Md nuruzzaman ph d director training national academy for planning and development
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Initiatives and Achievements in Managing Disaster for Micro Finance Sector: Public Sector Stewardship of Palli Karma Shahayak Foundation in Bangladesh. Md. Nuruzzaman, Ph.D. Director (Training) National Academy for Planning and Development. Introduction.

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Md nuruzzaman ph d director training national academy for planning and development

Initiatives and Achievements in Managing Disaster for Micro Finance Sector: Public Sector Stewardship of Palli Karma Shahayak Foundation in Bangladesh

Md. Nuruzzaman, Ph.D.

Director (Training)

National Academy for Planning and Development



  • Natural disasters have huge adverse effects on development.

  • Over the years, as a disaster prone country, Bangladesh has experienced a number of natural disasters, such as floods, cyclones that caused a great loss to Bangladesh in terms of human assets, economic resources and livelihoods.

  • The flood in 1988 affected 52 districts and 30 million people.

  • The flood in 1998 affected 55 of 64 districts and about 50 million people.

  • The cyclone SIDR in 2007 affected 30 districts in coastal areas and about

    • 9 million people.

    • Damaged nearly 1.5 million houses

    • About 8000 km roads

    • About 5 thousand loss of human life; and

    • livestock about 1.7 million.

Micro finance and disaster

Micro Finance and Disaster

  • On the other hand, micro-finance sector faces multifold crisis as a result of natural disasters like

    • loss of capital of clients and MFIs;

    • loss of life and livelihood of clients and staff members; and

    • collapse of MFIs.

Micro finance portfolio in bangladesh

Micro Finance Portfolio in Bangladesh

  • According to CDF statistics there were around 1410 microfinance institutes in Bangladesh.

  • Up to December 2010, cumulative disbursements by 772 MFIs were Tk. 1508.82 billion.

  • The amount was invested by the 41.24 million active members for the development of

    • agriculture

    • cottage industry

    • small business

    • transport

    • health, education and housing etc. (Microfinance Statistics, 2011).

Organization and management of pksf

Organization and Management of PKSF

  • Palli Karma Shayak Foundation (PKSF) is an apex financial institution established in 1994 by the government of Bangladesh in order to create employment opportunities in the rural areas through providing micro-credit.

  • It is managed by highly qualified professional and development practitioners through a Governing Body and a General Body.

  • General body provides operational guidelines and executive body look after day to day business of PKSF.

  • PKSF gained a unique strength for executing its diversified activities with the wide network which is conducted through its POs.



  • Most of the districts in the country are covered by the POs of PKSF reaching 262 in numbers in FY 2009-10.

  • Field operation of PKSF is based on the members of the POs.

  • The total number of members in FY 2009-10 was 10.96 million

  • Total number of borrowers are 8.39 million, as of FY 2009-10

  • Among the borrowers, number of women borrower is significant i.e., 7.72 million(92%)

Md nuruzzaman ph d director training national academy for planning and development


  • The potentiality of PKSF is evident through the progressive trend of loan disbursement over the decades.

  • The flow of loan disbursement from PKSF-PO in FY 2009-10 was BDT 19.41 billion

  • In case of flow from PO to beneficiaries it is BDT 96.76 billion in FY 2009-10

  • Excluding Institutional Loan, the Loan Outstanding for PKSF in FY 2009-10 was BDT 31.63 billion

  • Similarly, POs' Loan outstanding in FY 2009-10 was BDT 55.99 billion exclusive of Institutional Loan.

Key results in managing disaster for micro sector by pksf

Key Results in Managing Disaster for Micro Sector by PKSF

  • Disaster Management Fund:

  • PKSF provides the funds to its eligible POs, operating in designated vulnerable areas for supporting to disaster beneficiaries

  • PKSF provides loan to POs at the interest rate of O.5% per annum and a repayment period of 24 months in two yearly installments.

  • The POs assess the

    • Needs of the affected or vulnerable families and

    • Provide loans for disaster preparedness and post-disaster rehabilitation

    • Follow the guidelines and terms and conditions.

  • The POs disburse the Disaster Management Fund (DMF) to borrowers at a rate of maximum 4-0 percent and with the typical loan term between 12 to 24 months.

  • POs on-lend to their beneficiaries and recover the funds which was remitted back to PKSF for revolving in subsequent years.

Md nuruzzaman ph d director training national academy for planning and development

Disaster management Product and Services of PKSF at a Glance

Md nuruzzaman ph d director training national academy for planning and development


  • 100 POs have organized a total of 203,946 members under this EFRRAP-DMF program.

