“I strongly feel that we can create a poverty-free world. Basic ingredient of overcoming poverty is packed inside each poor person. All we need to do is to help the person to unleash this energy and creativity. Once this can be done, poverty will disappear very fast. Only place in the world where poverty may exist will be in the poverty museums, no longer in human society.” ~ Professor Muhammad Yunus	[President Professor Iajuddin Ahmed administers the oath of office to Dr. Fakhruddin Ahmed as Chief Adviser to the non-party caretaker government at Bangabhaban on 12 January 2007.]
	PKSF Extends Most Heartfelt Congratulations to Nobel Laureate Professor Yunus Professor Wahiduddin Mahmud, Chairman, PKSF on behalf of the PKSF Governing Body, the officers and staff of PKSF congratulated Professor Muhammad Yunus on his receiving the 2006 Nobel Peace Prize. The choice of Professor Yunus for the Nobel Peace Prize is a recognition of his outstanding contribution to poverty alleviation through his unique innovation of the concept and practice of banking for the poor and it also highlights the interlinked nature of poverty alleviation and global peace. Professor Yunus played a pivotal role in the creation of PKSF. As a member of the Governing Body and the General Body of PKSF, he has been making a highly significant contribution to the growth and development of PKSF since its inception in 1990.

PKSF Managing Director Dr. Fakhruddin Ahmed Becomes Head of Caretaker Government

Dr. Fakhruddin Ahmed, Managing Director of PKSF, has become the Chief Adviser of Caretaker Government of Bangladesh. He was sworn in as the Chief Adviser on 12 January 2007.

Dr. Ahmed started his career as a lecturer of Economics at Dhaka University. Later, he joined the civil service of Pakistan. He served the government until 1978 when he joined the World Bank where he served until 2001. He had been the Governor of Bangladesh Bank before he joined as the Managing Director of PKSF on 01 June 2005. All Officers and Employees of PKSF are pleased to convey their warmest congratulations to Dr. Fakhruddin Ahmed and wish success in his new assignment.


Annual General Meeting 2006 of PKSF Held

The seventeenth Annual General Meeting of PKSF, held at the PKSF Bhaban on November 30, 2006, was presided over by Professor Wahiduddin Mahmud, Chairman, PKSF. The members of the General Body Dr. Iqbal Mahmood, Mr. Badiur Rahman, Mr. Rafiqul Islam, Begum Tahrunnesa Abdullah, Professor Ahmed Kamal, Dr. Hossain Zillur Rahman, Dr. Nazmunnesa Mahtab, Begum Rokia A. Rahman, Begum Rokeya, Begum Rehana Parvin and Dr. Fakhruddin Ahmed attended the meeting.

[Annual General Meeting of PKSF presided over by Professor Wahiduddin Mahmud, Chairman of PKSF, at PKSF Bhaban on November 30, 2006.]

Professor Wahiduddin Mahmud presented the Annual Report 2005-2006 of the Governing Body at the meeting. The highlights of the Annual Report are: (a) during the financial year 2005-2006, PKSF disbursed Tk. 6,926 million as against Tk.3,660 million in fiscal year 2004-2005, the growth being 89%; (b) cumulative loan disbursement to POs stood at Tk. 29,061 million at the year-end; (c) revolving the PKSF fund, the POs disbursed an amount of Tk. 220,718 million which is more than 7½ times of the fund provided by PKSF; (d) PKSF fund benefited 6.78 million borrowers, 90 % of whom are women; (e) there has been substantial growth of total disbursement in both mainstream programme (77%) and projects (127%) in FY 2005-2006 over FY 2004-2005; (f) among the credit components under the mainstream programme the highest growth (143%) was in urban microcredit followed by microenterprise (119%); (g) the Institutional Development (ID) component has also registered very high growth (142%); (h) the increase/growth in disbursement has been achieved without the participation of BIPOOL POs in both mainstream programme and projects in FY 2005-2006, only Tk. 40 million was disbursed to a BIPOOL PO.

