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Annual Report 2011

Message From The Chair

Since its establishment in the year 1992, Integrated Development Foundation (IDF), starting its activities primarily on microfinance, gradually expanded and included the areas like agriculture; health, sanitation and water; eye care; child labour; gender promotion; renewal energy; rural housing; human rights, democracy & governance; disaster management; environment; medicated mosquito net; zerofly net and so on. With these programs IDF, till the end of the reporting period had been serving about 87,000 members in 14 districts through 62 microfinance and 11,980 members through solar branches by providing them necessary services. The recently introduced projects on Integrated Farming and on Medicated Mosquito Net and ZeroFly Net had drawn the attraction of many of our members and outsiders.

The year 2011 demonstrated steady progress and improvements of work in all these programs undertaken by IDF. This happened due to definitive policies adopted, arduous work done by the staff members, supports provided by financial organizations, and well wishers. This year, there had been 3 regular meetings of the Board of Governors; 2 Extra-ordinary General meetings and the Annual General Meeting. All these meetings reviewed the periodical progress of the organization, approve the plans & budgets and decide policy issues and provide guidance. I thank all members of the General Body for their cooperation, support and active participation in these meetings in contributing to frame policy decisions and guidance.
   

This annual report presents the status of the details of activities done during the year 2011 along with the growth trends. I congratulate those who had done the hard work preparing the report. I do believe that the readers will get an insight of IDF activities through this report. However, any suggestions from the readers will enable us to enrich the quality of the report in future.

A. K. Fazlul Bari
Chairperson, IDF



NOTE FROM THE EXECUTIVE DIRECTOR

IDF completed 18 years in 2011. IDF has been able to recover the shocks of global financial crisis and high food prices that affected our members severely in 2007 and 2008. It was possible because of dedication and hard work of IDF staff members in the past years. The orientation and loan officer-wise action plan, branch to branch visit of higher management and salary increase were very useful. The Board reviews salaries and benefits of the staff and inflation, and approves salary increase on regular basis.

The growth curve moved upwards in 2011. The total increase in membership, Loan portfolio and members’ savings in 2011 were respectively 4820 (6.0% increase on 2011), Tk.101.78 million (18% increase on 2011) and Tk.42.5 million (16% increase on 2011). The repayment rate was maintained at 99.34% in 2011. The portfolio quality and good repayment rate could be maintained due to hard work of all IDF staff.

IDF could maintain sustainable growth in 2011 because of commitment and hard work of all IDF staff members and sincere cooperation from our development partners and local social leaders of our working areas. We are very grateful to Grameen Trust, Sida, PKSF, Helen Keller International, Grameen Foundation USA, Deutsche Bank, Basic Bank, BRAC Bank, IDCOL, CHT Regional Council, NGO Affairs Bureau, CHT District Councils, Deputy Commissioners, Upazila Nirbahi Officers and law Enforcing Bodies for their supports and cooperation.

We are also grateful to our Board Members for their active support in mitigating the crisis and implementing various programs in 2011. I cordially thank our founder and life members for their active and positive role and guidance to take appropriate policies and measures in mitigating the crisis.

We hope continuous support from our friends, partners and well wishers to our endeavors of fighting against poverty.

Zahirul Alam
Executive Director, IDF



Microcredit Summit Champaign's Goal

• 175 million of the world’s poorest families, especially the women of those families, are receiving credit for    self-employment and other financial and business services by the end of 2015; and

• 100 million of the world’s poorest families move from below US$ 1.00 a day adjusted for purchasing power    parity (PPP) to above US$ 1.00 a day adjusted for PPP, by the end of 2015.

INTRODUCTION


Integrated Development Foundation (IDF) is a non-profit, non-political and a non-government organization established in December 1992 by Mr. Zahirul Alam, a former ILO staff member and founder member-secretary of the Rural Economics Program of the Department of Economics at the University of Chittagong from where Grameen Bank Microfinance Model was developed by Nobel Laureate Prof. Muhammad Yunus in the 1970s.

IDF started its journey through micro-finance program with small loans for the poor in a small para (sub-village) of Shoalok Union of Bandarban Hill District in 1993 with a seed capital of US$7,500.00(loan) from Grameen Trust. The demand of IDF’s small loans grew very fast in the area, which was not possible to meet with small seed capital received from Grameen Trust. For meeting this demand, IDF approached various donors for support as advised by Prof. Muhammad Yunus.