  • Most of them were affected by the 2007 flood and benefited directly by soft loans.

  • Besides these, some other disaster-affected members were also targeted for livelihood restoration, post-disaster rehabilitation and disaster preparedness.

  • Up to September 2010, PKSF has disbursed an amount of Tk. 97.95 crore (90%) to its POs, whereas POs have disbursed Tk.90.37 crore to the flood-affected members.

  • Out of the total fund disbursement, disaster preparedness holds the highest share (43.0%) followed by the livelihood restoration (30.0%) and post disaster rehabilitation (28.0%) respectively.



  • Out of 203,946 members,

    • 41% (83,865) used their loans in house repairing purposes.

    • 18%members (36,973) used loans for reconstruction/repairing of latrines

    • 17 %members (34,357) for reconstruction/repairing tube-well ;and

    • 15% (30,516) for buying productive assets and start their business; and

    • 9% (18,235) for buying emergency food and medicine

  • The recovery rate of this disaster management loan is 1OO% both at PKSF-PO and PO-beneficiary levels



  • Key factors for measuring success of the program are:

    • The program provides a very easy and soft loan in terms of interest rate and payment mode for the flood-affected beneficiaries;

    • Helps in smoothing the other loan programs provided by the POs;

    • Assisted beneficiaries for repairing and reconstructing tube-wells, latrines and houses which ensures a minimum standard of sanitation at grass-root level;

    • No savings and extra change (for deposit book and others) for beneficiaries to have this loan; and

    • Consciousness regarding disaster preparedness has been increased at member’s level.

Alternative livelihood training

Alternative Livelihood Training

  • In most cases, disasters disrupt usual livelihoods of the clients.

  • Adoption of alternative livelihood measures need diversified trainings to develop alternative skills.

  • Under the Integrated Initiative to Monga Reduction, PKSF organized training courses on non-farming activities such as:

    • goat and cow rearing;

    • beef fattening;

    • tailoring, craft works;

    • homestead gardening;

    • fish cultivation;

    • nursery so that the clients can take alternative livelihood after disaster.

  • After completion of the training, micro credit is provided to trainees to undertake income generating activities based on their gained skills.

Interest free soft flexible loans

Interest Free, Soft, Flexible Loans

  • PKSF has provided soft term loans for reconstruction/rehabilitation of housing and on and off-farm income generating activities under

    • Southwest Flood Damage Rehabilitation Project (SFDRP) after the flood-2000.

    • ‘Special Assistance for Housing’ (SAHOS)

    • Rehabilitation of SIDR affected Coastal Fishery, Small Business & Livestock Enterprises (RESCUE) in 2007



  • Some features of the products are:

    • Dividing disaster affected areas in three categories such as

      • severely affected areas;

      • medium affected areas; and

      • less affected areas.

    • Borrowers of severely affected areas got priority in receiving credit;

    • Amount of credit for marginal farmers, shrimp cultivators and small business is allowed to receive up-to Tk. 15,000 and the fishing community is allowed loan up-to Tk. 1,50,000; and

    • The borrowers already received credit was further allowed to receive credit again.

Assets building

Assets Building

  • As a recovery measure, many MFIs adopt asset building arrangements to face disaster situation in terms of accumulation of fixed assets and development of human resource.

  • In this regard, under the Sammridi (Prosper) Program, PKSF provides micro-credit to the clients of the disaster prone-areas especially flood-prone areas for the purpose of

    • buying land,

    • taking leasing of land; and

    • installation of solar light so that they can cope with disaster.

  • In case of lease of land in the Char areas, a borrower can take upto Tk. 25000 at 20 percent interest rate for a period of 1 year with flexible installments/repayment schedule.

Stewardship of pksf and way forward

Stewardship of PKSF and Way Forward

  • Natural disasters create vulnerability for both MFIs and their clients.

  • Sustainable microfinance program depends how MFIs are effectively delivering products and services to their clients.

  • As an apex micro finance organization in public sector, PKSF has developed and experimented unique product and services for managing disaster for micro finance sector in Bangladesh.



  • Products and services developed by PKSF based on the experiences of different disasters have been widely used by PKSF partner organizations and MF sector in Bangladesh.

  • Stewardship of PKSF as public sector organization in managing disaster based on product and services designed, experimented and developed and experiences of managing different disasters could be adopted/replicated in making effective disaster management policy and strategies for micro finance sector level as well as national level in Bangladesh.

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