[Annual General Meeting of Palli Karma Sahayak-Foundation (PKSF) 2005, presided over by Professor Wahiduddin Mahmud, Chairman of PKSF Bhaban, Decembe 28, 2005.]

Annual General Meeting 2005 of PKSF Held

The Sixteenth Annual General Meeting of PKSF, held at the PKSF Bhaban on December 28, 2005, was presided over by Professor Wahiduddin Mahmud, Chairman, PKSF.

Members of the General Body, Professor Muhammad Yunus, Begum Tahrunnesa Abdullah, Begum Rasheda K. Choudhury, Dr Iqbal Mahumud, Mr A. A. Qureshi, Begum Rokeya, Begum Rehana Parvin, Dr Nazmunnesa Mahtab and Dr Fakhruddin Ahmed attended the meeting.

Professor Wahiduddin Mahmud presented the Annual Report 2004-2005 of the Governing Body at the meeting. The highlights of the Annual Report are: during the Financial Year 2004-2005, PKSF disbursed TK. 2,203.07 million to its POs; at year-end, cumulative loan disbursement to POs stood at Tk. 16,536.89 million; and the total number of borrowers stood at 5,522,000.

During the year PKSF launched a microcredit programme for small and marginal farmers; strengthened the credit programme for monga-affected hardcore poor; and disbursed a loan to an organisation in the Chittagong Hill Tracts. During the year, PKSF emphasised the importance of microenterprise development to meet the needs of progressive borrowers. Integrating efforts in the arena of poverty alleviation, PKSF entered a tripartite venture with the World Bank and Social Development Foundation (SDF) for mitigating monga in the north.
The General Body discussed and approved the Annual Report; Audited Accounts of the Financial Year 2004-2005; and PKSF's budget for the financial year 2005-2006.

Microfinance for Small and Marginal Farmers Project Launched

Microcredit has been successful in reaching the rural poor with credit for self-employment, supporting women's empowerment and significantly contributing to poverty alleviation. Nevertheless, microcredit has only had a marginal impact in the agriculture sector as microfinance institutions (MFIs), to a great extent, limit their lending to those possessing less than half an acre of land (the functionally landless). Poor farmers' access to agricultural credit remains very limited. They are usually missed by regular credit facilities. Although small and marginal farmers are not as poor as the landless, they may be as vulnerable.

In order to provide credit and technical services to small and marginal farmers, PKSF launched the Microfinance for Marginal and Small Farmers (MFMSF) project with the financial support of the International Fund for Agricultural Development (IFAD) in June 2005. The objective is to improve the livelihoods of 210,000 poor, small and marginal farmer households by enabling them to access and utilise viable microfinance services to invest in existing and new farm and off-farm enterprises.

Such services, together with linkages to technical support, will enable them to increase agricultural production, employment generation, diversify income sources and achieve broader development goals of raising household income, reducing vulnerability, and improving food security.The US$ 29.7 million project will be implemented in 113 upazilas of 14 districts for a six-year period, starting from July 2005 for the benefit of about 210,000 marginal and small farmer households not reached by microcredit programmes.

The formal launching of the project, chaired by Dr Fakhruddin Ahmed, Managing Director, PKSF, was held at PKSF Bhaban July 23-24, 2005.

Dr Salehuddin Ahmed, Governor, Bangladesh Bank, attended the inaugural session of the launching workshop as chief guest and Mr Nigel Brett, Portfolio Manager, Asia and Pacific, Program Management, IFADEP, as special guest.

[Dr Fakhruddin Ahmed, Managing Director, PKSF (seond from right) presiding over the inaugural workshop of Microfianance for the Small and Marginal Farmers Project. (L-R) Mr Mosharrof Hossain Khan, Deputy Manging Director, PKSF; Mr Nigel Brett, Portfolio Manager, Asia and Pacific, Programme Management, IFAD; Dr Salehuddin Ahmed, Governor, Bangladesh Bank (Chief Guest); and Mr Golam Touhid, Deputy General Manger, PKSF.]

