PKSF MANAGING DIRECTOR DR. SALEHUDDIN AHMED
APPOINTED BANGLADESH BANK GOVERNOR

The Government of the People's Republic of Bangladesh appointed Dr. Salehuddin Ahmed, Managing Director of PKSF, as Governor of the Bangladesh Bank from May 2, 2005.

PKSF officers and staff accorded a farewell reception to Dr. Ahmed on May 15, 2005. Among others, Mr. Mosharrraf Hossain Khan and Ms. Parveen Mahmud, Deputy Managing Directors; Dr. M.A. Hakim, General Manager; Mr. Md. Fazlul Kader, Mr. Golam Touhid and Dr. Md. Jashim Uddin, Deputy General Managers; Mr. Muhammad Hassan Khaled and Mr. Md. Ataur Rahman, Assistant General Managers spoke on the occasion

The speakers gratefully acknowledged the significant contribution of Dr. Salehuddin to the overall progress and development of PKSF.

Dr. Ahmed shared some fond memories of his career with PKSF and wished unhindered progress for the institution. He also extended thanks to the entire staff of PKSF for the cooperation he received during his tenure as Managing Director.

Among others, family members of the outgoing Managing Director were present on the occasion.

DR. FAKHRUDDIN AHMED
TAKES OVER AS MANAGING DIRECTOR OF PKSF

Former Governor of Bangladesh Bank, Dr. Fakhruddin Ahmed has been appointed Managing Director of Palli Karma-Sahayak Foundation (PKSF) with effect from June 1,2005. Prior to his appointment as Governor of Bangladesh Bank, he held senior positions at the World Bank from 1978 to 2001.

Dr. Ahmed started his career as a Lecturer in Economics at Dhaka University. Later he joined the Civil Service of Pakistan and served the Government in various capacities until 1978. He holds a Master’s Degree in Development Economics from Williams College, U.S.A; and a Doctorate Degree in Economics from Princeton University. He stood First Class First in both B.A (Hons.) and M.A. in Economics at Dhaka University in 1960 and 1961 respectively.

On his first day at PKSF, Dr. Ahmed was accorded a reception which was addressed by PKSF’s Governing Body Chairman Professor Wahiduddin Mahmud and PKSF’s senior officers Mr. Mosharraf Hossain Khan, and Ms. Parveen Mahmud, Deputy Managing Directors; Dr. M. A. Hakim, General Manager (Administration); and Mr.Md. Fazlul Kader, Deputy General Manager.

PKSF senior officers welcomed the new Managing Director Dr. Ahmed and assured him of their full cooperation and support in discharging his responsibilities. Prof. Wahiduddin Mahmud, in his address, stated that PKSF’s status and image was enhanced as a result of Dr. Ahmed’s joining the PKSF. He assured full support of the Board to Dr. Ahmed to carry out his responsibilities. Dr. Ahmed, in his address, said that he was very happy to join PKSF family and assured the PKSF chairman and all officers and staff that he would do his utmost to serve PKSF to achieve its goal of poverty alleviation.

PKSF INTENSIFIES MICROCREDIT PROGRAMME FOR HARDCORE POOR

To extend the coverage of its microcredit programme to include the poorest segment of the population, PKSF launched, in early 2001, Mircrocredit for the Hardcore Poor under its mainstream credit programme.

Later, PKSF launched Financial Services for the Poorest (FSP) project, a special project for the hardcore poor, on April 9, 2003. PKSF is successfully piloting the project under a World Bank supported innovative loan programme. As of July 31, 2005, Tk. 135.00 million has been disbursed among 54,200 borrowers under the project.

[Dr. Fakhruddin Ahmed, Managing Director of PKSF, visited a vegetables shop run by a woman beneficiary of TMSS (a PKSF partner Organization) in Bogra recently. Dr. Md. Jashim Uddin, DGM, and Mr. Sajal Halder, AGM, accompanied him]

In the FY 2004-2005, the Government of Bangladesh (GOB) provided Tk. 1000 million to PKSF to implement a microcredit programme for the hardcore poor in the monga-prone northern region of the country. To implement the programme PKSF has set up a cell under the leadership of Dr. Jashim Uddin, a Deputy General Manager. In FY 2004-05 also the GOB will provide another Tk. 1000 million for the programme. With this GOB funding the overall microcredit programme for the hardcore poor undertaken by PKSF has been greatly intensified.

The Hardcore Programme cell has prepared an implementation guideline which includes, among others, criteria for selection of beneficiaries, service charge rate, mode of repayment at PO and beneficiary levels, modes of group formation, savings mobilisation, accounts and management information systems, etc.

