The Annual Report presents the progress of PKSF activities during the Financial Year (FY) 2004-2004. During the year, PKSF expanded and diversified its credit program for the poor, in rural as well as urban areas. In an evolutionary development in product innovation, PKSF launched a microcredit program for small and marginal farmers. The program for the “missing middle” consists of a collaborative pilot venture for the monga-affected people with the Social Development Foundation and funding POs of hilly origin.

In FY 2004-2005, PKSF disbursed Tk. 3,660.02 million to its POs. At the end of FY 2004-2005, cumulative loan disbursement of PKSF to POs stood at Tk. 22,135.16 million. The loan recovery rate has been maintained at 96.62%. At the end of the FY 2004-2005, the cumulative number of borrowers was 5,522,406 (91.14% women and 8.86% men).

For the second consecutive year, PKSF was very active in the microcredit campaign at home and abroad, particularly as the Government of Bangladesh decreed PKSF as the focal institution for the observance of the United Nations International Year of Microcredit. In February 2004, PKSF successfully hosted the Asia Pacific Regional Microcredit Summit Meeting of Councils (APRMS) 2004 in collaboration with the Microcredit Summit Campaign, providing the institution with an excellent opportunity to promote inclusive financial services at home and abroad.

In FY 2004-2005, PKSF re-affirmed the importance of human resource development that will contribute to a skilled workforce in the long-run. Also, office accommodations and physical conditions were improved and work to extend the PKSF Bhaban was started.

PKSF contributed significantly in the preparation of a user-friendly regulatory framework for the microcredit sector of Bangladesh. The committee appointed by the Government to prepare the regulatory framework and a draft law was headed by the Governor of Bangladesh Bank; while the Technical Committee which prepared detailed guidelines and formats to assist in regulation was headed by the Managing Director, PKSF. Much of the background and technical work was done at PKSF.

During this year, the two-year long Follow-up Monitoring and Evaluation Study (FMES) on the microcredit program of PKSF was completed, which indicated a significant impact of microcredit on alleviation of poverty of the poor borrowers. Also, an anthropological study on the monga problem in the north was conducted to have a clearer understanding of the long lasting crisis.

I express my earnest gratitude and appreciation to all the PKSF employees, POs and beneficiaries, whose committed efforts and services contributed to these successes. I express my sincere thanks to the Government of Bangladesh (GOB), especially the Ministry of Finance; our donor agencies – the World Bank, the Asian Development Bank (ADB), the International Fund for Agricultural Development (IFAD) and the United States Agency for International Development (USAID) – for their continuous support; and the members of the General Body and the Governing Body that have guided PKSF in reaching even greater heights.

January 2006

Fakhruddin Ahmed
Managing Director