The micro-finance program aimed to provide access to finance for the poor people by ensuring services for generating IGAs that help people increasing income, alleviating poverty as well as improving the quality of life. Since its inception, GUK put utmost efforts to make significant contribution in creating favorable situation for enterprise development, capacity enhancement and social protection by efficient implementation of various financial products under different components of micro-finance program. In compliance to the rules & regulations of Micro-credit Regulatory Authority (MRA), GUK formulated its citizen charter in order to make the people understand clearly about the transparent financial policies applicable for financial services to target people. Headed by a two Directors of Micro-finance, GUK provides it’s micro-finance services by setting up 203 Branch Offices, 38 Area Offices, 10 Zonal Offices, 4 Regional Offices and deployed 2,475 efficient manpower.
Key Implementation Strategy
For effective implementation of micro-finance program, the organization has been maintaining the following key strategy and approaches;
- Followed by participatory management under a group development approach.
- Special emphasis on sustainability of its program participants.
- Implementing cluster-based development activities through mobilizing all sort of local resources and provide need-based information & technologies to the program participants and communities.
- Special emphasis on human resource development for ensuring better services to participants.
- Special focus and priority on ultra-poor and growing entrepreneurs.
- Proper delivery of diverse loan product for ensuring self-employment, income and wages.
- Ensuring information, access to market and transfer of technology to the program participants for their secure and safety investment.
- Establishing and maintaining linkages & partnership with Govt./NGO/ private organization and national/international donor agencies.
- For implementing micro-finance program, the organization always emphasis on women’s empowerment
- Regular monitoring, follow up & close supervision by management level staffs for analyzing the progress and benefit of the project participant
GUK was initiated through savings activities, savings is always encouraged to accumulate fund and get rid of poverty. In fact, Savings activities (accumulation of tiny amount from individual participant) are being operated in GUK in order to mitigate Group member’s crisis and promote their livelihood through door-step service. To create and increase own fund and employ that fund into the income-generating-activities by the participant is not possible at all without a habit of savings. For this reason, GUK adopted some steps to make the participants savings oriented. The group participants have got passbook and they receive interest on their savings as per the interest policy of GUK
Objectives of Savings Program
- To minimize financial crisis & poverty eradication of group participant.
- To change program participant’s attitude and make them savings minded.
- To ensure future protection of group participant.
- To reduce dependency on lending.
- To increase the financial confidence of program participants.
- To ensure and increase participatory investment in the IGAs.
An adage goes like ‘savings is strength’ Savings mobilization is an important tool for capital accumulation. Savings mobilization is an important tool in the field of investment. Savings mobilization plays a vital role for the poor people who generally tend to borrow money for investment in any form of income generating activity. In-fact savings helps the borrowers to overcome borrowing. GUK offers three types of savings products: general savings, voluntary savings & long-term savings.
The product offers members flexible weekly deposit facility and withdrawal facility at the time of cancellation of membership. Benefits are provided as per rules of Micro Credit Regulatory Authority.
This product offers flexible voluntary weekly deposit facility to cover emergency expenditures and withdrawal facility at any-time during the membership period. Benefits are provided as per rules of Micro Credit Regulatory Authority
A long-term deposit invest scheme where members have the opportunity to deposit from TK 200 to TK 1,000 per month for a period of 5 & 10 years at a much higher return rate aiming to strengthen the financial capacity of our members that helps them to safe & secured future
Member’s welfare Fund/Risk Fund
GUK introduced welfare/risk fund provision for its program participants. The cited welfare/risk fund has been created in order to exempt a member’s family from the burden of debt in the event of the death of a client or the guardian of the member.
Micro -Finance as a fruitful instrument of poverty reduction and GUK addresses this issue successfully by using various need-based loan products for financial services according to demands of people with different levels of poverty and enterprises. The organization has been implementing in the following financial products.