Representatives from IFAD, government departments, donor and international development agencies, PKSF and partner organisations (POs) attended the workshop.

Dr Salehuddin Ahmed described marginal and small farmers as "missing middle." He expressed his sincere appreciation to IFAD for its efforts to alleviate poverty in Bangladesh. He also emphasised the importance of backward and forward linkages in agricultural development. Mr Nigel Brett congratulated PKSF for making the project effective in a record time of only in six months. He expressed his satisfaction that PKSF has accepted the project proposal, braving a fundamental shift from the traditional focus on the landless poor.

Mr Mosharraf Hossain Khan, Deputy Managing Director, elaborated the salient features of the project.

Dr Fakhruddin Ahmed particularly lauded the strategic shift of PKSF; expressed his optimism that the project will create new credit delivery methods and mechanisms in the agricultural sector; and emphasised the importance of credit along with the provision of technical support and creation of market linkages for the marginal and small farmers.

PKSF Plan And Strategy Till 2015 Discussed at Retreat 2005

The PKSF Retreat 2005 was held during August 18-20, 2005 at BCDM, Rajendrapur in Gazipur, where six issue papers were presented and the organisational strategies of PKSF till 2015 were discussed.

Dr Fakhruddin Ahmed inaugurated the programmes in the morning of August 19. He listed the successes and achievements of PKSF and attributed these to the collective efforts of its committed officials. Mr Dewan A.H. Alamgir moderated the sessions.

The following issue papers were presented in the sessions where 103 officers of PKSF actively participated.

Microcredit Programme for the Hardcore Poor: Microcredit is yet to reach the bottom 15%-20% of the poorest population. At the present growth rate, the number of hardcore poor will increase significantly by 2015. In order to alleviate poverty, it is essential to bring this group into the microcredit programme.

The strategy of PKSF and POs, the product features, and the overall coordination of the programme were discussed.


Microcredit for Marginal and Small Farmers: The paper discusses the challenges to the programme and ways to address them.

At present, there are 6,400,000 marginal and small farmer households. The paper proposes to cover 1,000,000 people in 64 districts through 120 POs by 2015. The paper also discusses issues related to target population, product features, non-financial services, and preparedness of PKSF and POs to handle the challenges.

[Dr Fakhruddin Ahmed, Managing Director, PKSF and Mr Dewan A.H Alamgir at the Retreat 2005 of PKSF. ]

Rural Microcredit Programme: At present, there are 6.6 million members and 4.6 million borrowers under the rural microcredit programme. The paper recommends increasing PKSF's share in the market through rigorous analysis of the present status of the programme. Issues such as loan ceiling, increasing portfolio, evaluation of POs and financial liability of PKSF were discussed.

Microenterprise Loan Programme: There are about 5,000,000 microenterprises in the country that provide a large amount of employment opportunities for the people.
The paper discusses product features and strategy for expansion and preparedness of PKSF and POs.

Urban Microcredit Programme: Twenty-three per cent of the population in Bangladesh (i.e. 30.0 million people) lives in urban areas, and 43.6% of them are poor. According to an estimate of PKSF, the market size in urban microcredit is 2.79 million. The strategy to bring this large population under microcredit programmes and to tackle possible challenges in this respect were discussed. Increasing outreach of the programme in all urban areas was a major recommendation of the discussion.

Recommendations were made about targeting, product features and diversification, and preparedness of PKSF at policy and implementation levels.

Institutional Issues for Implementing Microcredit Programme: The paper deals with how to technically enable PKSF and its POs through adopting an institutional development plan up to 2015. Recommendations were also made about how to make the POs financially sustainable.

The issues addressed in the session are: the type of organisations to be enlisted; business plans; whether the POs should explore commercial ventures; the size of OOSA (Organisation Operating in Small Areas) POs; eligibility criteria of organisations to qualify as PO under BIPOOL (Big Organisation Operating in Large Area); PKSF's financing the total loan programme of the POs; internal audit methods; management of financial resources; research activities; creating a positive image of PKSF; administration and human resource development of the POs; awards for good POs; skill enhancement training for the beneficiaries; and promoting relations of PKSF with the POs.