The target beneficiaries of the programme include beggars; floating sex workers; street children; slum dwellers; seasonal labourers, people living in the river erosion areas; homeless and unskilled people settled on land owned by others; daily-wage, bonded and domestic labourers; female-headed dependent families; individuals with no source of income, such as the elderly and mentally disabled, and members of families having no income-earners.

PKSF has extended the GOB funded hardcore poor programme beyond Monga prone areas to the remote and char (riverine islands) areas. The programme is implemented through 34 partner organisations of PKSF in 133 upazilas in 30 districts.

PKSF has disbursed Tk. 568.2 million among the POs. The total number of target beneficiaries of the programme is 3,00,000.

In order to make the programme more suitable for the hardcore poor, the POs have adopted a set of strategies to mitigate the problems due to income uncertainty, low credit utilisation skill and low self-confidence of the beneficiaries. A poor household can access loan from hardcore poor programme under flexible conditions for saving deposits and attendance in meetings. The composition of the various categories of the poor currently served by the programme is presented below:

Considering the expensive monitoring and supervision costs of the programme, the service charge for the POs has been kept at minimum, only one percent.

In addition to the above programmes, PKSF’s Micro Finance and Technical Support (MFTS) project also targets the hardcore poor – 25% of the project’s target beneficiaries must come from the hardcore poor.

As of April 30, 2005 the scenario PKSF’s microcredit programmes for hardcore poor is as follows:

PKSF UNDERTAKES NEW PROJECTS

1) Microfinance for Marginal and Small Farmers Project (MFMSFP)

The objective of the project is to raise household income, reduce vulnerability, and improve food security of marginal and small farmers giving them access to microfinance services to invest in farm and off-farm enterprises.

The six-year project has three components: (i) microfinance services involving group formation and implementation of savings and credit services; (ii) capacity building and market linkages; and (iii) project coordination and management.

A loan agreement in this connection was signed between the Government of Bangladesh and IFAD on February 7, 2005. PKSF signed a Subsidiary Loan and Grant Agreement with the Government of Bangladesh in May 2005 and the project has been launched on July 23, 2005.
PKSF will implement the project in 14 districts of the country's northwest and central north regions. About 2,10,000 small and marginal farmers will be provided credit and other support under the project.

The total project cost is US $29.7 million of which US $20.1 million will be funded via an IFAD loan; US$ 8.0 million from PKSF, and US$ 1.7 million from the implementing POs. About 85 percent of project cost will be used for on-lending to farmers, and the balance is earmarked for capacity building and project administration. PKSF has recruited the necessary staff for the project.

Mr. Golam Touhid, Deputy General Manager, has been appointed Coordinator of the project.

2) Chittagong Hill Tracts Rural Development Project

The seven-year project, spanning from 2001 to 2008, aims at reducing the incidence of absolute poverty of the rural population, particularly the tribal population, with special emphasis on women. The strategy is to develop the basic physical infrastructure and local institutions to substantially raise the standard of living of the landless and small and marginal farmers.

The project consists of four main components: (i) upgrading and rehabilitation of rural infrastructure; (ii) community development; (iii) microfinance/micro enterprise development; and (iv) project management support.

PKSF will fund the microfinance component of the project through its selected POs out of its own resources. The target beneficiaries of the project are the poor shifting cultivators who are unable to meet their basic consumption needs and whose main source of income is manual labour; poor landless farmers who have less than 0.2 ha cereal production land; and the poor marginal farmers with less than .45 ha of cereal production land.

The total cost of the project is estimated at US $ 66.06 million, of which PKSF will provide US $3.56 million which is 6 percent of the total amount. The project funded sources are as follows:

[A motivational workshop was organised in Rangamati for local organisations to give them orientation about PKSF and its microcredit programme. Mr. Santu Larma, Chairman of the CHT Regional Council, Mr. Rupayan Dewan, member of the council, and Ms. Jebun Nahar, Manager of PKSF, are seen listening to a speaker on the occasion.]

Three hilly districts — Rangamati, Khagrachari and Bandarban — have been selected as the primary working area of the project; and the project will be implemented by local NGOs.

To implement the project, PKSF needs more POs, particularly of local origin. PKSF, in collaboration with the CHT Regional Council, organised a workshop in Rangamati on December 13, 2004, to motivate local NGOs to become PKSF PO.

The chairman of CHT Regional Council, Mr. Jyotirindria Bodhipriya Larma, Alias, Lantu Sarma attended the workshop as the chief guest along with fellow council member Mr. Rupayan Dewan as special guest.


