A model that is replicated globally

FE Team | Published: July 07, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

Habibur Rahman
It is not everyday that one hears of a Bangladesh project replicated globally. Yet, ASA, a Bangladeshi NGO, has achieved this rare distinction. It now works as a consultant to NGOs in a number of countries that include India, Pakistan, Sri Lanka, Afghanistan, the Philippines, Nigeria, Yemen, Indonesia and a few other countries. The programme started when the UNDP (United Nations Development Programme) selected it as an international technical service provider (ITSP) to Nigeria and the Philippines. Since then ASA has extended its service to a few other countries, as well. A specialised fund, Catalyst Microfinance Investors (CMI) was formed by ASA and Sequoia of the Netherlands to assist emerging NGOs in Africa and Asia dealing with micro-credit to develop their skills and resource base in line with ASA. The investors of this fund are Gray Ghost of USA, Yves Burrus and Ivan Pictet of Switzerland and the members of CMI. By 2005 they had disbursed 1.85 million US dollars and plans to form a fund of 7 million US dollars very soon.
Back at home in Bangladesh, ASA along with CORDAID, Netherlands is engaged in capacity building of NGOs. So far 30 NGOs have been involved as partner organisations. The number of people covered by this programme is about a quarter million and almost 210 million (21 crore) takas have been provided to them by ASA that helped them develop a capital base of almost 300 million takas. Besides, ASA also helps them access other sources of finance like those of PKSF and commercial banks.
So far ASA's efforts have reached out to 6.6 million people. In a survey on the beneficiaries it was found that capital gains were at 133.07 per cent. Monthly increase in income was reported at 17.91 per cent higher than before they became involved with ASA. Fully 94.88 per cent reported that their food intake was standard as they had started vegetable gardening and rearing cattle after being involved with ASA. Literacy rate has increased among its members by 72.69 per cent, while number of school going children has increased by 65.88 per ceny. Fully 96.64 per cent said that they had been able to employ others, as well. Those who reported as being able to employ people from outside the family were 91.94 per cent. Health consciousness also increased and 37 per cent said that they had visited doctors. Fully 96.88 per cent reported that they started to drink fresh water after being involved with the NGO, while 91.37 per cent reported using sanitary latrines. 88.16 per cent reported increasing assets while 89.16 per cent said that they had improved their house.
The greatest achievement of ASA has been its ability to annually cut down its cost of servicing loans. It has made ASA a growth model for others. Its staff handle 38 borrowers per person keeping the cost of each borrower at six dollars compared to 98 dollars among mature micro-credit organisations. It has diverged from other microcredit NGOs and is thriving on a low-yield-low-cost, generating returns of 10 per cent upwards. Its strategy of low cost growth has generated profits and spectacular growth. This has resulted in less dependence on PKSF funding and a 20 per cent growth of its assets. Its concessional debt also fell by one-tenth. Increasingly client savings, both compulsory and voluntary, are the biggest source of funding. However, ASA remains focussed on its clientele of women loanees at the low end of the market.
In a bid to reach out to the hardcore poor ASA has taken up several programmes, specifically directed at them. These include hard core poor programme, business development programme, education programme and relief and rehabilitation programme. The programmes are increasing its coverage and depth with every passing month. The loan is normally paid back at one go and is given for a duration of one or two months and the interest rate is 1 per cent per month.
In a departure from run-of-the-mill practice ASA has also started providing security to its loanees through insurance schemes. These programmes not only cover deaths but also accidents and health. This has not only given a bigger financial base to the organisation but also increased the stakes for all involved. Insurance covers have also been extended to the ASA staff. Increasingly, security provided through insurance has become an important task of ASA.