Swedish International Development Co-operation Agency (Sida) responded immediately and supported IDF for experiment and expansion of Grameen Microfinance Model in the whole of Chittagong Hill Tracts in the framework of a long-term (8 years) sustainable plan. IDF implemented the pilot project successfully, which subsequently attracted other donors and partners including Bangladesh Government, PKSF, ILO, Helen Keller International (HKI), UNICEF, CARE Bangladesh, AusAID, IDCOL, Grameen Foundation USA, Deutsche Bank, CowBank (Australia), Basic Bank Ltd., Sonali Bank Ltd., Bangladesh Krishi Bank, BRAC Bank Ltd., Bank Asia Ltd., Prime Bank Ltd., One Bank Ltd., Mercantile Bank Ltd., Eastern Bank Ltd. and others.

VISION

Create poverty free Bangladesh.

MISSION

To combat poverty in the impassable hilly regions and other un-served areas of Bangladesh through organizing the poor and providing them with capital, inputs and services for their socio-economic upliftment.

OBJECTIVE

The main objective of IDF is to assist the poor, the landless, the destitute women and children, small farmers and disabled persons in order to enable them to gain access to resources and undertake various income-generating and other activities for poverty alleviation and to enhance their quality of life in terms of health, nutrition, sanitation, education, safe water, housing, power and the environment through building effective institutions of their own, which they can understand and operate and can find socio-economic strength in it through mutual support.

GOVERNANCE

The supreme authority of IDF is General Body. It is composed of 18 members from different professions. A Governing Body consisting of 9 members is elected from amongst the General Body of the Foundation. The General Body is the highest policy and decision making body members of IDF. The Governing Body is responsible for the formulation of plan and budget for the programs and projects to be implemented by the organization. The Governing Body evaluates and monitors the implementation of policies, programmes and projects through various monitoring tools and visits to the project areas. A Chairman elected by the General Body heads both General and Governing Body. The Executive Director works as Member-Secretary of both the Bodies.

The Executive Director is the Chief Executive of the Foundation and responsible for the smooth implementation of all activities of the Foundation as per guidance of the Governing Body. He implements the activities through the appointed professionals and support staff of the Foundation.

THE OPERATIONAL AREA

The present operational area of IDF is Chittagong Hill Tracts, Chittagong, Cox’s Bazar, Dhaka, Noakhali, Chandpur, Comilla, Feni, Rajshahi, Chapai Nawabganj, Naoga and Natore.

A brief description of the major operational areas is presented below.

Chittagong Hill Tracts

The Chittagong Hill Tracts (CHT) is a beautiful and strange piece of land with rocks, hills and lakes. These are very difficult and remote areas, inhabited by about thirteen very poor tribes with different languages and cultures. The area is wedged between the Bay of Bengal and the hills of Mizoram of India.

The CHT is a 13,295 sq. km. region of hills consisting of Bandarban, Rangamati and Khagrachari hill districts located in the south-eastern part of Bangladesh. As per Population Census 2001, the total population of CHT is 1.325 million; of which 52 percent are tribal people. Historically, Chittagong Hill Tracts enjoyed the status of a self-governing territory and administered by Hill King which continued until the British East India Company annexed Bengal in 1787. The Chakma Raja (King) then signed an agreement with the British after a long armed conflict, under which Chakma territory became a British tributary on the payment of 20 tons of cotton. This was later extended to other parts of CHT. In 1860, the British formally annexed CHT and upgraded its status to a full-fledged district.

The people of Chittagong Hill Tracts are very poor and they live mainly on Jhum cultivation and bamboo and wood collection from forests, which are major causes of deforestation and soil erosion in the area. Most people of this area live in absolute poverty. Despite of all the efforts of the government, the people of the Chittagong Hill Tracts still lack access to various services such as capital, agricultural inputs and extension services, medical facilities, sanitation and safe drinking water. This is mainly because of i) scattered population, ii) poor communication system, iii) remoteness of the area and iv) political problem. The language barrier further aggravates the situation.

