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 HistoryOpened as a “Relief” Organization aiding and resettling refugees in 1972Twin objectives of :- Poverty Alleviation,- Empowering the Poor, especially womenUnderwent 2 major Transitions:- “Relief” to a “Development” Organization- Development focused from “Community” to “Target Groups”
3 Core Programs of BRACBRAC Economic Development ProgramBRAC Education ProgramBRAC Health ProgramSupport Programs
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 interventionsSpecial investment program in the form of a grant/capital in kind and stipendSkills and Social development training Program“Push Out” Strategy:Addresses neglected dimensions of human capitalStrengthens 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 Period1 year (46 weeks)Repayment MechanismEqual Weekly InstallmentsLoan ProductsCow/Goat/Chick Rearing, Vegetable production, NurseryMembers6,952Active Clients2,293 or 33 % (Oct 04)OutstandingUS $ 61,084Total DisbursementUS $ 87,118
7 Dabi / Poverty Alleviation / MF 1 Caters to the moderate poor in both rural and urban areasOrganizes landless groups (Village Organizations) and provides them with financial services and self-employment opportunitiesProvides collateral free loans, savings facilities, and members ‘death benefit’
8 Features of Dabi Loan Range US $ 75 – US $ 300 Service Charge 15 % Repayment Period1 year (46 weeks)Repayment MechanismEqual Weekly InstallmentsLoan ProductsGeneral, Sector, Housing, EmergencyCompulsory Savings5 % of Loan AmountActive Clients3,722,406 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 activitiesForms Enterprise Organizations so as members can exchange views and share knowledgeMembers attain cost effectiveness and efficient time managementParticular type of work: Agriculture, Poultry & Livestock, Aquaculture
10 Features of Unnoti Loan Range US $ 250 – US $ 830 Service Charge 15 % Repayment Period1 year (46 weeks)Repayment MechanismEqual Weekly InstallmentLoan ProductsAgriculture, Poultry & Livestock, AquacultureCompulsory Savings5 % of LoanActive Clients154,921 or 69 % (Oct 04)
11 Progoti / Individual Lending Caters to small enterprises with growth potentials in rural and semi urban areasProvide loans to that part of the population that fall neither in the MF target group nor are able to take loan from the formal banksCreate new employment through enterprise developmentMotivate 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 Period12, 18, or 24 monthsRepayment MechanismEqual Monthly InstallmentsLoan ProductsGrocery, Bakery, Stationary, Pharmacy, Clothing, etc.Loan Appraisal Fee0.5 % of Loan AmountCollaterals NeededGuarantor Bond, Mortgage Deed, Equitable MortgageEntrepreneurs53,849 (Oct 04) (cum. 134,241)
13 BRAC Bank LimitedInaugurated in 2001 as a full fledged commercial bank for promoting access to economic opportunities for all individuals and businessesBelieves 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 Branches10No. of SME units261Loan RangeUS $ 3,300 – US $ 50,000Service 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 Period12 or 24 monthsRepayment MechanismEqual Monthly InstallmentsNo. of Clients13,500
15 BRAC Afghanistan Registered as a Foreign NGO and started in May 2002 Working in 56 districts of 17 Provinces with 6 Core Programs:HealthEducationIncome Generation ProgramsCapacity BuildingAgriculture & LivestockNational 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 Covered12 (45 Districts) 75 Area Off.Loan RangeUS $ 75 – US $ 400Service Charge15 %Repayment Period1 year (46 weeks)Repayment MechanismEqual Weekly InstallmentLoan 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 businessLoans 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.