In the afternoon of August 20, the Managing Director concluded the retreat with a brief speech expressing optimism: "The retreat has produced guidelines to solve some ongoing problems as well as guideline for the future activities of PKSF."

Activities of Microfinance for Hardcore Poor Programme

(a) The Government Allocates Tk 100 crore under the Microcredit for the Hardcore Poor Project: As in the previous financial year, the Government has allocated Tk. 100 crore to PKSF under its Microcredit for the Hardcore Poor project, recognising the performance of PKSF' under this project over the past year.
As of December 31, 2005, PKSF has disbursed Tk. 1,013.10 million to 70 POs under this programme.

(b) Monga Mitigation Initiative Pilot Program (MMIPP): PKSF has forged a tripartite collaboration with the Social Development Foundation (SDF) and World Bank to mitigate the sufferings induced by monga. The pilot project was implemented for three months from October to December, 2005.

The project consists of four components: skill development training, seed capital for the most vulnerable monga families, employment generation through community infrastructure activities, and microcredit. The three non-microcredit components involve an amount of Tk 4.59 crore for a population of 18,750.

[Mrs Parveen Mahmud, DMD, PKSF exchanging Memorandum of Understanding with Mr M. Hafizuddin Khan, MD, SDF. (L-R) Mr Abu Taher Khan, GM, SDF (firs from left); Dr MA Hakim, GM, PKSF ( second from right), and Mr AKM Nuruzzaman, Manager, PKSF, are also seen in the picture.]

The pilot was implemented in 75 villages of 15 unions under 5 upazilas in the most poverty-hit 5 districts-Rangpur, Lalmonirhat, Kurigram, Nilphamari and Gaibandha.

(c) National Seminar on Hardcore Poor: PKSF organised a national seminar entitled "Microfianance for Hard Core: Opportunities and Challenges" on August 13, 2005 in Dhaka. The speakers called for a coordinated approach among all poverty alleviation agencies and greater investment to alleviate poverty in the monga-prone areas.
Dr Kamal Uddin Siddqui, Principal Secretary to the Prime Minister, attended the seminar as chief guest and Mr Quazi Mesbahuddin Ahmed, Member, Planning Commission, as special guest, with Dr Fakhruddin Ahmed, PKSF Managing Director, in the chair. Dr Jashim Uddin, Deputy General Manager of PKSF; Mr Shahid-uz-Zaman, Executive Director of Eco-Social Development Organisation (ESDO), and Mr Rasel Ahmed Liton, Direcor, Samaj Kallyan Sangstha (SKS) presented papers during the seminar.

Professor Muhammad Yunus, Managing Director, Grameen Bank, Professor Baqui Khalily, Finance Department, Dhaka University and Mr Sazzad Zohir, Senior Research Fellow, Bangladesh Development Studies (BIDS) addressed the seminar as key discussants.

PKSF's Officials donate Blood for Thalasemia Patients

In a gesture of solidarity with thalassamia patients, 45 employees of PKSF donated blood at PKSF Bhaban on September 14, 2005.

The blood donation programme was organised by Thalassamia Hospital, a project of Bangaldesh Thalassamia Samity, Dhaka. PKSF also encourages its POs to extend similar support to the hospital and its thalassamia patients.

[Mr AQM Golam Mowla, AGM, donating blood for thalassamia patients at PKSF Bhaban. Dr Fakhruddin Ahemed, MD; Mr Mosharraf Hossain Khan, DMD; Mr Shah Alam Mridha, DGM and Mr Ataur Rahman, AGM ,PKSF are also seen in the picture]

PKSF Official Passes Away

Mr Mr A.S. Mosharraf Hossain, technical coordinator of MSSF project died in August. He was 58.

Mr Hossain is survived by his mother, wife, son and daughter. The entire PKSF family is grieved and extends its deepest sympathies to his family.

Supervision and Monitoring of Credit Programme

PKSF applies off-site and on-site techniques to monitor and evaluate the implementation of its microcedit programme by the POs.