The sentiment of the people of CHT was hurt when the construction of 666 meters long and 43 meters high hydroelectric dam at Kaptai started in 1957. The immediate impact of dam was the submergence of a vast area of natural forests and 54,000 acres of arable land (40% of total cultivable lands in CHT) of the area. It also made about 1,800 families homeless. The displaced families were not properly rehabilitated. As a result, their settlement and construction of new houses in the inaccessible regions led to rampant deforestation. It is also said that some families crossed the border and migrated.

Adverse economic impacts created by Kaptai Dam on displaced people gradually resulted in armed insurgency in CHT. The counter-insurgency measures by the then Pakistan Government through military action worsened the situation. The increased military presence in CHT and search for insurgents created unsettled situation among CHT inhabitants. It was prevailing a very tense situation when IDF started its micro-finance program in CHT in 1993.

Chittagong

Chittagong district is quite different from other districts in its unique natural beauty characterized by hills, rivers, sea, forests, and valleys. The greater Chittagong district was established in 1666 including the present Chittagong, Cox’s Bazar and the three hill districts. The district of Chittagong Hill Tracts was established in 1,860 with the hilly regions of the district. Later, Chittagong district was further divided into Chittagong and Cox’s Bazar districts. The district consists of one City Corporation, 7 municipalities, 20 upazilas, 197 union parishads and 1,319 villages.

Cox’s Bazar

The area of Cox’s Bazar district is 2,491.86 sq. km. It is bounded by Chittagong district on the north, Bay of Bengal on the south, Bandarban district, Arakan (Myanmar) and the Naf river on the east, and the Bay of Bengal on the west. Cox’s Bazar thana was established in 1854. Later Cox’s Bazar subdivision was formed comprising of Cox’s Bazar Sadar, Chakoria, Maheshkhali, and Teknaf thanas. Afterwards, three new thanas (Ukhia, Kutubdia, and Ramu) were created under this subdivision. In 1984, the thanas were transformed into upazilas and Cox’s Bazar subdivision was elevated to a district under the decentralization scheme. It consists of 7 upazilas, 2 municipalities, 60 union parishads, 199 mouzas and 966 villages.

Rajshahi

The area of Rajshahi district is 2,407 sq. km. It is bounded by Naogaon district on the north; West Bengal of India, Kushtia district and the Ganges on the south; Natore district on the east and the Nawabgonj district on the west. Rajshahi district was established in 1772. It has one City Corporation with 4 thanas, 7 municipalities, 93 wards, 297 mahallas, 9 upazilas, 70 union parishads, 1,678 mouzas and 1,858 villages. Rajshahi town stands on the bank of the river Padma. It is both district and divisional town.

Dhaka

Dhaka District is geographically located almost at the centre of the country surrounded by Narayanganj in the east, Gazipur in the north, Munshiganj and Faridpur in the south and Manikganj District in the west. The total area of this district is 1463.60 Sq. Km. (565.10 Sq. miles) of which 45.92 Sq. Km is riverine.

Dhaka District or Dhaka Zilla is the oldest district of the country. There are different views about the origin of the zilla name. There are various opinions about the naming of the Dhaka. Zilla or Dhaka District. One opinion was that the name Dhaka was derived from the word Dhakka (meaning watch station) which was required to be set to the water-ways near the present city of Dhaka.

Comilla

Comilla is a city in south-eastern Bangladesh, located along the Dhaka-Chittagong Highway. Comilla is located at 23°27'0?N, 91°12'0?E, and has a total area of 280 square kilometers. It is bounded by Burchiganj and Tripura on the north, Laksham and Chauddagram on the south, and Barura on the west. The major rivers that pass through Comilla include Gumti and Little Feni.

Chandpur

Chandpur is a district in east-central part of Bangladesh. It is located at the mouth of the Meghna River. It is a part of the Chittagong Division. The town of Chandpur is terminus of a meter gauge branch of Bangladesh Railways.

Chandpur district has a total area of 1704.06 square kilometers. It is bounded by Munshiganj District and Comilla District on the north, Noakhali District, Lakshmipur District and Barisal District on the south, Comilla District on the east, and Meghna river, Shariatpur District and Munshiganj District on the west.

