Message from the Chairman

Foreword

Objectives of PKSF

Organizational Structure

Management

General Body

Members of the Present General Body

Governing Body

Members of the Present Governing Body

Officers and Staff

Management Staff of PKSF

Chapter-1 : Report of the Governing Body(Board of Directors)(FY2002-2003)

Chapter-2 :

• Independent Auditors’ Report
  
• Financial Statements (FY 2002-2003)
  
• Comments of the Managing Director on the Annual Accounts of Palli Karma-Sahayak Foundation (PKSF) for FY 2002-2003 and on Auditors’ Report
  

Chapter-3 : Overview of PKSF Activities

Chapter-4 : Brief Introduction to Micro-Finance and Technical Support (MFTS) Project

Chapter-5: Outcomes of the International Seminar on Attacking Poverty with Microcredit ....................(Held at PKSF, 2003): Looking Ahead

Chapter-6 : Some Policy Guidelines and Standards for Microcredit Management

Chapter-7 : Profile of New Partner Organizations (January 2003 - December 2003)

Annex-1 : List of the Partner Organizations: Medium and Small Organizations (OOSA)

Annex-2 : List of the Partner Organizations: Big Organizations (BIPOOL)

Annex-3 : List of the Pre-PKSF Partner Organizations

MESSAGE FROM THE CHAIRMAN

This has been another year of steady progress and achievements for PKSF. As its activities continued to expand and become increasingly diversified, all the performance indicators remained sound and healthy, as will be evident from this Annual Report. In addition to expanding and consolidating its own lending programmes, PKSF has been continuing to contribute to strengthening the country's microcredit sector through overall monitoring and providing various support services.

While mainstream rural microcredit remains the mainstay of PKSF's lending activities, efforts are being made to outreach the poorest of the poor on the one hand and to go upscale to promote micro-enterprises on the other. PKSF has been implementing the Financial Services for the Poorest (FSP), the preliminary findings from which suggest that the hardcore poor are also bankable. PKSF's micro-enterprise lending is also generating lessons about how to successfully provide larger loans to the progressive borrowers who have the demonstrated ability to go into scaled up micro-enterprises.

During the year under review, PKSF has further expanded its institutional support programme designed to enhance the capability of its partner organizations and the quality of their microcredit operations. PKSF also continues to be actively involved in the designing of a user-friendly regulatory framework for the country's microcredit sector. Globally, PKSF is playing an increasingly prominent role in facilitating the sharing of information, knowledge and experiences among microcredit professionals and practitioners from around the world.

As PKSF strives to fulfill its mission of poverty alleviation through microcredit, it has got increasing recognition for its success and has generated goodwill among all quarters. The Interim Poverty Reduction Strategy Paper (I-PRSP) of the government, prepared in March 2003, has highlighted the role of microcredit – and that of PKSF – as an integral part of the nation's effort for poverty alleviation.

I would like to take this opportunity to thank all concerned who have contributed to the achievements of PKSF.

Wahiduddin Mahmud
Chairman
January, 2004.......................................................................................................................

FOREWORD

The Annual Report presents the achievements of PKSF in the financial year (FY) 2002-2003. During the year PKSF further expanded and consolidated its microcredit programmes. PKSF launched Financial Services for the Poorest (FSP) Project targeting the hard-core poor during the year, while giving special emphasis on microenterprise development with the goal of making microcredit more employment and growth oriented. PKSF also launched another new project with special focus on livestock-based income generating activities with the financial assistance from IFAD.
During the FY 2002-2003, PKSF disbursed Tk. 2814.30 million to its POs. At the end of FY 2002-2003, cumulative loan disbursement by PKSF to POs stood at Tk.14240.595 million. The loan recovery rate has been maintained above 98%. At the end of the FY 2002-2003, cumulative number of borrowers was 41,72,595 (89% female and 11% male). PKSF also continued its institutional development activity to strengthen capacity of its POs.
PKSF actively participated and made substantial contribution towards preparing a user-friendly regulatory framework for the country’s microcredit sector during the year. PKSF organized an international seminar titled “Attacking Poverty with Microcredit” in the year which was attended by around 300 participants from home and abroad. PKSF will also organize the Asia Pacific Region Microcredit Summit Meeting of Councils during February 16-19, 2004 in Dhaka, Bangladesh. The papers presented in the international seminar are being printed in a book to be published by the University Press Limited (UPL).
PKSF published “Maps on Microcredit Coverage in Bangladesh” this year. It was the first effort of its kind in the country that showed in maps and tables district-wise coverage of microcredit programmes of Bangladesh. PKSF is updating the map to include upazila-wise coverage.
During the year, PKSF prepared a vision and strategy paper titled “PKSF: Emerging Challenges”. This document will help PKSF to charter its course of actions in the next decade.
PKSF’s success would not have been possible without the able guidance of the members of the General Body and the Governing Body; continued support of the Government of Bangladesh, specially the Ministry of Finance and the donor agencies like the World Bank, ADB, IFAD and USAID; committed efforts of the Partner Organizations (POs); dedicated services of PKSF officers and staff; and the persistent endeavor of the poor to fight poverty. I express sincere thanks and gratitude to all of them.