INSTITUTE OF MICROFINANCE (INM) IN THE OFFING

To strengthen and promote research, training and overall development of the microfinance sector, PKSF will establish an institute, namely, Institute of Microfinance (InM).

The Memorandum of Association and Rules and Regulations of the institute have been finalised and steps are being taken for its registration under the Societies Registration Act of 1860.

CREDIT OPERATIONS

LOAN SANCTION, DISBURESEMENT AND RECOVERY

Loan Sanction to POs

From February to June, 2005, the Governing Body of PKSF held four meetings. During these meetings, the Governing Body sanctioned loans amounting to Tk 4202.6 million to the following POs:

PKSF’S CREDIT SCENARIO AT A GLANCE

Disbursement to POs

From January to April, 2005, PKSF disbursed Tk. 793.75 million under its mainstream microcredit programme; and Tk. 717.32 million under eight projects.
Cumulative loan disbursement from PKSF to the POs as of April 30, 2005 was Tk. 21295.62 million.

Disbursement to Borrowers

As of April 30, 2005, the microcredit programme of PKSF covered 5.44 million borrowers of whom 90.72 percent are women. The cumulative loan recovery rate was 97.33 percent from POs to PKSF, and 98.66 percent from the beneficiaries to the POs.

A summary of PKSF’s microcredit programme at the borrowers level, covering all 64 districts of the country, is given below:

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

** Projects comprise 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.

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 its 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, a visit may occur at any time.

The internal audit cell, the external audit firms and the audit firms enlisted by PKSF and hired by POs also participate in on-sight monitoring.

During their monitoring and supervision visits PKSF officers provide technical assistance to POs to improve their operational efficiency.

The top officials of PKSF, including the managing director, the deputy managing directors and the general manager, also visit the programmes at the field level.

[Dr. Salehuddin Ahmed, the former Managing Director of PKSF, is addressing the closing ceremony of the 17th founding anniversary of ESDO, a partner organization of PKSF, on April 28, 2005.]

From Janurary to April, 2005, Dr.Ahmed the then Managing Director visited six POs — Organisation for Social Advancement and Cultural Activities (OSACA), New Era Foundation and Programme for Community Development (PCD) of Pabna, Palli Bikash Kendra, Dhaka; Arches, Dhaka and Eco-Social Development Organisation (ESDO),Thakurgaon.

During the visit Dr. Ahmed visited the IGAs of the beneficiaries and exchanged views with the chief executives and some beneficiaries of the POs.

On June 20-21, 2005, Dr. Fakhruddin Ahmed, the new Managing Director of PKSF, visited two POs — Thengamara Mohila Sabuj Sangha (TMSS), Bogra and Rangpur Dinajpur Rural Service (RDRS), Rangpur.

He visited some microcredit groups of TMSS and inaugurated a hatchery project of the organisation. During his visit to Rangpur Dinajpur Rural Services (RDRS), he exchanged views with chief executives of 16 POs. Dr Ahmed also visited the Audit and PLDP offices of PKSF in Rangpur.

Mr. Mosharraf Hossain Khan visited six organisations — TMSS; People Oriented Programme Implementation (POPI), Kishoreganj; Uttara Development Programme Society (UDPS), Bogra; Bangladesh Extension Education Services (BEES), Dhaka; Palli Mongal Karmasuchi (PMK), Dhaka and Society for Social Service (SSS), Tangail from January to June 2005.

Mr. Khan visited some IGAs of the beneficiaries and attended workshops of PLDP-1, PLDP-II, MFTS and FSP projects.

Ms. Parveen Mahmud, Deputy Managing Director, visited three POs — Proshika Manobik Unnayan Kendra, Bangladesh Development Society and Protyashi.

During this period, officials of the audit cell visited 48 POs and ensured audit compliances from 32 POs.


INSTITUTION BUILDING PROGRAMME

PKSF’s institutional development programme for its POs includes, among others, soft loans, training, awareness building and skill enhancing seminars and workshops; technical assistance, exposure visits and research.

i) Institutional Development Loan

The POs are given loans on nominal interest for their capacity building. These funds are used to purchase motorcycles, bi-cycles, computers, telephones, and photocopiers; and construct office buildings-cum-training centres for achieving institutional viability.

The institutional loan given to the POs from January to May 2005, is presented below:

ii) Technical Support

Installation of FMS Software in the POs

PKSF has been assisting its POs to computerize their Financial Management System (FMS). As of May 31, 2005, customised FMS software has been installed in 94 POs.

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


Installation of MIS & AIS Software in the POs

The software is being piloted in two POs and its implementing in all POs will be started very soon. Upon completion, the POs will be able to integrate their AIS and MIS.

