15 % Repayment Period 1 year (46 weeks) Repayment Mechanism Equal Weekly Installments Loan Products General, Sector, Housing, Emergency Compulsory Savings 5 % of Loan Amount Active Clients 3,722,406 or 82 % (Oct 04)

9 Unnoti / Enterprise Development / MF 2 Caters to the small and marginal farmers, who do not have the capacity to start their own income generation activities Caters to the small and marginal farmers, who do not have the capacity to start their own income generation activities Forms Enterprise Organizations so as members can exchange views and share knowledge Forms Enterprise Organizations so as members can exchange views and share knowledge Members attain cost effectiveness and efficient time management Members attain cost effectiveness and efficient time management Particular type of work: Agriculture, Poultry & Livestock, Aquaculture Particular type of work: Agriculture, Poultry & Livestock, Aquaculture

10 Features of Unnoti Loan RangeUS $ 250 – US $ 830 Service Charge15 % Repayment Period1 year (46 weeks) Repayment MechanismEqual Weekly Installment Loan ProductsAgriculture, Poultry & Livestock, Aquaculture Compulsory Savings5 % of Loan Active Clients154,921 or 69 % (Oct 04)

11 Progoti / Individual Lending Caters to small enterprises with growth potentials in rural and semi urban areas Provide loans to that part of the population that fall neither in the MF target group nor are able to take loan from the formal banks Create new employment through enterprise development Motivate small and medium enterprises to produce better products that are export quality

12 Features of Progoti Loan RangeUS $ 500 – US $ 5,000 Service Charge15 % Repayment Period12, 18, or 24 months Repayment MechanismEqual Monthly Installments Loan ProductsGrocery, Bakery, Stationary, Pharmacy, Clothing, etc. Loan Appraisal Fee0.5 % of Loan Amount Collaterals NeededGuarantor Bond, Mortgage Deed, Equitable Mortgage Entrepreneurs53,849 (Oct 04) (cum. 134,241)

13 BRAC Bank Limited Inaugurated in 2001 as a full fledged commercial bank for promoting access to economic opportunities for all individuals and businesses Inaugurated in 2001 as a full fledged commercial bank for promoting access to economic opportunities for all individuals and businesses Believes that the pursuit of profit and development can be mutually reinforcing goals. Believes that the pursuit of profit and development can be mutually reinforcing goals. Special focus on providing Small and Medium Enterprise (SME) who do not have access to institutional credit. Special focus on providing Small and Medium Enterprise (SME) who do not have access to institutional credit. Provide mass financing to enable mass production and mass consumption, hence contributing to the overall development of Bangladesh Provide mass financing to enable mass production and mass consumption, hence contributing to the overall development of Bangladesh

14 Features BRAC Bank Limited No. of Branches 10 No. of SME units 261 Loan Range US $ 3,300 – US $ 50,000 Service Charge: US $ 3,300 – US $ 13,500: US $ 3,300 – US $ 13,500: US $ 13,501 – US $ 25,000: US $ 13,501 – US $ 25,000: US $ 25,001 – US $ 50,000: US $ 25,001 – US $ 50,000: (Reducing Method) 24 % 21 % 18 % Repayment Period 12 or 24 months Repayment Mechanism Equal Monthly Installments No. of Clients 13,500

15 BRAC Afghanistan Registered as a Foreign NGO and started in May 2002 Working in 56 districts of 17 Provinces with 6 Core Programs: Health Education Income Generation Programs Capacity Building Agriculture & Livestock National Solidarity Program

16 BRAC Afghanistan Micro Finance Program (MF) Make credit available to the poor, especially women, Make credit available to the poor, especially women, Involve the poor, especially women, in income generating activities, Involve the poor, especially women, in income generating activities, Increase economic development in Afghanistan by increasing the income level of poor women, Increase economic development in Afghanistan by increasing the income level of poor women, Contribute to the overall development of Afghanistan Contribute to the overall development of Afghanistan

17 Features of BRAC Afg. MF Program Provinces Covered 12 (45 Districts) 75 Area Off. Loan RangeUS $ 75 – US $ 400 Service Charge15 % Repayment Period1 year (46 weeks) Repayment MechanismEqual Weekly Installment Loan ProductsCarpet weaving, small retail, cloth stitching, poultry, etc. Active Clients46,809 or 72 % (Oct 04) Members SavingsUS $ 662,542 (Oct 04) Total OutstandingUS $ 3,034,300 (Oct 04)

18 Small Enterprise Project (SEP) Catering to the small and medium entrepreneurs who do not have the financial resources for expanding their business Catering to the small and medium entrepreneurs who do not have the financial resources for expanding their business Loans are disbursed to stores like beauty parlor, grocery, stationary, cloth, shoe, utensils, bukhari, etc. Loans are disbursed to stores like beauty parlor, grocery, stationary, cloth, shoe, utensils, bukhari, etc. Has 190 entrepreneurs with US $ 98,048 outstanding Has 190 entrepreneurs with US $ 98,048 outstanding

19 Agriculture and Livestock Development and Credit Support Program (ALDCSP) To generate income and create employment opportunities, thus increasing farm level income; To generate income and create employment opportunities, thus increasing farm level income; To develop existing enterprises by providing technical assistance and financial support; To develop existing enterprises by providing technical assistance and financial support; To increase agricultural production; To increase agricultural production; To enhance agricultural practices; To enhance agricultural practices; To decrease the mortality of poultry & livestock To decrease the mortality of poultry & livestock

20 BRAC Enterprise Bank (BEB) A vehicle for Microfinance and Small & Medium Enterprise loan (MFSM) activities. A vehicle for Microfinance and Small & Medium Enterprise loan (MFSM) activities. Features of BEB: Features of BEB: * Relatively risk-free banking opportunities * Involve light demand on human resources * Deposits from Institutional/Wholesale customers * Technical assistance to MFSM customers in areas such as agricultural extension work, animal husbandry, sericulture, etc.

21 BRAC Enterprise Bank (cont) Commercial Areas of Business: Commercial Areas of Business: * Letter of Credit * Guarantees * Remittances (internal and external) * Foreign Exchange Operations * Deposits from Institutional/Wholesale customers

22 BRAC Afghanistan in the near future Have 150 MF Area Offices with 300,000 members by April 2008; Focus on increasing the number of SEP clients; Assist in the increase in farm level productions, by opening 75 ALDCSP offices by 2007; Collaborate with MoA on setting up a centre for hybrid seed and improved feed; I Inaugurate BRAC Enterprise Bank; Apply the know-how in Bangladesh and effectively implement them in Afghanistan.


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