The loan disbursement status under mainstream programme and under the different projects is presented below:

Disbursement under Mainstream Programme( In Million Taka)

* Disbursement includes both PKSF’s mainstream funds and GOB funds.

Disbursement under Projects ( In Million Taka)

In order to further augment its poverty alleviation role, PKSF, in FY 2005-2006 implemented its programme with added thrust covering credit and capacity building activities. As a result, microcredit program achieved substantial growth in three interrelated areas viz., expansion, deepening and diversification. PKSF’s microcredit programme was expanded covering (a) non-PKSF programmes of its POs; (b) hitherto bypassed ultra poor specially those living in the monga-affected areas and other marginal and disadvantaged locations; and (c) the urban poor in the four metropolitan cities of the country. PKSF’s programme has been deepened increasing average loan size in general and providing substantially larger loans to progressive microcredit borrowers under microenterprise and seasonal loan programmes and to borrowers under the different livestock-based specialized projects, in particular.

PKSF’s Initiative to Monga Mitigation

PKSF has launched a special programme named Programmed Initiative for Monga Eradication (PRIME) for mitigating monga that occurs in the northern districts of the country. PRIME provides support to monga affected people through 6 organizations in Lalmonirhat district. The support includes (a) lean season employment through setting up of labor intensive small and cottage industries and development of local infrastructure such as construction or reconstruction of roads, dams, elevation of land for the mosques or schools etc. by engaging the affected poor people; (b) disaster mitigation and consumption loan; (c) other safety-net assistance. So far 30,995 people have been engaged in the labor-intensive development activities and Tk.3.92 lac has been disbursed among the affected poor people. An initiative has been taken to develop a poultry village under this programme.

Seasonal Loan: A Milestone in Microcredit Lending

The high demand and the consequent high disbursement of the seasonal loan in the last six months from its initiation as one of the loan products of PKSF’s core programme instead of a pilot program, represents a milestone in an attempt to the diversification and expansion of microcredit programme. So far a beneficiary had to carry out the installments of the loan through the whole year round that s/he obtained in a particular season. At present the member can borrow and repay the loan at that particular season. So neither the members are being kept waiting for a loan in a particular season nor the members are keeping a portion of the total loan fund idle in the off-season in between. Following a crop calendar PKSF has disbursed a loan amounting Tk. 379.7 million up to December 2006 as seasonal loan in farming activities; such as in crop production, vegetable cultivation, beef fattening and fisheries etc. PKSF’s experience demonstrates a viable lending in crop sector. Considering the risk in agricultural lending PKSF is exploring the possibilities of crop insurance policy to cover the risk.

[Seasonal Loan for agricultural activities is a milestone of PKSF’s microcredit programme.]

Active Participation of PKSF at Microcredit Summit 2006 Held in Halifax

The Global Microcredit Summit was held during November 12-15, 2006 in Halifax, Nova Scotia, Canada. Dr. Fakhruddin Ahmed, the Managing Director and Mrs. Parveen Mahmud, Deputy Managing Director, along with other officials of PKSF joined the summit. Dr. Ahmed, the Managing Director of PKSF and Ms. Mahmud, the Deputy Managing Director of PKSF attended the summit as resource persons of plenary session and associate session and presented papers at the summit titled “Microfinance Program of PKSF-Action Plan for 2006-2007``and on “Governance: Organizing, Developing and Empowering the board to Oversee the MFI`` respectively. The other officials of PKSF attended the summit are Mr. Md. Golam Touhid, DGM; Dr. Md. Jashim Uddin, DGM; Mr. Md. Hasan Khaled, DGM; Mr.A.Q.M. Golam Mawla, AGM. and Mr. Md. Ziauddin Iqbal, AGM. A large number of Partner Organizations (POs) Chief Executives and officers also attended the summit. More than 2,000 delegates from 112 countries gathered at the summit to assess progress toward the Summit’s goal of reaching 100 million poorest families and to launch the second phase of the campaign with two new goals for 2015: 1) reaching 175 million of the world’s poorest families with microcredit, affecting 875 million family members and 2) ensuring 100 million families rise above the US$1 a day threshold, lifting half a billion people out of extreme poverty. This is a challenge to the microfinance movement in Bangladesh and around the world.