The officers of the operations department and projects visit the programmes on a regular basis for monitoring and supervision purposes at least four times a year. If necessary, they visit the programme at the field level at any time.
The top officials of PKSF, including the Managing Director and Deputy Managing Directors, also visit the programmes at the field level.

From July to December Dr Fakhruddin Ahmed, Managing Director, visited the microcredit for Hardcore Poor programme of PKSF implemented by Society for Social Services (SSS), Tangail; Thengamara Mohila Sabuj Sangha (TMSS) and Rangpur Dinajpur Rural Service (RDRS) Bangladesh and Samaj Kallyan Sangstha (SKS), Gaibandha. Dr Ahmed also visted the microcredit programme of PAGE Development, Comilla, on September 29 and attended the inaugural ceremony of the Microcredit for the Hardcore Poor programme of the organisation. Dr Jashim Uddin, DGM, accompanied him on both occasions.

Mr Mosharraf Hossain Khan, Deputy Managing Director, visited six POs-TMSS, Gono Kallyan Trust (GKT), Uddipan, Centre for Community Development Assistance (CCDA), Village Development Foundation (VDF) and Srijoni Sangstha.

[Professor Wahiduddin Mahmud, Chairman of PKSF, visits Hardcore Poor Programme of ASOD, a PKSF partner organisation in Rangpur, on 23 December 23, 2005. Mr Taskinur Rahman, Executive Director of the organisation (second from left) and Mr AKM Nuruzzaman, Manager, PKSF (third from left) are also seen in the picture]

He also attended a rally organised by the POs to observe the UN International Year of Microcrdit 2005.
Ms Parveen Mahmud, Deputy Managing Director, visited microcredit programme for monga mitigation implemented. by seven POs-SKS, Assistance for Social Organization and Development (ASOD), People's Oriented Programme Implementation (POPI), Solidarity, RDRS, Association for Social Advancement (ASA) and TMSS to visit their microcredit programme for monga mitigation.

Mrs Mahmud visited microcredit for Hardcore Poor and PLDP-II projects of the organisations. She also visited two branches of Proshika in north Bengal on December 29-30, 2005

Credit Operations

Loan Sanction, Disbursement and Recovery

Loan Sanction to POs by PKSF

From July to December, 2005, the Governing Body of PKSF held three meetings and sanctioned loans amounting to Tk 4,566.05 million to POs, as presented in the following table:

Loan Disbursement to POs

From April to October, 2005, PKSF disbursed Tk. 1,401.70 million under its mainstream microcredit programme; and Tk. 1,450.26 million under its eleven projects.

Cumulative loan disbursement from PKSF to the POs was Tk. 23,764.05 million, as of October 30, 2005. The recovery rate of loan from the POs to PKSF was 96.31 per cent.

A summary of PKSF's loan disbursement to the POs and loan outstanding with them has been presented below:

*Mainstream Microcredit comprises: Rural Microcredit, Urban Microcredit, Hard Core Poor credit, Micro Enterprise Lending (MEL).

** PLDP=Participatory Livestock Development Project (PLDP-I), PLDP-II, TEIGP=Training, Employment and Income Generation Programme, IFADEP=Integrated Food Assisted Development Project, SRF=Socio-economic Rehabilitation Fund, FSP=Financial Services for the Poorest, PAMFP=Poverty Alleviation Micro Finance Project, MFTS=Micro Finance and Technical Support, MEL=Micro Enterprise Lending, HCP =Hard Core Poor.

Loan Disbursement to Borrowers

As of October 30, 2005, the POs of PKSF through revolving have disbursed Tk 179,257.80 million to 5.75 million borrowers of whom 91% are women. The cumulative loan recovery rate from the borrowers to the POs was 98.82 per cent.

