Poor friendly creative & innovative projects are situated scattered way all over the country of Bangladesh. These kinds of innovative projects do not able to show its potentiality due to lack in proper guidance. It has not seen yet to take initiatives to consolidate these types of scattered innovative projects. PKSF expect that these innovative projects can create and contribute huge in SME, which will instigate productivity of the poor and generate huge employment.

PKSF, from its inception, has been working with its partner organization to alleviate poverty and to generate self-employment opportunity through "Rural microcredit (RMC)". Based on the experiences and realistic demand from the field level operations, PKSF has introduced "Urban microcredit (UMC)" for urban poor, "Micro enterprise (ME)" for the moderate and graduate microcredit members and "Microcredit for ultra poor (UP)" specifically for those who have departed from conventional microcredit programme. In the last couple of years considering the realistic demand of some economic activities, PKSF has diversified its microcredit operations to seasonal microcredit, microcredit with technical support for livestock development and microcredit with technical support for small and marginal farmers projects.

Create Fund for innovative projects:

From the experience gained at the field level operations of PKSF and its partner organizations (POs) show that, in some areas, innovative projects are able to expand microcredit services. Partner organizations (POs) of PKSF are very much enthusiastic to take these innovative initiatives but due to risk and other constrains they cannot come up.

This has became a challenge to the PKSF and its partners to go beyond traditional credit program and trigger innovation in the micro financial service sector, gain experience from pilot implementation and finally expand viable enterprises through broad based replication of the successful innovative enterprises to alleviate overall poverty of the country.

In this context, PKSF has created a fund named "Learning & Innovation Fund to Test New Ideas (LIFT)" of Tk.100 million to enhance innovative enterprises.

Some of the major characteristics have been identified of these projects:

i. These projects are totally different and new from the regular microcredit.

ii. MC members will be benefited directly/indirectly from these projects. Beside the MC members, non-MC member but poor may also benefit from these projects.

iii. These projects must be environment friendly.

iv. These projects should be labor intensive to create additional wage labor.

v. Ownership of these projects may gradually hand over to the poor.

Objectives of the fund:

i. to expand the MC services.

ii. to diversify poor friendly creative & innovative project.

iii. to create enabling environment for MC members.

iv. to act as a support service to face special situations by the ultra poor.

v. to create employment in the disaster/lean/Monga period.

This fund will provide financial assistance for poor friendly projects.

Types of financing:

a. PKSF may finance in innovative project in three ways:

i. Subsidized loan, maximum 1% rate of interest,

ii. Grants and

iii. Equity participation.

b. PKSF will finance maximum 70% of the total budget of the project.

c. PKSF may allocate maximum Tk.5.0 million for each of the project under LIFT programme.

d. The amount may disburse by more than one installment.

Organizational eligibility and application procedure:

a). LIFT cell and Operations department of PKSF will promote committed POs/non-POs to take initiative under LIFT fund or identify the existing innovative works and pursue them to apply to PKSF for the LIFT fund.

b). In case of PO: Partner organizations of PKSF will be able to get fund from LIFT programme. In this case, PO should have minimum 2000 member and more than TK. 2.5 million as surplus from microcredit operations or may able to cross subsidized that amount of money.

c). In case of non-PO: Non-PO may eligible to get fund for special innovative works under equal equity participation funding approach from this programme. In this case, a memorandum of understanding (MOU) must need to be signed between PKSF and non-PO.

Management information system (MIS) tools and accounts keeping:

a). At PKSF Level: Accounts department will preserve all accounts for this fund and inform the management or board of PKSF about the update information of the programme bi-annually. MIS department of PKSF will also preserve information separately and will inform the management update data on monthly basis about the LIFT programme.

b). At Enterprise level: Enterprise organizations will use MIS tools and accounts keeping as per PKSF suggestions and in every month organization will send updated report to PKSF. In addition to this, Projects under LIFT programme will preserve data on case to case basis according to the nature of the project.