PKSF Enhances Supervision and Monitoring of Credit Programme

The supervision and monitoring activities of PKSF have been further enhanced with the expansion and diversification of the microcredit programme. Following a tour calendar, PKSF officers visit the POs regularly every three months and submit the tour report to the management and share their main observations with others.

During on-site monitoring, PKSF officers provide POs with hands-on technical advice to improve programme quality. Follow-up actions are taken both at PKSF and PO level on findings during the field visits.

[Dr Fakhruddin Ahmed, Managing Director of PKSF presiding over a view-exchange meeting on15 July 2006 at Barishal. Mr Mosharraf Hossain Khan, Deputy Managing Director and Mr. Muhammad Hasan Khaled, DeputyGeneral Manager of PKSF were also present at the meeting.]

The members of the senior management team have also increased the on-site monitoring visits. From July to December 2006, Dr. Fakhruddin Ahmed, the Managing Director, visited 9 organizations in different parts of the country. He visited different microenterprises and income generating activities of the microcredit borrowers and talked to them. He also visited the social development projects of the POs.

[ Dr Fakhruddin Ahmed, Managing Director, is visiting a handloom project of a beneficiary of Village Education Resource Center, a partner organization on 19 August 2006. Mr. Muhammad Hasan Khaled, DGM is accompanying him. ]

Mr. Mosharraf Hossain Khan, Deputy Managing Director and Ms. Parveen Mahmud, Deputy Managing Director made a number of fields visits during the period. During these visits, they exchanged views with PO officials and borrowers that helped better understanding of many issues.

Training/ Workshop / Study Visit

PKSF has formed an advisory committee comprising of 11 members with Dr. Fakhruddin Ahmed, the Managing Director, as the chairman to advise the training wing to make PKSF’s training programme more dynamic and effective. Following the advice of the committee the training wing has taken initiatives to conduct a fresh training need assessment (TNA) study, revise the training modules, determine the selection criteria for the trainers, prepare a training calendar etc. The training wing conducts training courses on different aspects of microcredit programme management for PKSF and for its POs and for other organizations at home and abroad. During the time span of July to December 2006, PKSF organized a number of training courses mentioned below:

Training on Business Plan for Microfinance Programme

PKSF organized a training course on ‘Business Plan for Microfinance programme’ from August to November 2006. The training course had been conducted in 9 batches covering 232 mid/high level staff from117 POs of PKSF.

Training on Microcredit Management

A group comprising of 51 Socio-Economists and Sociologists of Second Small Scale Water Resource Development Project (SSWRDSP) of the Local Government Engineering Department (LGED) participated in a training course on ‘Microcredit Management’ during July-August 2006.

[Dr M. A. Hakim, General Manager (Administration) is distributing the certificates among the participants after their successful completion of the training on ‘Microcredit Management’.]

Inter-PO Study Visit

PKSF organized a day long ‘Inter-PO Training cum Study Visit’ on ‘Beef Fattening’ on August 2006 for 12 dealing officers and chief executive officers and other senior management officers of 21 POs at Center for Community Development Assistance (CCDA), Comilla.

Training on Monthly Report Analysis

PKSF organized a training course on ‘Monthly Report Analysis’ from September 22 to 23 and 29 to 30, 2006. The training course was participated by 341 MIS personnel from133 POs of PKSF.

[A portion of the participants of the training course on ‘Microcredit Management’ from Local Government Engineering Department (LGED) are seen at the training room of PKSF Bhaban.]

Outsourced Training for PO Staff

PKSF organized training courses on "Group Dynamics and Microcredit Management" for 106 Field Workers of 28 POs at the training centers of DESHA, Kushtia; BDS, Barishal ; GUP, Madipur; SSS, Tangail and Dabi Moulik Unnayan Shangstha, Naogaon. The training was conducted during the month of September to December 2006.