Also, a firm has been hired to develop an Oracle-based software for the analysis of the monthly PO reports.

Credit Bureau Database

A software development firm, Data Soft System Bangladesh, is developing the database and another firm, Grameen Star Education, is supervising the activities of Data Soft.

iii) Workshops

Four workshops participated by POs’ Board chairmen/ members and chief executives/senior officers were organised during the period to improve governance and enhance skill.

The first workshop was held at Gono Kalyan Trust (GKT), Manikganj on February 10, 2005. Thirty-two officials from eight POs participated in the workshop.

With Mr. Md. Safiuddin, Executive Director of Gana Kallyan Trust (GKT), Manikganj, in the chair, Dr. Mozammel Huq Siddiqui, District Livestock Officer, Manikganj, attended the workshop as Chief Guest. Mr. Golam Touhid, Deputy General Manager of PKSF, attended the workshop as a special guest.

The second workshop for the same purpose was held at PKSF Bhaban on February 24, 2005 and included 28 officials from eight POs. Dr. Salehuddin Ahmed, the then Managing Director of PKSF, attended the workshop as chief guest with Dr. M. A. Hakim, General Manger (Administration), in the chair.

The thrid workshop for PO officials was held at DISHA, Kushtia on April 20, 2005. Thirty-six participants from 10 POs attended the workshop. Mr. Abul Kashem, Manager (Ops.) represented PKSF in the workshop.

The fourth workshop was held at TMSS, Bogra on April 25, 2005. Fifty-four participants from 15 POs attended the workshop.

[Mr. Golam Touhid, Deputy General Manager of PKSF, is responding to queries from a PO director at a workshop organised by PKSF at Manikganj]

iv) Training

During the period from February to June 2005, PKSF has provided training to 1483 officials and staff of its POs under different courses. The progress of PKSF’s training programme for the POs can be seen in the following table:

Tsunami Fund Handed Over

[Professor Rehman Sobhan, Chairman of the Centre for Policy Dialogue (CPD), is presiding over a meeting for handing over Fund for Tsunami Victims.]

The Partner Organizations (POs) of PKSF have made a rare move in mobilising contributions for the Tsunami Victims. Upon an appeal from PKSF, 125 POs of PKSF have contributed Tk. 4.84 million (about US $ 80000) in a fund created by PKSF. The small and medium size POs have made the voluntary contributions from their surpluses generated mainly out of microfinance activities run for poverty alleviation. As such this contribution comes from the service charge paid by the poor people of Bangladesh. The contribution may seem to be very small in comparison to the global resources for Tsunami Victims, but it carries the invaluable feelings for the Tsunami victims and warmth of hearts of millions of poor people of Bangladesh.

The Ambassador of Indonesia, His excellency Warams Hasan Satpura; the High Commissioner of Sri Lanka; His excellency Gamimi S. Munasinghe and Mr. Ajit Kumar of the Indian High Commission received the funds on behalf of their respective governments at a simple ceremony on April 3, 2005 at PKSF Bhaban. They expressed their heart-felt gratitude to the people of Bangladesh, especially the PKSF POs and school children for their support for the tsunami victims.

Among others, Professor Rehman Sobhan, Chairman of CPD; Dr. Salehuddin Ahmed, the then Managing Director of PKSF; Mr. M. Syeduzzaman, former Finance Minister; and Mr. Abdul Muyeed Chowdhury, Executive Director of BRAC were present at the handing over ceremony.

Human Resources

Appointments

The following persons have joined PKSF in different positions as follows:

· Mr. A.S. Mosharraf Hossain has joined as Technical Coordinator, Mr. M.A. Haider as Training Officer and Mr. S. M. Yahia as Monitoring Officer, in the Mifcrofinance for Marginal and Small Farmer Project (MFMSFP) of PKSF.

· Ms. Kulsum Asadee Mahal has joined as Researcher and Mr. Mohammad Moniruzzaman Khan has joined as Associate at the Research and Publications Cell.

· Mr. Md. Kamal Uddin Bhuiyan, Mr. A.S.M. Ashraful Alam, Mr Samsul Haque, Mr. Ruhul Amin, Mr. Abdur Razzak, Mr. S.M. Zahid Hossain, Mr. Md. Habibur Rahman Khan and Mr. Kabir have joined as Assistant Managers.

· Mst. Sharmin Ara and Ms. Kazi Shaila Sharmin have joined as Associates in the Finance and Accounts Department, Mr. Shah Mohammad Rofiuddin, in the Audit Department.