Salehuddin Ahmed
January, 2004...........................................................................................Managing Director

OBJECTIVES OF PKSF

PKSF is the apex funding organization of microfinance programme carried out by various microfinance institutions (MFIs) in Bangladesh. PKSF has been established for helping the poor, the landless and the assetless in order to enable them to gain access to resources for productive undertakings and/or employment and for enhancing the quality of their life. The specific objectives of PKSF are:

1. To provide assistance for generating income or employment opportunities for the landless and assetless for alleviating poverty, in various forms and manners, including financial, institutional, advisory and training, to non-government, semi-government and government organizations, voluntary agencies and societies, local government bodies, institutions, and groups of individuals as partner organizations (POs).

2. To support, promote, develop and identify employment opportunities for the poor (the landless and assetless), to provide them with credit as well as such other help and assistance including education and training as may be necessary for development of their skills.

3. To help building and strengthening the institutional capacity of the POs for improving their efforts at providing access to resources for the poor.

4. To support, promote and sponsor innovative programmes and projects for creating awareness for the improvement in the quality of life of the poor and self-reliance in the process of creating productive employment opportunities.

5. To help the poor people to diversify and strengthen their survival strategies, to enhance their security and to give them access to assets and rights and augment their self-respect providing them choice and independence.

6. To be a promoter and stimulator of innovative ideas and methods and to encourage, promote and assist efforts, which emphasize and focus on new technologies and ideas for employment creation and productive activities for poverty alleviation.

7. To initiate, undertake and promote research activities directed towards poverty alleviation and employment generation; to establish and support research and training institutions; to grant stipends, scholarships, fellowships for such research activities; to organize seminars, workshops, conferences and to undertake publication of reports, periodicals, monographs, bulletins, journals, books etc. in furtherance of the objectives of PKSF.

8. To set up an effective Management Information System (MIS) for regular and proper monitoring and evaluation of the poverty alleviation activities of the POs supported by PKSF.

9. To establish and maintain contact and collaboration with POs, other institutions, bodies and societies in Bangladesh and abroad including relevant international agencies, constituents of the UN system interested in similar objectives and to coordinate with such institutions, bodies and organizations for furthering the objectives of PKSF.

10. To undertake, sponsor, support or aid any educational, social, commercial, agricultural or industrial activities for attaining the objectives of PKSF.

11. To do all such other lawful things as are conducive and/or incidental to furthering the growth and the attainment of the objectives of PKSF.

ORGANIZATIONAL STRUCTURE

PKSF is a ‘company not for profit’ registered under the Companies Act of 1913/ 1994.
PKSF is at present structured in the following manner:

General Body Consisting of 16 members

Governing Body Consisting of 7 members

Managing Director

Officers & Staff (185 persons as on December 31, 2003)

MANAGEMENT

GENERAL BODY

The General Body is formed by 16 members out of whom the Government nominates 8 members from amongst persons associated with government agencies, voluntary organizations or private individuals renowned in the field of poverty alleviation activities. The remaining 8 members are persons from partner organizations and private persons having records of services in activities on poverty alleviation and income generation.
The General Body gives overall policy guideline and direction for the efficient functioning of PKSF. It approves the annual budget of PKSF drawn up by the Governing Body of PKSF. The names of members of the General Body of PKSF are given below:

MEMBERS OF THE PRESENT GENERAL BODY

GOVERNING BODY

The Governing Body, subject to the general control and supervision of the General Body, generally pursues and carries out the objectives of PKSF. The Governing Body is responsible for the management and administration of the affairs of PKSF. It determines the direction and scope of the activities of PKSF.

As per its Articles of Association, PKSF has a seven-member Governing Body under the general guidance of which all the activities of PKSF are undertaken. The Managing Director carries out the responsibilities of the organization as its Chief Executive. He is also a member of the Governing Body. Since he is the Chief Executive and a member of the Governing Body as well, he carries the task of liaison between the Governing Body and the management cadre.

Members of the Present Governing Body

OFFICERS AND STAFF

To execute the tasks of PKSF, a suitable structure has been devised providing for a gradual increase in the number of posts and personnel, as will be required in future, with the objective of putting together an appropriate institutional structure, professional excellence and a capable management cadre for PKSF. Under this, attempts are underway for recruiting and building up a team of committed meritorious and capable officials having the right aptitude. Gradually and over time, there will be increase in the number of personnel through gaining of experiences, increase in the workload, expansion in its operations and future needs and requirements of PKSF. PKSF’s activities and daily operations are at present carried out by 87 management staff, 73 supporting staff and 22 project staff and Associates. Besides, there are 3 part-time professionals (one legal adviser, one lawyer, one medical retainer).