Training on Microenterprise

PKSF organized a training course on ‘Microenterprise’ from December 10 to 12, 2006.The training course was participated by 23 mid level staff from18 POs of PKSF.

Pre-Service Training

PKSF conducted a Pre-service training course for the newly recruited receptionists of PKSF during August12-13, 2006.

Training and Conference Abroad

Mr. Fazlul Kader, Deputy General Manager (Operations) and Mr. Abdul Matin, Assistant General Manager (System), participated at a training course on ‘Micro Finance Solution eMerge’ in India, during November 13-19, 2006 along with 4 other participants from 2 POs of SDI and BASA.

Mr. A.K.M. Nuruzzaman, Manager (Operations) attended an International Conference on ‘Micro Health Insurance’ held in India, during November 1-2, 2006.

Workshop

PKSF organized a workshop on September 7, 2006 on `Rehabilitation of Non Motorised Transport Pullers and Poor Owners Project’ at the conference center of PKSF. The workshop was presided over by Dr. Fakhruddin Ahmed, the Managing Director of PKSF. Other senior management officers of PKSF, the representatives from the World Bank and 15 participating POs of PKSF, attended the workshop.

New Projects to be Implemented

PKSF is expecting to start implementation of some new projects in the year 2007. The projects are:

i) Microfinance Intervention for Food Security for Vulnerable Group Development (FSVGD) and Ultra-poor Beneficiaries: PKSF has signed the contract of the three years project to be started from January 2007 with European Commission (EC). According to the contract, PKSF will extend ultra poor credit support to the POs for expansion of Ultra Poor Programme to Food Security for Vulnerable Group Development (FSVGD) beneficiaries while EC will provide capacity building support to PKSF and POs staff including most vulnerable beneficiaries. The total budget of the project is 3.5 million Euro.

ii) Rehabilitation of Non-Motorized Transport (NMT) Pullers and Poor Owners (RNPPO) Project: Under the project PKSF would support the NMT Pullers and Poor Owners who have been affected by the ban on the NMTs in some roads of Dhaka city. The project would be undertaken for a period of two years.

iii) Rural Electrification Development Program: A memorandum of understanding (MOU) has been signed between DFID and GOB to implement the project. The project will be implemented in two phases- Pilot Phase and Program Phase. The budget of the project is about US$ 14 million. The project beneficiaries will obtain two types of loan - a loan for electricity connection from Rural Electrification Board and the other loan for any IGA. The project will be implemented after the approval of the Ministry of Finance (MOF).

iv) Livelihood Restoration Programme: Under the project, funded by IDA, PKSF would support the flood/ monga/man-made disaster affected poor people.

v) Promoting Financial Services for Poverty Reduction (PROSPER) program with DFID support.

New Partner Organization (PO) of PKSF

At present, the number of POs of PKSF is 219. These POs are working throughout Bangladesh. PKSF expects to include areas sparsely populated or with exceptional and difficult situation which are still out of microcredit programme. So PKSF encourages the inclusion of the MFIs working in the areas that had hitherto been out of the microcredit operation and the areas with less microcredit operation as its POs.

During the period from July to December 2006, PKSF has included one Microfinance Institution (MFI) as its PO that works in Narail. The profile of the organization is presented below:

Narail Ashar Alo Foundation, a voluntary social services and development organization of Narail district has been accepted as a PO at the 141st Governing Body Meeting of PKSF. The organization was registered with the Joint Stock Companies and Farms in May 1995. The working area of the organization covers 70 villages of 12 unions under Sadar and Lohagora upazilas of Narail district and Kashiani upazila of Gopalganj district. The organization had a loan outstanding of Tk. 9.75 lac at the field level and had a total of 483 members in 25 groups under its microcredit program at the time of its inclusion as a PO of PKSF. The organization has disbursed an amount of Tk. 19.67 lac. The loan recovery rate of the organization was 99%. The Secretary of the Executive Committee Mrs. Afroza Khatoon is the Executive Director and CEO of the organization.

