Re-orienting NGOs

There are a few thousand non-governmental organisations (NGOs) spread across the country. Of these, about 700-800 fall under the Micro-credit Regulatory Authority (MRA). The Bangladesh NGO Foundation (BNF), a state-owned organisation, serves approximately 2,000 NGOs and provides grants to local NGOs for specific purposes in the range of Taka 2,00,000 to Tk 4,00,000. Despite the growth of NGO and government credit networks, roughly half of the rural households are reported to access credit from all sources. About two-thirds of them borrow from institutional sources of credit at 15-27 per cent interest rates (banks, NGOs and cooperatives) and one-third access credit from non-institutional sources at an exorbitant interest rate (80-100 per cent per year).
Among institutional sources, NGOs supply 60 per cent of the total credit needs in rural areas and the banks feed one-tenths. If credit from banks channelled through NGOs is taken into account, their share would stand at roughly 50-55 per cent. What is more important is the fact that 75-80 per cent of loan by NGOs go to functionally landless households which historically cannot access credit due to collateral condition.
Notwithstanding self-proclaimed claims from NGOs and the government to have reached the poor with credit and other services, the hard-to-reach areas still groan under extreme deprivation of services.
This writer recently attended a discussion in Barisal. Almost all the four categories of NGOs took part in it. It appeared from the discussion that only-rights-based and service-based NGOs received a heavy blow while the mixed or only-credit-based NGOs are surviving with the nose above water. The reasons for such setbacks are: (a) one-thirds to half of the NGOs had to close down operations following dwindling aid/grants from donors, (b) non-cooperation from concerned quarters, (c) wrongful and corrupt practices of some NGOs tarnishing the image of the sector, (d) division among NGOs and (e) politicisation.
Could Bangladesh do well without NGOs? We all know that Bangladesh performed admirably in many social and human development indicators during the past few decades. The NGOs played a positive role in this respect. Eminent economist Wahiduddin Mahmud has observed: "As regards to pathways to human development, Bangladesh's achievements thus far do not fit into either of the typical pathways of 'income-mediated' or 'support-led' human development . The former works through rapid and broad-based economic growth, which facilitates better standards of living, while the latter involves large public social spending on welfare-oriented programmes. While per capita income in Bangladesh has grown at a modestly high and steadily increasing rate since the early 1990s, this alone cannot explain the extent of improvements in the social development indicators. Neither does Bangladesh represent the typical case of 'support-led' human development, since cross-country comparisons show that Bangladesh's public spending per capita on both health and education has remained considerably lower than what is expected even at comparable low levels of per capita income."
In the discourse on development puzzle, the role of NGOs is recoded well but not at the cost of government. While the government has been a 'hero' in the whole transformation - especially through implementing food for education, and stipend for girls, the NGOs played a pivotal role as 'side-hero' in the pursuit of the government's goal. One could recollect how an NGO like BRAC heavily campaigned for the spread of oral saline (ORS) to save lives of millions of children, and is still working with the government in addressing deadly TB and malaria diseases. Professor Mahmud reckons that two important pillars contributing to the development puzzle are low-cost solution such as the use of oral rehydration saline (ORS) for diarrhoea treatment and increased awareness created by effective social mobilisation campaigns. These include, for example, campaign for child immunisation, contraceptive adoption, and girls' schooling. "The scaling up of programmes through the spread of new ideas is aided by a strong presence of non-government organisations, as well as the density of settlements and their lack of remoteness, made possible by an extensive network of rural roads. The rapid expansion of microcredit programmes may also have been a contributing factor, by promoting social interactions and mobility for rural women. Besides, the economic impact of microcredit on poverty, the mobilisation of women's credit groups may have led to non-economic gains through enhanced agency, empowerment and mutual support, thus creating the social environment for other development interventions to work better."
All NGOs should not be placed in one basket. We should differentiate good and bad NGOs. The government should duly take into cognisance the good NGOs and entrust them with some of the social protection activities. This would require more funding for the NGOs from the government side. Instead of being donor-funded, NGOs should be government-funded to carry out social development works on behalf of the government.
The upcoming challenges before the nation also apparently warrant a special attention to NGOs. First, the growing unemployment among the educated youth, a major concern now, could partly be addressed by the expansion of NGO activities of any category. Second, the service delivery system in the hard-to-reach areas, yet in a fragile state, can only be beefed up with the help of the NGOs. Third, NGOs, by virtue of their matrix of social mobilisation, could face the challenges of growing militancy, the associated social evils such as rape, early marriage, dowry, dropouts from schools, child labour, street children, etc. Fourth, to reach the poorest of the poor with asset transfer or with doles, NGOs could help the government best as they have presence at the grassroots levels. In fact, almost half of the credit-constrained poor households could be served by NGOs. Development is the ultimate goal no matter who delivers it.
The writer is a former Professor of Economics at Jahangirnagar University.
abdul.bayes@brac.net