Chandpur is the confluence of two of the mightiest rivers of Bangladesh. The Padma river (the main branch of the river Ganges) and the Meghna river, which meet near Chandpur Town. Important tributaries of the Meghna river flowing through Chandpur are Dakatia river, Dhanagoda river, Matlab river and Udhamdi river.

Noakhali

Noakhali is a district in south-eastern part of Bangladesh. Noakhali District is located in the Chittagong Division of Bangladesh. It has a land area of 3600.99 km², and is bounded by the Comilla district in the north, the Meghna estuary and the Bay of Bengal in the south, Feni and Chittagong districts in the east, Lakshmipur and the Bhola districts in the west.

THE ORGANIZATIONAL STRUCTURE

The organizational structure of IDF can be arranged as General Body, Board of Governors, Executive Director and various departments. The programmes are implemented through head office, coordination office, area office and branch offices. The branch offices work directly with the poor people in their respective areas; organize them with a view to building a receiving mechanism among the poor and implementing various socio-economic programs for them. The offices above the branch supervise, monitor and provide guidance to the branch offices. The structure of IDF.

 
THE PROGRAMS

2011 is the 18th year of IDF operations in poverty alleviation and social development in Bangladesh. This annual report presents the overall progress of IDF activities in 2011. It also presents year-wise summary report up to December 2011. The major programs implemented in 2011 are:

8.1 Microfinance
     8.1.1 Beggar Program
     8.1.2 Poor and Ultra Poor
     8.1.3 Micro-enterprise
8.2 Health, Water and Sanitation
8.3 Emergency Fund (Micro Insurance)
8.4 Eye Care
8.5 Vitamin-A capsule: CHT Project
8.6 Child Labour & Non Formal Education
8.7 Agriculture & livestock
     8.7.1 Agriculture
     8.7.2 Livestock
     8.7.3 IDF Integrated Farm
8.8 Improved Cook Stove
8.9 Renewable Energy (Solar Home System)
8.10 Skill Development
8.11 Housing
8.12 Scholarship Program
8.13 Automation
8.14 Disaster Management
8.15 Environment
8.16 Gender Promotion
8.17 Medicated Mosquito & Zero fly Net


8.1 MICRO FINANCE

IDF launched its micro-finance program in a small para (sub-village) of Shoalok mouza of Bandarban Hill district for the poor, landless and underprivileged people in 1993.

IDF has completed 18 years of operation of its microfinance program in 2011. Many of IDF clients who started as ultra poor gradually graduated to micro-entrepreneurs which are a great achievement. IDF’s clients broadly can now be classified into four categories. These are:

• Beggar
• Poor
• Ultra Poor
• Micro-enterprise

The different categories of members by their number, portfolio and savings as of December 2011 are shown in the Table below:

Categories of Clients
No. of Member
Loan Outstanding
Savings (m. Tk.)
2011
Cum.
in 2011
Cum.
in 2011
Cum.
Beggars
-32
731
-0.43
0.14
0.116
0.273
Poor & Ultra Poor
4150
81827
83.60
590.58
33.36
279.73
Macro-enterprise
702
4394
18.61
68.73
8.98
25.32
Total
4820
86952
101.78
659.45
42.46
305.32
8.1.1 BEGGAR PROGRAM

IDF started its beggar program with the financial and technical assistance of Grameen Trust in May 2006. The objective and status of the program are described below.

Objectives:

• to build confidence and capacity of beggar;
• to enable them to gain access to resources and provide credit to undertake various income generating    activities;
• to turn the beggar into productive manpower;
• to improve their overall socio-economic status.
Particulars
Up to 2010
In 2011
Up to 2011
No. of Branch
35
0
35
No. of Member
763
-32
731
Disbursed (m)
1.94
0.10
2.04
Outstanding (m)
0.57
-0.11
0.46
Repayment Rate
100%
100%
100%
Savings (m)
0.15
0.12
0.27
8.1.2 POOR AND ULTRA POOR PROGRAM

IDF started this program in a small para (sub-village) of Bandarban Hill District with the assistance of Grameen Trust in 1993. The objectives and present status of the program are presented below.