Credit Operations Status of PKSF

Loan Sanction to POs by PKSF

The Governing Body of PKSF held three meetings and sanctioned loans amounting to Tk. 8,794.8 million to POs from July to December, 2006, as presented in the following table:

Loan Disbursement to POs

PKSF disbursed Tk. 1,697.25 million under its mainstream microcredit programme and Tk. 1,169.72 million under its projects from July to September 2006.

Cumulative loan disbursement from PKSF to the POs was Tk. 31,928.28 million, as of September 30, 2006. The recovery rate of loan from the POs to PKSF was 96.42 per cent.

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

* Mainstream Microcredit comprises: Rural Microcredit, Urban Microcredit, Ultra Poor credit, Micro Enterprise Lending (MEL), Seasonal Loan, Participatory Livestock Development Project (PLDP- I)

** PLDP=Participatory Livestock Development Project (PLDP-1I), TEIGP=Training, Employment and Income Generation Program, IFADEP=Integrated Food Assisted Development Project, SRLP=Socio-economic Rehabilitation Loan Program, FSP=Financial Services for the Poorest, PAMFP=Poverty Alleviation Micro Finance Project, MFTS=Micro Finance and Technical Support, MEL=Micro Enterprise Lending, UPP=Ultra Poor Program, MFMSF= Microfinance for Marginal and Small Farmer, ID= Institutional Development.

Loan Disbursement to Borrowers

As of September 30, 2006, the POs through revolving the amount provided by PKSF have disbursed Tk. 244,491.4 million to 7.05 million borrowers of whom 91% are women. The cumulative loan recovery rate from the borrowers to the POs was 99.04 per cent.


PLDP II Project Review Mission Visits PMU at Rangpur

A project review mission comprising of Mr. Arun Kumar Saha, Project Implementation Officer/ Mission Leader and Mr. Md. Rafiqul Islam, Project Implementation Officer, Mr. M. Nazmul Alam, Project Analyst visited Project Management Unit (PMU) at Rangpur from 9 to 18 December 2006 to review implementation progress for the project. The mission held meetings with concerned officials of PKSF, Department of Livestock Services (DLS) and Ministry of Fisheries and Livestock.

Microcredit Fair to be Held in March ’07

The Microcredit Fair, the first of this kind in the country, held on February 4-5,2006 had drawn attention from a vast people related to the sector and other enthusiastic people. This enormous response has encouraged PKSF to arrange another Microcredit Fair, which is going to be held on 5-8 March 2007 at the Bangladesh-China Friendship Conference Center. A collection of about 131 stalls of PKSF POs and Non-POs will display the products of the microcredit beneficiaries.

Member of Parliament of UK and British High Commissioner Visits PKSF

Rt.Hon Stephen Timmis MP, UK, Chief Secretary to Treasury and H M High Commissioner Anwar Choudhury, British High Commission, Dhaka, visited PKSF on 1 October 2006 along with a team.

They attended a meeting with high officials of PKSF to learn about the role of PKSF in the microfinance industry and microfinance in Bangladesh. They also visited Village Education Resource Center (VERC), a partner organization of PKSF in Savar, Dhaka.

[Rt.Hon Stephen Timmis MP, UK, Chief Secretary to Treasury (fourth from right) and H M High Commissioner Anwar Choudhury, British High Commission, Dhaka, (third from right) visit microcredit program of Village Education Resource Center (VERC), a partner Organization at Savar, Dhaka and Mr. Muhammad Hasan Khaled, DGM, PKSF (second from left) is also seen.]

InM Starts Functioning

The Institute of Microfinance (InM), which was set up under PKSF’s initiative in FY 2005-2006, started functioning with the appointment of Professor M. A. Baqui Khalily as its Executive Director on 8 November, 2006. InM, through its training, research and development (R&D) programmes, will help build the capacity of microcredit providers, including PKSF POs.