Buniad (Loan for Ultra Poor)
GUK has been implementing its Buniad (UPP) micro-finance product from July 2004 with the financial and technical assistance from Palli Karma Sahayak Foundation (PKSF) in 6 districts and 42 branches with a maximum loan ceiling of 29,000 Taka. The main objective of this program is to uplift the socio-economic conditions of the ultra-poor, illiterate and unemployed community people living below the poverty level having no skill and access to resources. GUK provides small loan and IGA based training under the Buniad product. During the period under report a sum of 438,295,000 Taka has been disbursed among 19,108 borrowers. The cumulative loan amount disbursed under Buniad is 2,943,544,000 to 131,163 borrowers. Out of which 1,471,772,000 Taka has been disbursed in the agriculture sector to 65,582 borrowers, 883,063,200 taka in the livestock sector to 39,348 borrowers and 588,708,800 in other sectors to 26,233 borrowers
Jagoron (Rural Micro-Credit)
Among all the loan products Jagoron (Rural Microcredit and Urban Microcredit) is the widest in spread. This product is being implemented with the financial and technical assistance from PKSF. The maximum loan ceiling under this product is 49,000 Taka. The main objective of providing the Jagoron (RMC & UMC) credit support to the members is to develop their capacity in running individual small IGAs, as well as enhance knowledge on different social issues like domestic violence, dowry, divorce, effects of early marriage, polygamy, health & sanitation etc.
At present this component is being implemented in 10 districts under 55 upazillas through 125 branches. During the period under report 376,846,000 taka has been disbursed 132,774 borrowers. The cumulative amount of loan disbursed up to the period under report is 18,396,166,000 Taka to 950,970 borrowers. Out of which 6,990,543,080 Taka has been disbursed in the agriculture sector to 361,369 borrowers, 5,518,849,800 Taka in the livestock sector to 285,291 borrowers and 5,886,773,120 in other sectors to 304,310 borrowers
Agrosor Micro-Enterprise (ME)
GUK has been implementing its Agrosor/Micro-Enterprise loan product (ME) with the financial support from PKSF from July 2003. The maximum loan ceiling under this product is 500,000 Taka. The main objective of micro enterprise loan product is to foster the growth of small-scale enterprises with employment creation capability to ensure that the entrepreneurs can play a pivotal role in overall economic growth of the country. GUK emphasizes on their members to enroll for Rural Micro Credit Program for their enrollment in Agrosor/ME who successfully utilized Jagoron (RMC & UMC) loans for more than 2 years including new members considering all criteria be fulfilled for ME loan. The loan is repayable by weekly and or monthly repayment basis. During the period under report 2,761,052,000 has been disbursed to 33,878 borrowers. The cumulative loan disbursed up to the period is 12,395,738,000 among 140,960 borrowers. Out of which 4,586,423,060 Taka has been disbursed in the agriculture sector to 52,155 borrowers, 3,718,721,400 Taka in the livestock sector to 42,288 borrowers and 4,090,593,540 in other sectors to 46,517 borrowers.
GUK has been implementing its Sufolon (Seasonal) loan product with the financial and technical assistance from PKSF to support the poor and marginal farmers in producing different seasonal crops like potato, paddy, high value corps and vegetables along with livestock rearing such as beef fattening with one-time installment after harvesting period. The maximum loan ceiling under this product is 10,000 Taka. The repayment period ranges from 3-6 months. During the period under report 98,004,000 taka has been disbursed to 12,756 borrowers. The cumulative loan disbursed is 723,087,000 among 146,700 borrowers. Out of which 506,160,900 takas has been disbursed in the agriculture sector to 102,690 borrowers and 216,926,100 Taka in the livestock sector to 44,010 borrowers.
Disaster Management (SAHOS)
Bangladesh is a disaster-prone country. Various types of natural and man-made disasters occur every year causing heavy damage to crops, livestock, households and other properties and assets of the poor people living in disaster prone areas. The northern part of Bangladesh particularly the riverine area of the mighty river Jamuna, Teesta and Bangali passing through the vast area of Rangpur, Gaibandha, Bogra and Sirajganj districts submerges nearby communities and island chars during the flood season.
The main objective of SHAHOS (DML) is to support the poor and the ultra-poor members with soft loan for disaster preparedness and post disaster rehabilitation through repair & renovation of households, installation of flood free tube-wells, latrines etc. The maximum loan ceiling under this product is 5,000. The cumulative amount disbursed stands BDT 3,3209,000 taka to 15,210 borrowers
Land Lease Loan
GUK has provided Land lease loan support among the beneficiaries under the LIFT program for leasing land, inputs & machineries for crop cultivation in order to earn income as well as create working scope of the potential ultra-poor beneficiaries/borrowers for their socio-economic development. During the reporting period 20,765,000 taka has been disbursed to 502 borrowers. The cumulative disbursement amount stands at 42,524,000 to 1,385 borrowers.