Objectives:

• To build confidence and capacity of the poor and ultra poor;
• To organize and build a receiving mechanism of the poor and ultra poor through which they can receive    their necessary services, inputs and financial assistance for the improvement of their socio-economic    status.
• To alleviate poverty from the very grass-root level of the country.
Particulars
Up to 2010
In 2011
Up to 2011
No. of Branch
59
3
62
No. of Member
77,677
4150
81827
Loan Disbursed (m)
5260.37
1154.68
6415.05
Loan Outstanding (m)
506.98
83.60
590.58
Repayment Rate
99.01
99.12
99.06
Savings (m)
246.37
33.36
279.73
Loan ceiling for

Ultra poor : Up to Tk.8,000
Poor : Tk 8,001 - 30,000

Ultra Poor with PKSF Assistance

The program covered 4,240 ultra poor families of 21 branches with seed capital from PKSF since November 2005. The particulars of the operation of PKSF funded ultra poor as of 31 December 2011 are presented below:

• No. of member : 4,240
• Loan disbursed : 23.98
• Loan outstanding : 0.266m
• Rate of repayment : 99.95 %
• Amount of savings : 3.75m

8.1.3 MICRO-ENTERPRISE


IDF started this product for its graduate members who developed capacity to invest and manage bigger scale of income-generating activity (micro-enterprise) in 2002-03. The criteria of electing a member for this product are as follows;

Criteria of micro-entrepreneur

• Graduate members who developed capacity to undertake Enterprise;
• Received Enterprise Development and Business Management (EDBM) Training;
• 90% attendance in the weekly/fortnightly meeting;
• 100% utilization of previous loan;
• Good track record of business;
• At least 10% of the proposed loan are accumulated in her Savings account;
• Willing to participate at least 10% of the investment in the Enterprise;
• Cooperation and involvement of family members in the Enterprise;
• Regular deposit in savings account;
• Willingness to attend monthly cluster (20 members) meeting.

Loan terms

• Working Capital : 01 year
• Fixed Capital : 02 years

Loan repayment conditions


• 1 month grace period
• Weekly installment
• Fortnightly installment or
• Monthly installment

Risk Insurance

• Premium: 0.95% of the disbursed amount
• Risk coverage: 50% of the disbursed loan in case of the damage of activity due to accidents or any    natural disaster.

Table 4: Status of Micro-enterprise as on 31 December 2011

Particulars
Up to 2010
In 2011
Up to 2011
No. of Branch
47
6
53
No. of Member
3,692
702
4,394
Loan Disbursed (m)
263.28
124.67
387.95
Loan Outstanding (m)
50.12
18.61
68.73
Repayment Rate
99.01
99.26
99.13
Savings (m)
16.32
9.00
25.32


8.1.4 Savings and Credit by size, number and amount


i) Savings

The total no. of retained savers and amount of savings on 31 December are respectively 86,952 and Tk.305,315,992. The No. of savers and their savings are shown by size in the table below:

Table 5: Distribution of savers as of 31 December 2011 by size and amount

Saving Size (in Tk.)
Number
Amount Tk. (m)
Up to 2000
36815
33.13
2001- 5000
27005
63.68
5001- 10000
15391
97.35
10001- 20000
6434
81.85
Above 20001
1307
29.30
Total
86,952
305.31


ii) Credit

The total No. of retained borrowers and amount of loan portfolio on 31 December are respectively 68,476 and Tk.659.45 (m). The No. of borrowers and their portfolio are shown by size, number and amount in Table below.

Table 6: Distribution of loan disbursed in 2011 by size, number and amount

Loan Size (in Tk)
Number
Amount Tk. (m)
Upto 4000
13,685
52.82
4001 - 10,000
34,667
331.06
10001 – 30,000
21,424 579.41
30001 – 50,000
2,818 134.24
50001 - 1,00,000
844 78.91
100001 – 3,00,000
340 100.30
Above 3,00,000
8
2.68
Total
73,786
1,279.45

Growth of Members and Savings

Table below shows the growth trend of members and savings during 2007-11. It also shows trend of geographical expansion of the organization.


