Welcome To Presentation on Observance of "UN International Year of Microcredit 2005" in Bangladesh

1. Welcome To Presentation on Observance of "UN International Year of Microcredit 2005" in Bangladesh

2. National Committee and focal point for observance of this year in Bangladesh • Bangladesh Govt. nominated PKSF (Palli Karma-Sahayak Foundation) as the focal point to observe the Microcredit year 2005. • Bangladesh Govt. has constituted a national committee for observance of the year with 21 representatives from different Ministries, Departments of Government and NGO Institutions.

3. Activities of the National Committee: • The National Committee is actively working to make the year success. • Implemented activities: • Inaugural Ceremony on “Observance of UN International Year of Microcredit 2005 in Bangladesh” is inaugurated by the Honorable Prime Minister Begum Khaleda Zia dated 15 January, 2005.

4. Released commemorative stamps with the slogan of the Microcredit Year by the Honorable Prime Minister

5. On the day of the inaugural function, 3 (three) newspapers (one English and two Bangla) published special supplements including an article on microcredit activities.

6. About 100 thousand poster distributed throughout the country.

7. Committees at District and Upazila (sub-district) level are also functioning for the Observance of UN International Year of Microcredit 2005 throughout the country in various manners.

8. Rally at the upazila (sub-district) level.

9. Special cultural function on microcredit activities at the local level.

10. Palli Karma-Sahayak Foundation, Federation of NGOs in Bangladesh and Credit and Development Forum and their listed/ partner organisations and commercial banks have published posters, diaries and calendars including the common slogan as under “UN INTERNATIONAL YEAR OF MICROCREDIT 2005BANGLADESH: PIONEER OF MICROCREDIT”.

11. Activities yet to be implemented • The booklet titled “State of microcredit” will be published. It is drafted. • Special bulletins, reporting, write-up, features will be published regularly in the national newspapers throughout the year. • Broadcasting of talk shows, features and success stories of the microcredit activities will be arranged through national broadcasting centres and other electronic media. • Arrangement of fairs to promote products of microcredit borrowers will be arranged both at national and local levels.

12. The Ministry of Civil Aviation and Tourism has been requested to arrange package tour program like ‘Visit Bangladesh’. • The National Committee would be sitting on regular intervals to review the progress of the implementation of the program in a befitting manner. • Prize giving ceremony will be arranged. Awards will be given to successful MFIs, Workers and Beneficiaries. • Campaign materials with the slogan of Microcredit Year Observance will be distributed throughout the country. • Arrangement will be made for essay competition and debates on issues pertaining to microcredit activities.

13. The important speeches delivered by distinguished guests inthe inaugural ceremony and the messages published in the supplements are as follows: • (About 1400 guests were present in the inaugural function including UNDP Resident Representative. 2000 copies of report on the Inaugural Ceremony are distributed throughout the country). • The honorable president, People’s Republic of Bangladesh: • The Millennium Development goal of halving the poverty by 2015 as declared by UNO, the observance of the “UN Microcredit Year 2005” in Bangladesh through different programs and its implementation is very significant and meaningful. • contd....

14. The honorable Prime Minister, Government of the People’s Republic of Bangladesh: • We have presented the model of Microcredit to the world. • She thanked the UN Secretary General for his recognition that Bangladesh is the birthplace of microcredit. • The microcredit activities for poverty alleviation have now become global movement. • She informed that out of 6 billion global population, 50% has got per head income less than two dollars a day and out of this the per head income of 1.20 billion people is below one dollar a day. • A staggering amount of 0.50 billion people out of 1.20 billion live in South Asia. • Microcredit activities can change the condition of the people and bring them out of their suffering in the poverty trap. • NGOs should avoid commercial attitude and government institutions should implement microcredit program with right earnest.

15. The honorable Secretary General of United Nations : • Since the concept was born in Bangladesh almost three decades ago, microfinance has proved its value, in many countries, as a weapon against poverty and hunger. • Microfinance is not charity. It is a way to extend the same rights and services to low-income households that are available to everyone else. • It is recognition that poor people are the solution, not the problem. • I extend my gratitude to the nation and people of Bangladesh for helping to show us the way.