· Mr. Md. Mamunur Rashid, Mr. S.M. Shabbir Hai and Mr. Md. Saidur Rahman have joined as Officers of PKSF.

Promotion

· Mr. M. A. Matin, Manager (Systems) has been promoted to the position of Assistant General Manager (Systems).

Programmes for UN International Year of Microcredit Observance

The Honourable Prime Minister, Begum Khaleda Zia, inaugurated the Observance of the ‘UN International Year of Microcredit 2005’ in Bangladesh on January 15, 2005 in Dhaka. PKSF, the “Focal Point” of the observance in Bangladesh, organised the ceremony.

[Dr. Salehuddin Ahmed, former Managing Director of PKSF, was present at a discussion relating to the UN International Year of Microcredit, organised by OSACA, a PO of PKSF, at Ishwardi in Pabna on February 21, 2005. Mr. Dilip Kumar Chakravorty, Manager, PKSF, Mr. Kazi Minhj-Ul Alam, Chairman, OSACA, and Mr. Mozid Mahmud, Executive Director of OSACA, are also seen in the picture]

To observe the UN International Year of Microcredit in Bnagladesh, a National Committee composed of representatives from various government and non-government organisations, has been formed. In a similar way, sub-committees have been formed at district and upazila levels.

The National Committee has charted out the following programmes to observe the year:

1) Posters, leaflets and stickers related to the observance will be published and distributed for creating wider public awareness about microcredit.

2) A booklet entitled “State of Microcredit” will be published.

3) Special bulletins, reports, write-ups and features will be published in the national dailies throughout the year.

4) Meetings with the beneficiaries and stakeholders of the sector will be arranged.

5) Broadcasting of talk shows, features and success stories of microcredit activities will be arranged through electronic medias.

6) Fairs will be organized at national and local levels to promote the products of microcredit borrowers.

7) Reports on activities of successful microfinance institutions and microentrepreneurs will be published.

8) Essay competitions and debates on issues relating to microcredit will be arranged.

9) Successful managers/field workers of microcredit will be awarded for their outstanding performance in programme implementation.

10) A slogan styled “UN International Year of Microcredit 2005” will be printed on the cover page of calendars, diaries, pads and envelopes.

The district and upazila level committees will organise rallies, seminars and symposium, and present documentary films.

As well, various organisations – including many of the POs of PKSF – have designed programmes to observe the year.

The National Committee has allocated some funds for the district and upazila/thana level committees to carry out activities relating to the observance. As of June 30, 2005, funds have been disbursed in favour of 30 district and 127 upazila committees.

New Partner Organisations of PKSF

PKSF has accepted six NGOs as new POs. A brief profile of each organisation is provided below:

1) Socio-economic Development Action Program (SEDAP), Manikganj

The organisation was established on January 31, 2002 and was registered with the Department of Social Welfare on August 8, 2004.
The organisation was accepted as a PO at the 129th meeting of the Governing Body of PKSF. The chairman of the organization Mr. Mohammad Giasuddin is the chief executive of the organisation.

2) Focus Society (FS), Bogra

The organisation was established in 1999 and was registered with the Joint Stock Company on January 30, 1995. The organisation was accepted as a PO at the 129th meeting of the Governing Body of PKSF. The member secretary, Md. Monirul Islam is the chief executive of the organisation.

3) Village Development Foundation (VDF), Bagerhat

The organisation was established in 1998 and was registered with the Department of Social Welfare on May 3, 1998.
The organisation was accepted as a PO at the 129th meeting of the Governing Body of PKSF. The general secretary of the organization Mr. Md. Amir Hossain is the chief executive of the organisation.

4) Proyas Manobik Unnayan Society (PMUS), Chapainawabganj

The organisation was established in 1994 and was registered with the Department of Social Welfare on March 5, 1996.
The organisation was accepted as a PO at the 130th meeting of the Governing Body of PKSF. The member secretary of the organization Mr. Md. Hasib Hossain is the chief executive of the organisation.

5) CARSA Foundation, Dhaka

The organisation was established on 15 August 1995 and was registered with the Joint Stock Company on May 31, 2004.
The organisation was accepted as a PO at the 130th meeting of the Governing Body of PKSF. Md. Rafiquddin Ahmed is the chief executive of the organisation.

6) Nawjoan, Chittagong

The organisation was established in 1977 and was registered with the Department of Social Welfare in 1980.
The organisation was accepted as a PO at the 131st meeting of the Governing Body of PKSF. The General Secretary, Mr. Imam Hossain Chowdhury, is the chief executive of the organisation.

Cradit programmes of the new six POs can be seen from the following table:

Editorial Board