Table 7: Growth of members and savings during 2007-2011

Sl. No.
Component
Up to 2007
2008
2009
2010
2011
01.
Member (by year)
5,412
4,708 5,789 3,442 4,820
02.
Member (cum.)
68,193
72,901 78,690 82,132 86,952
03.
Group (cum.)
15,957
17,413 18,921 19,894 20,799
04.
Centre (cum.)
3,016
3293 3,572 3,716 3,993
05.
Branch (cum.)
51
53 56 58 62
06.
Union (cum.)
142
146 307 307 317
07.
Upazila (cum.)
36
38 80 82 82
08.
District (cum.)
7
7 7 7 7
09.
Savings (by year)*
27.67
20.6 17.06 33.25 42.5
10.
Savings (cum)*
191.9
212.5 229.56 262.81 305.31
11.
Average Savings (cum.)
2,814
2,914 2,917 3,199 3,511
                      Growth of members and borrowers by year                  Growth of savings by year
Table 8: Growth and status of loan operations during 2007-2011.
Sl. No.
Component
2007
2008
2009
2010
2011
01.
No. of Loans (by year)
70,973 75,093 78,690 70,038 73,786
02.
No. of Loans (cum.)
418,133 493,226 571,916 641,954 715,740
03.
Borrower (cum.)
63,176 65,603 69,130 68,297 72,170
04.
Loan disbursed (by year)*
763.89 755.55 853.13 950.8 1279.45
05.
Loan disbursed (cum.)*
2966.12 3721.67 4574.8 5525.6 6805.05
06.
Loan due (by year)*
678.98 709.94 747.47 931.07 1172.08
07.
Loan due (cum.)*
2555.25 3288.94 4086.36 5017.43 6189.51
08.
Loan realized (by year)*
678.44 702.85 745.01 915.88 1163.76
09.
Loan realized (cum)*
2553.21 3256.06 4052.04 4967.92 6148.78
10.
Loan outstanding (by year)*
85.44 1.77 38.06 104.94 101.78
11.
Loan outstanding (cum.)*
412.9 414.67 452.73 557.68 659.45
12.
Loan overdue (by year)
16.36 84.82 34.53 43.84 40.73
13.
Portfolio at risk > 30 days
2.07 3.2 3.36 3.06 3.97
14.
Average Loan size
7748 8771 6588 8607 9507
15.
Average outstanding (cum.)
6535 6313 6549 8165 9630
16.
Rate of repayment (by year)
99.92% 99.00% 99.67% 99.73% 99.29%
17.
Rate of repayment (cum.)
99.92% 99.00% 99.16% 99.54% 99.34%

Note: 1. cum. = Cumulative, * = Figure in million Taka.
                          Growth of loan disbursement by year                Growth of loan outstanding by year
Table below shows the trend of financial growth of the organization for 2007-2011.
Table 9: Financial Growth for 2007-2011
(Figure in million Taka)
Sl. No.
Particulars
2007
2008
2009
2010
2011
A.
CAPITAL FUND
01.
Capital Fund / Equity
113.78
115.95
132.52
151.03
171.80
B.
INTEREST RATES
02.
Rate of Service Charge
2.1.
General Loan
25%
25%
25%
25%
25%
2.2.
Poor and Ultra Poor
25%
25%
25%
25%
25%
2.3.
Housing Loan
8%
8%
8%
8%
8%
2.4.
Project Dignity
0%
0%
0%
0%
0%
03.
Inflation Rate
6%
6%
6%
6%
6%
C.
INCOME
04.
Service charge income from clients
91.49
94.68
93.33
112.96
145.71
05.
Other income
1.73
3.91
6.35
42.27
54.61
06.
Total Income
93.22
98.59
99.68
155.24
200.33
D.
NON-FINANCIAL EXPENSES
07.
General Operating Expenses (Salaries, rents, utilities, cost of fund etc.
54.48
66.55
74.91
130.54
171.63
08.
Depreciation on fixed assets
1.15
1.22
1.82
1.59
1.86
09.
Loan loss provision expenses
3.7
29.03
3.56
7.38
6.08
10.
Total Non-Financial Expenses
59.33
88.8
84.29
139.52
179.57
E.
ADJUSTED FINANCIAL EXPENSES
11.
Adjusted Financial Expenses (Line-1 multiplied by line-3)
6.82
6.95
7.95
9.06
10.31
12.
Total Expenses (Line-10 plus line-11)
66.15
95.75
92.24
148.58
189.87
13.
Operational Self Sufficiency (OSS) (Line-6 divided by line-10)
157%
111.02%
118.25%
111.26%
111.56%
14.
Financial Self Sufficiency (FSS)
(Line-6 divided by line-12)
140%
102.96%
108%
104.48%
105.51%
                        Growth of Capital Fund by Year (m.Tk.)      Growth of Income & Non financial Expenses (m.Tk.)   

