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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 Twin objectives of : - Poverty Alleviation, - Empowering the Poor, especially women Underwent 2 major Transitions: - “Relief” to a “Development” Organization - Development focused from “Community” to “Target Groups”

3 Core Programs of BRAC BRAC Economic Development Program BRAC Education Program BRAC Health Program 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 “Push Down” Strategy: 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 Skills and Social development training Program “Push Out” Strategy: Addresses neglected dimensions of human capital 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 Members 6,952 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 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’

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 Forms Enterprise Organizations so as members can exchange views and share knowledge Members attain cost effectiveness and efficient time management Particular type of work: Agriculture, Poultry & Livestock, Aquaculture

10 Features of Unnoti Loan Range US $ 250 – US $ 830 Service Charge 15 %
Repayment Period 1 year (46 weeks) Repayment Mechanism Equal Weekly Installment Loan Products Agriculture, Poultry & Livestock, Aquaculture Compulsory Savings 5 % of Loan Active Clients 154,921 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 Range US $ 500 – US $ 5,000 Service Charge
15 % Repayment Period 12, 18, or 24 months Repayment Mechanism Equal Monthly Installments Loan Products Grocery, Bakery, Stationary, Pharmacy, Clothing, etc. Loan Appraisal Fee 0.5 % of Loan Amount Collaterals Needed Guarantor Bond, Mortgage Deed, Equitable Mortgage Entrepreneurs 53,849 (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 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. 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 $ 13,501 – US $ 25,000: 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, Involve the poor, especially women, in income generating activities, Increase economic development in Afghanistan by increasing the income level of poor women, Contribute to the overall development of Afghanistan

17 Features of BRAC Afg. MF Program
Provinces Covered 12 (45 Districts) 75 Area Off. Loan Range US $ 75 – US $ 400 Service Charge 15 % Repayment Period 1 year (46 weeks) Repayment Mechanism Equal Weekly Installment Loan Products Carpet weaving, small retail, cloth stitching, poultry, etc. Active Clients 46,809 or 72 % (Oct 04) Members’ Savings US $ 662,542 (Oct 04) Total Outstanding US $ 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 Loans are disbursed to stores like beauty parlor, grocery, stationary, cloth, shoe, utensils, bukhari, etc. 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 develop existing enterprises by providing technical assistance and financial support; To increase agricultural production; To enhance agricultural practices; To decrease the mortality of poultry & livestock

20 BRAC Enterprise Bank (BEB)
A vehicle for Microfinance and Small & Medium Enterprise loan (MFSM) activities. 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: * 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; Inaugurate BRAC Enterprise Bank; Apply the know-how in Bangladesh and effectively implement them in Afghanistan.


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