Fund management and monitoring system:

a). LIFT cell will coordinate this fund operation.

b). The project proposal from the POs of PKSF will be primarily assessed by the respected panel of Operations department of PKSF with the help of the LIFT cell and will take necessary steps to present the proposal in front of the LIFT committee. Respected panel will take all necessary steps for fund disbursement and regular monitoring the approved project.

c). LIFT cell will complete all steps regarding project assessment, project agreement signing, release fund and monitoring the approved projects of the non-PO.

d). Conditions for different LIFT projects may be differ on case-to-case basis, which should be incorporated in the agreement. Different risk will be incorporate in the agreement. Implementing organization will always try to manage risk related to this programme. If any project will damage PKSF may share this loss with the entrepreneur organization.

e). PKSF will bare all cost related to operate LIFT programme.

f). Audit department of PKSF will make audit to the projects under LIFT programme.

g). If needed, PKSF may hire consultants. In addition to this, PKSF may arrange exposure/study visit to share experiences.

h). As this type of funding is very much new to PKSF, so project application system, appraisal system, monitoring system, etc. will be done through learning by doing approach.

Monitoring, Impact analysis and replication/up scaling of the funded project:

a). Project, whether successful or not, will be analyzed by the evaluation criteria and process which will approved by the LIFT committee and formulate a policy. In addition to this, time-to-time, PKSF may evaluate the project by the external organization. Respected projects implementing organizations will send evaluation report as described below:

i. Bi-annual/annual progress report about impact on key indicators of an on going project.

ii. Project completion report.

b) PKSF will take initiative to replicate/up scaling the projects those are successful in microcredit and microcredit borrower perspective.

Initiative for smooth operations of the fund:

1) Established LIFT committee and LIFT cell: By this time PKSF has already set up a LIFT committee with the senior management of PKSF. LIFT committee will make decision after the assessment of those projects passed the primary assessment. PKSF has already set up a LIFT cell. External experts about assessing the applications under LIFT programme may have access to LIFT cell.

2). Fund Policy, workflow and work span: PKSF has already formulated LIFT policy. In addition to this, PKSF has made a workflow and work span for LIFT committee and LIFT cell to operate LIFT fund transparent, accountable and smooth.

Current status of LIFT fund:

LIFT cell has formally launched since July 2006. Within 2 months, 25 project proposals have been received from POs and non-POs under LIFT programme. Among those proposals, 13 of them will act to support enabling environment for poor and 9 of them will generate high employment. In addition to this, around 10 potential project proposals are waiting from different PO and non-PO.

Potential innovative and creative projects are describe below:

1. Quality Seed Storage & Distribution Project.

2. Healthy Dry Fish Production.

3. Primary Health Care.

4 . Poverty alleviation with Goat Farm.

5 . Introduction of “Rice Bank”.

6 . Poor friendly Fish Culture & Hatchery Project.

7 . Seed Bank through Tissue Culture Technology.

8 . Milk Pasteurization Center.

9 . Mini Garments Industry.

10 . Poverty reduction through Plastic Pipe Industry.

11. Fish Hatchery.

12. TMSS Innovative Poultry Expansion Project (TIPP)-Incubator Industry.

13. Mini Jute Mill.

14. Shrimp Cultivation by Mixed Process.

15. Poultry feed & Fish Meal Industry.

16. Quality Seed Production.

17. Establishment of Rural Tele Center.

18. Compost Making from Peri-urban Solid Waste.

19. Enhancing Sustainable Efforts of Poverty Reduction through Ecological Sanitation.

20 . Production of Nata-De-Coco from Coconut.

21. Jatropha plantation and production of bio-diesel.

22. Production of Coconut Coir Yarn.

23. Microcredit for over the year round as working capital.

For detail information-

Contact Persons

Dr Jashim Uddin
Deputy General Manager
Team Leader, LIFT Cell, PKSF.
PKSF Bhaban, Dhaka, Bangladesh.
Tel: 880-02-9140056-59, Ext-1005, 880-02-8110697 (Cell #01711839443)

Dr. AMM Zowadul Karim Khan
Project Coordinator (LIFT)
PKSF Bhaban, Dhaka, Bangladesh.
Tel: 880-02-9140056-59, Ext-1229,Cell #01712010029