Self Sufficiency status by year (%)

8.1.5 Loan by Purpose

IDF clients receives loan for various purposes. Most of them are related to agricultural activities, animal husbandry, poultry, gardening and micro-enterprise businesses.

Table 10: Percentage of Loan by Purposes
                                                                                              (Figures in percent)
Sl. No.
Purposes
2007
2008
2009
2010
2011
01.
Farming
9.64
12.75 25.66 21.12 22.13
02.
Cow rearing
9.80
9.56 5.42 8.50 10.2
03.
Goat rearing
1.95
2.12 3.32 5.71 5.81
04.
Beef fattening
7.03
6.68 5.79 1.51 5.1
05.
Pig rearing
1.48
1.52 2.92 2.36 2.3
06.
Poultry
5.12
3.98 4.36 20.02 12.6
07.
Home Gardening
1.35
1.40 0.39 3.10 4.3
08.
Fruit gardening
1.49
1.38 1.60 16.40 16.1
09.
Nursery
1.47
1.65 0.64 0.97 1.1
10.
Handicrafts
3.36
3.61 0.80 3.45 3.1
11.
Garments/Tailoring
3.51
3.44 2.57 0.75 0.75
12.
Fisheries
9.43
6.74 5.71 0.92 1.2
13.
Housing
1.23
2.10 2.1 6.42 3.5
14.
Water Sanitation
1.77
1.23 0.13 2.94 2.4
15.
Local transport
9.28
9.79 7.36 2.44 2.1
16.
Small Business
27.60
27.67 16.12 1.53 1.51
17.
Micro Enterprise
4.50
4.36
15.11
1.87 5.8
  Total (%)
100.00
100.00
100.00
100.00
100.00
8.2 HEALTH, SANITATION AND WATER

IDF started this program with the assistance of Sida in Chittagong Hill Tracts in 1995. The reasons for initiating this program were two. They are: i) ignorance of people on causes of various common diseases and ii) lack of access of poor people to health services and safe water. IDF launched a survey on the sanitation and water in selected villages of Bandarban Sadar in 1996 with the assistance of UNICEF which shows that about 95% households had no sanitary latrine and almost all rural households did not have access to safe water at that time.

IDF selects health agent/secretary from amongst the members in each centre. One health agent/secretary can look after more than one para (sub-village). Health agents are the motivators and contact persons at para levels. Health agents are provided training on causes of common diseases, primary health care, reproductive and child health, safe water and sanitation, HIV/AIDS and eye care. The organizational structure of IDF health program is shown below.

Figure- 2: Structure of Health Program


Objectives

• To make the poor people aware of health problems and the causes of common diseases.
• To ensure access of the poor people to health services, safe water and sanitation.
• To make the people conscious about the safe motherhood and child health.


Present Status

No. of health centre: 1
Health Spot : 4

Clinical Services in 2011:

• General Patient : 31,184
• STD Patient : 76
• Eye Patient : 102
• Awarness raising : 4820


8.3 Emergency Fund (Micro Insurance)

8.3.1. Introduction

The target area of IDF is very remote, hilly, difficult and inhabited by 13 different poor tribes with different cultures and languages who lack access to basic economic and social services. Most people and children here suffer from various diseases. Mortality rate here is one of the highest in Bangladesh. It was very difficult to improve income status due to regular expenses for medical treatment. The resources of poor people are so limited that they often experience great financial disruption when unexpected events befall on them. If a poor landless labor or farmer fall in ill, he not only loses his income but also does not get treatment due to lack of money. If he dies, his family not only pays funeral expenses but also requires cash for basic needs and education. A poor has limited property with or without modest shelter, but the loss of any of these brings a greater blow to the family's economy.