16. The honorable Minister for Finance and Planning of the People’s Republic of Bangladesh: • Perhaps no other development tool has attracted so much global attention in the history of poverty focused development than microfinance. • The honorable Minister for Foreign Affairs of the People’s Republic of Bangladesh: • The observance of “UN International Year of Microcredit 2005” will enhance the public awareness along with expansion of microcredit activities of the borrowers and an effective cooperative framework will be established among the government, borrowers, donor agencies, non-governmental organizations and other development agencies.

17. The honorable Managing Director of Grameen Bank: • A reality today what the bankers around the globe thought to be impossible 30 years ago. • The poor works and they want to work. They have inherent powers of diversified activities to improve their own life.

18. The honorable former Convener of the National Committee (Governor of Bangladesh Bank) : • Bangladesh has become the leader in this sector because out of 70 million of microcredit borrowers in the world, It has alone brought 10 million poor under the coverage of microcredit program. • Now, there is hardly any developing country in the world, not involved in the promotion of microcredit program. • All of us can overcome the challenges of poverty alleviation and achieve the Millennium Development Goal of ‘halving the hardcore poor’ by 2015 in our country and set up another stellar example in the world. • The honorable Resident Representative of UNDP-Bangladesh: He emphasized upon the commercialization of microcredit, training and micro-insurance.

19. For all information in this regard, a webpage has been created and an e-mail address has been opened • webpage:www.pksf-bd.org/un_microcredit05.html • E-mail: unmc05bd@pksf-bd.org

20. Some data of Microfinance in Bangladesh Coverage of Microfinance Program in Bangladesh (June 2003)

21. Sector wise Credit Disbursement of NGO MFIs (December 2003)

22. Specialized Institution for Microcredit in Bangladesh

23. Grameen Bank: The Pioneer of Microcredit in the globe • Grameen Bank is specialized microcredit bank of Bangladesh which was launched by Professor Muhammad Yunus in 1996 as a project. • At that time, it was difficult to conceive that these initiatives would lead to a major microcredit movement, which would make Bangladesh known to the rest of the world. • The poor borrowers of the bank who are mostly women own the bank. Borrowers of Grameen Bank at present own 94 percent of the total equity of the bank. The Government owns remaining 6 percent. Contd.......

24. Total number of borrowers is 3.63 million (June-2004) of whom 96 percent are women. • Total amount of loan disbursed by Grameen Bank, since inception, is US$ 3.23 billion. Out of this, US$ 3 billion has been repaid. Current amount of outstanding loans stands at US$ 0.23 billion. • Grameen model has been replicated in more than 100 countries around the globe.

25. PKSF: The world famous apex microfinancing body for MFIs • Palli Karma-Sahayak Foundation (PKSF), since its establishment in May 1990 by the Government, has been working as an apex microcredit and capacity building organization initially in the rural areas and subsequently in urban areas. • Specialty of PKSF is transparency and continuous funding to its POs. • Upto April-2005 PKSF has provided fund amounting US$ 338 million to its POs that enabled them to disburse US$ 2525 million Contd.....

26. Outstanding number of borrowers of their PKSF’s funded program stood at 5.44 million (90% female borrowers) • Loan outstanding to the borrowers US$ 323 million • PkSF’s-PO and PO-beneficiaries: Recovery rate almost 100%. • PKSF is world’s largest and most successful autonomous apex funding and performance standard setting agency for microcredit. • Many countries have been following PKSF’s model like Pakistan, Sri lanka, South Africa, Nepal, Argentina and Bosnia-Herzegovina.

27. A separate unit at Central Bank for regulatory framework for MFIs in Bangladesh • The Govt. of Bangladesh has decided to bring MFIs under regulatory framework with a view to ensuring more transparency and accountability. • This unit has formulated and operational guideline for monitoring and financial system containing reporting format, guideline for measuring performance and accounting processing and TOR for auditors. • A draft law of regulatory framework has been submitted to the Govt. of Bangladesh for taking further actions.

28. Major issues in microcredit • Targeting the poorest versus achieving financial sustainability: the dilemma in microcredit • Product innovation for hardcore poor. • Scaling up of progressive microcredit borrower. • Regulatory framework for MFIs.

29. Thank you