Institutional Development Programme

From July to December, 2005, the achievements in the Institutional Development programme can be seen from the following:

i) Research

Follow-up MES Study of PKSF Microcredit Programme (FMES), conducted by Ms HB Consultant Limited, has been completed. The study, which is a follow-up to the Monitoring and Evaluation Study conducted by the Bangladesh Institute for Development Studies (BIDS), began in 2004
.
An ethnographic study was also conducted by PKSF on monga problem in the northern Bangladesh.

ii) Institutional Development Loan

PKSF provides capacity-building loans to POs at a nominal interest rate. The funds are used to purchase motorcycles, bicycles, computers, telephones, and photocopiers; and construct office-buildings-cum-training centres for achieving institutional viability.
The loan disbursement to the POs under the Institutional Development Project is presented below:

ii) Technical Support

Installation of Financial Management System (FMS) Software in the POs

PKSF assists its POs to computerise their financial management system (FMS). As of December 31, 2005, customised FMS software was installed in 101 POs.

The software has enabled the POs to maintain their accounts information system more accurately and efficiently.

Integrated MIS & AIS Software in the POs

The software is being piloted in two POs and its implementation in all POs will be started very soon. Upon completion, the POs will be able to integrate their accounting information system (AIS) and management information system (MIS). Also, a firm has been hired to develop an Oracle-based software for the analysis of PO monthly reports.

Credit Bureau Database

PKSF has prepared a credit bureau database to maintain information about the microfinance institutions and microcredit borrowers of the country. Pilot tests for implementation of the software have already begun.

iii) Seminar/Workshop

From July to December, 2005, PKSF organised nine workshops/seminars on various issues.

* A national seminar entitled "Microfinance for Hardcore Poor: Opportunities and Challenges" and a launching workshop for Mcirofinance for Small and Marginal Farmers Project were organised.

* A workshop was organised on a manual prepared to assess the impact of microcredit in changing socio-economic condition of microcredit borrowers on November 27, 2005.

* The PLDP-II of PKSF organised two workshops.

[Members of a delegation from Eritrea listening to Dr MA Hakim, General Manager, PKSF, during an exposure visit to PKSF]

* The FSP project organised two workshops: "Comparative Study of Microfinance Programes of PKSF (FSP), BRAC, Plan International and Grameen Bank for the Poorest"
on December 19, 2005; and "Impact Evaluation of the Financial Services for the Poorest Project" on July 25, 2005.

* The MFTS project organised two workshops: "Bangladesh IFAD Country Programme Evaluation" in July and the "Scaling-up the Financial Services for the Poor in Bangladesh" in November.

iv) Training Programme

PKSF Officials’ Training Abroad: PKSF sent 25 officials of different levels for training on different subjects in Thailand and the Philippines.

The training courses included: basic management at the Asian Institute of Management (AIM), Philippines, from August 8 to 26, 2005; development and production of learning packages from August 15 to September 20; SME development and management for local products from September 26 to October 14; project monitoring and evaluation from November 07 to 25; and rural agribusiness development and extension techniques from November 7 to November 25, 2005 at the Asian Institute of Technology (AIT), Thailand.

As well, two officers attended a workshop entitled “Train the Trainers” of Microfinance Management Development Programme at AIM, Philippines from October 10 to 14, 2005.

Exposure-cum-Study Visit Abroad: Chief executives of five POs led by an Assistant General Manager of PKSF attended an exposure/study visit at Bank Rakayet Indonesia (BRI), from November 24 to 30, 2005.

People from Abroad Visit PKSF: Fourteen persons from three countries visited PKSF from June to December, 2005. A three-member team from the Ministry of Agriculture, Zambia, came to PKSF on October 2; a seven-member team from Savings and Microenterprise Programme, Eritrea, came on October, 24; and another three-member team from GTZ, Sri Lanka and one person from NDTF, Sri Lanka, came to visit PKSF on December, 2005.

PKSF-organised Training for PO Staff: During the period from July to December, 2005 PKSF provided training to 1,652 officials and staff of its POs under different courses.

The progress of PKSF’s training programme for the POs is summarized below:

Human Resources

From July to December, 2005, the following persons have joined PKSF in different positions:

Mr Md Ashraf Ali has joined as Technical Coordinator in the Microfinance for Marginal and Small Farmers (MFMSF) Project of PKSF.