It was in this circumstances and requests from the members; IDF explored the possibility of getting micro-insurance services to cover these risks from the insurance companies. But it was very expensive and not affordable by the poor. As a result IDF started micro-insurance for its members in 1997 in Chittagong Hill Tracts which enable to protect themselves from these risks which require only small premium. The premium can also be paid through small installments.

8.3.2. Objectives

The main objective of the program is to provide insurance services for the poor members of IDF and develop an appropriate micro-insurance model in order to protect them against risks due to sickness, death and damages or losses in income-generating activities.


The activities of the program are

(1) Provide education on micro-insurance to all IDF members;
(2) Collect premium and payment of claims;
(3) Monitor progress on monthly basis through monthly reports;
(3) Preparation of reports;
(4) Maintaining a data base.



8.3.3. Methodology

IDF uses its branch network of microfinance to implement its micro-insurance program. IDF reaches its clients through centers, branches and area offices. There is a health worker in each area office that helps the area manager to implement the program and provide health services to the members.

The members can pay the premium in installments. The premium is collected by the loan officers along with loan installments during the centre meeting.

Diagram: Institutional Structure


In case of any claim for sickness, death or disaster or activity damage; the client informs respective loan officer who along with branch manager investigate the case. The branch manager is authorized to pay a certain portion of the claim for immediate use in case of sickness and death. The remaining claims for medical treatment or death are settled after the approval of the case by the approving authority. In case of activity damage, the total claims are paid in one installment after the approval of the approving authority.

8.3.4. Components

IDF micro insurance scheme has 4 components.

These are:

i) Health;
ii) Death (Life);
iii) Risk Insurance (Damage/loss of activities) and
iv) Cattle.


a) Health and Death Insurance:

Health and death coverage are met from same fund named “Emergency Fund”. Damages or losses of activities are met from another fund named “Risk Fund” while losses of cattle are met from “Cattle Fund”.


Diagram: Components of Insurance Scheme


Creation of Fund:

This fund is created with a view to providing the clients with support for risk coverage in case of the death or illness of the member or any one of her family. The members pay 0.95% of the loan money to this fund as premium. The members pay this premium with the weekly installments.


Health Coverage: The whole family of the member is insured under this scheme. A maximum amount of Tk.2,000 is paid for the treatment in each case. In case of hospitalization, the amount of claim is estimated on the basis of expenses of public hospital. The medical officer examines each case before the approval.

Recently A pilot scheme is launched to see whether full health support including transport allowance could be provided to the members and their family members under this scheme. The members get doctor’s advice, free medicines, and tests for diabetics and pregnancy and transport cost.

Death Coverage: If the member or any dependent of the member’s family dies, the families get the following benefits under this scheme.

i) Member: Tk.11,000.00
ii) Dependent : Tk. 1,500.00
iii) Children: Tk. 500.00

b) Risk Insurance


All activities undertaken by loan are covered by Risk Insurance. The member pays 0.95% of the loan money as premium to cover risks of projects under this scheme. If, the insured project suffers a damage or loss, the member gets a maximum 50% of the loan money depending on the extent of damage. For the claims, the member has to apply in prescribed form centre, branch and area office. After a physical verification, the responsible officers recommend the amount. After the physical verification, the Executive Director finally approves the claims. All claims are settled within 30 days after submission of application for claims. The members can collect the claims from the branch office. The coverage will be increased gradually depending on the size of fund.

c) Live Stock Insurance

In 1997 IDF introduced Live-stock Insurance. IDF members who take livestock loan must undertake insurance policy so that they might get risk coverage against sickness or death of cattle.

Initially the rate of premium was 1.00% of the disbursed loan and the rate of risk coverage was 20% of the loan money. In 2009 the rate of premium was increased to 1.5% of the loan money and the coverage was enhanced to 50% of the loan money.

Diagram: Coverage


8.3.5. Present Status


The members found micro insurance as an important tool for their protection against diseases, death, damage or losses of activities. The progress of micro insurance program is shown below.

Table 11: Claims met as of December 2011


Component
No. of claims met
Amount paid in BDT(m)
In 2011
2011
In 2011
2011
Health Insurance
8,468
31,184
5.36
18.41
Life Insurance
961
5,820
1.75
14.08
Risk Insurance/Cattle
31
57
0.69
0.87
Total
9,460
37,061
7.80
33.36