Mr Haron or Rashid has joined as Monitoring Evaluation and MIS Specialist in the PLDP-II of PKSF. Mr Md Touhidul Islam, Mr Ahmed Mahmudur Rahman Khan, Mr Md Naser Reza, Mr Md Golam Rabbany, Mr Md Sanjay Kumar Ray and Mr Md Hasanur Rahman have joined in the position of Field Monitoring Officer in the project.

Mr Md Nurul Haque and Mr Md Imrul Haque have joined as Book Keeper and Ms Rita Begum as Computer Operator in the PLDP-II of PKSF.

Mr Joy Sankar Banik has joined as Project Associate (Microenterprise) in PKSF.

Mr Md Nasir Uddin has joined as Assistant Manager (Law) in PKSF.

Observance of the UN International Year of Microcredit 2005

The Honourable Prime Minister Begum Khaleda Zia inaugurated the Observance of the UN International Year of Microcredit 2005 in Bangladesh on January 15, 2005 . As the focal point of the observance in Bangladesh, PKSF organised the ceremony.

From July to December, 2005, the following activities in relation to the observance of the international year were accomplished:

1) Posters, leaflets, stickers were widely distributed;

2) diaries bearing the logo of the International Year of Microcredit 2005 were published;

3) periodicals on microcredit and a report on the inaugural ceremony of the international year were published;

4) profiles of successful microcredit programmes and articles on microcredit were published in newspapers;

5) press conferences, rallies, theatres, cultural programmes, round-table discussions and essay competitions were organised;

6) talk shows on microcredit were aired on various television channels;

7) documentary film and docu-fiction were produced for airing on the electronic media; and

8) desk calendars, mugs and posters bearing slogans related to the international microcredit year were produced and distributed.

PKSF has arranged a microcredit fair and a ceremony to award some of its successful POs for their outstanding performance during February 4-5, 2005. The Honourable Prime Minister of the People's Republic of Bangladesh Begum Khaleda Zia has kindly consented to grace the ceremony as the Chief Guest.

[Shamima Begum (centre), a microcredit borrower of Nowabenki Ganomukhi Foundation, a partner organisation of PKSF, won the Global Microenterpreneurship Award 2005 sponsored by the United Nations. (L-R) Mr Lutfor Rahman, Executive Director of the PO (first), Mr Akond Md Rafiqul Islam, Assistant General Manager (third), PKSF and Mr Lutfor Rahman, Assistant Manager (fourth), PKSF were also present]

New Partner Organisations of PKSF

PKSF has accepted four NGOs as new POs from July to December, 2005. A brief profile of each organisation is provided below:

1) National Development Program (NDP), Sirajganj: The organisation was established in 1992 as a voluntary organisation in Sirajganj and registered with the Social Welfare Department the same year. The organisation was accepted as a PO at the 133rd meeting of the Governing Body of PKSF. Mr Md Alauddin Khan is the chief executive of the organisation.

2) Sajida Foundation, Dhaka: The organisation was established in 1987 as a voluntary organisation in Dhaka and registered with the Joint Stock Company in 1991 and with the Department of Social Welfare in 1994. The organisation was accepted as a PO at the 133rd meeting of the Governing Body of PKSF. Begum Zaheda Fizza Kabir is the chief executive of the organisation.

3) Young Power in Social Action (YPSA), Chittagong: The organisation was established in 1985 as a voluntary organisation in Chittagong and registered with the Department of Social Welfare in 1989, Joint Stock Company in 2004 and with the NGO Affairs Bureau in 1995.
The organisation was accepted as a PO at the 135th meeting of the Governing Body of PKSF. Mr Arifur Rahman is the chief executive of the organisation.

4) Manab Mukti Sangstha, Sirajganj: The organisation was established in 1984 as a voluntary organisation in Chittagong and registered with the Department of Social Welfare in 1985 and with the NGO Affairs Bureau in 1990.
The organisation was accepted as a PO at the 135th meeting of the Governing Body. General Secretary Mr Habib Ullah Bahar is the chief executive of the organisation.

Some relevant data of the four new partner organisations are presented in the following table: