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Annual Report 2012

Message From The Chair

Integrated Development Foundation (IDF) completed its 19th year of operation of its various activities of Bangladesh. Its program activities cover a wide range of areas with particular focus and efforts on microfinance, micro insurance, renewable energy, agriculture; health, sanitation & water; eye care; gender promotion; medicated mosquito net, zerofly net and so on. With thses programs IDF, till the end of the reporting period had been serving more than 96,000 members within the project areas by providing them necessary services. The recently established “integrated farm” at Matiranga is getting shape of an eco-village environment in the area and is drawing the attraction of many of our members and outsiders.

The year 2012 demonstrated steady progress and improvements of work in all these programs undertaken by IDF. This was possible due to definitive policies adopted and practiced, arduous work done by all the staff members of the organization, supports provided by development partners, and well wishers. This year, there had been four regular meetings of the Board of Governors; one extra-ordinary general body meeting and the Annual General Meeting. All these meetings reviewed the periodical progress of the organization, approved the plans & budgets and decided policy issues and provided guidance. I think all members of the Board of Governors for their attendance and participation in Board meetings; as well as the members of the General Body for their cooperation, support and active participation in the meetings in contributing to frame policy decision and guidance.

   
This annual report presents the status of the details of activities done during the year 2012 along with the growth trends. I congratulate those who had done the hard work of 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 enrich the quality of the report in future.

A. K. Fazlul Bari
Chairperson, IDF



NOTE FROM THE EXECUTIVE DIRECTOR

2014 was the 21th year of IDF journey towards Poverty free Bangladesh. IDF staff members worked hard in contributing towards achieving the goal of the organizations and maintaining quality of services and portfolio. 60% increase in the salary in 2012 helped us in boosting the moraly and improved the quality of the staff members.

IDF credit programme maintained moderated growth in 2012. The increase in membership, loan portfolio and members savings in 2012 were respectively 9,360 (10.76% increase), 139.86m (21.2% increase) and 87.35m (28.6% increase). The growth in 2012 is higher than that of 2011. The no. of IDF solar clients has also increased by 78% in 2012. IDF could make higher growth in 2012 because of the boosted morale and motivation of staff members and cooperation of our development partners and local leaders.

We are very grateful to Grameen Trust, PKSF and IDCOL for their continuous supports in 2012. We are also grateful to Hellen Keller International, Basic Bank ltd. Brac Bank ltd. Prime Bank ltd. One Bank ltd. Eastern Bank ltd. Bangladesh Krishi Bank, Bank Asia ltd. Mercantile Bank ltd. CHT Regional Council, NGO Affairs Bureau, CHT District Councils, Deputy Commissioners, Upazila Nirbahi Officers and Law Enforcing Bodies for their supports in 2012.

We are also grateful to our Board members for their active support and participation in the implementation of various projects and programmes in 2012. I also thank our founder and life members for their active role and guidance in 2012.

We hope continuous support of our friends, partners and well wishers will faster our Journey to “Poverty free Bangladesh”.


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 Economics Department, Chittagong University 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 in a small para (sub-village) of Shoalok Union of Bandarban Hill District with a seed capital of US$7,500.00 (loan) from Grameen Trust in 1993. The demand of IDF’s small loans grew very fast and it was very difficult to meet with that small seed capital. For meeting the 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 the 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. The successful implementation of the plan subsequently attracted other donors and partners including Government ministries and department, PKSF, ILO, Helen Keller International (HKI), UNICEF, CARE Bangladesh, AusAID, IDCOL, 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 of 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 if IDF. The Governing Body is responsible for the formulation of plan and budget for the programs and projects to be implemented by he 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 if IDF is Chittagong Hill Tracts, Chittagong, Cox’s Bazar, Dhaka, Noakhali, Chandpur, Comilla, Feni, Rajshahi, Chapai Nawabganj, Naogaon, Natore, Bogra, Hobigonj, Brahmmanbaria and Gazipur.

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 ribes 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 13295sq. km. region of hills consisting of Bandarban, Rangamati and Khagrachori hill districts located in the south-eastern part of Bangladesh. As per Population Census 001, the total population of CHT is 1325 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 of 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 forest, 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 ling 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 forest and 54,000 acres land (40% of total cultivable land 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 aerated 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.


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

2012 is the 19th year of IDF operations in poverty alleviation and social economic development in Bangladesh. This annual report presents the overall progress of IDF activities in 2012. It also presents year-wise summary report up to December 2012. The major programs implemented in 2012 are:

Microfinance
     * Beggar Program
     * Poor and Ultra Poor
     * Micro-enterprise
     * Savings and Credit
     * Loan by purpose

Renewable Energy (Solar Home System)
Automation
Health, Water and Sanitation Emergency Fund (Micro Insurance)
Eye care
Child Labour & Non Formal Education

Agriculture & Livestock
     * Agriculture
     * Livestock
     * IDF Integrated Farm

Improved Cooks Stove

Skill Development

Housing

Scholarship Program

Disaster Management

Environment

Gender Promotion

Medicated Mosquito

Zero Fly Net


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 19 years of operation of its microfinance program in 2012. Many IDF clients who started from ultra poor gradually graduated to micro-entrepreneurs. These are great achievement of the organization. IDF’s clients broadly can now be classified into four categories, such as:


• Beggar
• Poor
• Ultra Poor
• Micro-enterprise

The different categories of members by number, portfolio and savings as of December 2012 are shown in Table-1
Table 1: Members of Microfinance Program by caterory, loan portfolio and savings.

Categories of Clients
Member
Loan Outstanding (m Tk.)
Savings (m. Tk.)
2012
Cum.
in 2012
Cum.
in 2012
Cum.
Beggars
-262
469
-0.17
0.29
-0.18
0.09
Poor & Ultra Poor
8,267
90,094
208.45
799.03
80.78
360.51
Macro-enterprise
1,355
5,749
30.92
99.65
6.74
32.06
Total
9,360
96,312
239.2
898.97
87.34
392.66
BEGGAR PROGRAM

Though a lot of microfinance organization are working in the country, the beggars are deprived of credit facilities as they could not join in any group.

With the above background, IDF introduced a separate program for the beggars in May 2006 with the financial and technical assistance of Grameen Trust. The objective and status of the program are described below.

Objectives:

• Build confidence and capacity of beggars;
• Enable them to gain access to resources and provide credit to undertake various income generating    activities;
• Turn the beggar into productive manpower;
• improve their overall socio-economic status.

Table 2: Status of Beggar Program as on 31 December 2012

Particulars
Up to 2010
In 2011
Up to 2011
No. of Branch
35
0
35
No. of Member
731
-262
469
Disbursed (m)
2.04
0.01
2.05
Outstanding (m)
00.46
-0.17
0.29
Repayment Rate
100%
100%
100%
Savings (m)
0.27
-0.18
0.09

The number of beggars reduced by 262 in 2012 mainly because of the following reasons.
1) Graduated to main stream -9%
2) Drop out to main stream - 91%

POOR AND ULTRA POOR PROGRAM


Poor and Ultra Poor Programs are Major Programs of the organization. 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:

• Build confidence and capacity of the port and ultra poor;
• 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.

Table 3: Status of Beggar Program as on 31 December 2012


Particulars
Up to 2011
In 2012
Up to 2012
No. of Branch
62
13
75
No. of Member
81827
8267
90094
Loan Disbursed (m)
6415.05
1866.9
8281.95
Loan Outstanding (m)
590.58
208.45
799.03
Repayment Rate
99.06
99.24
99.69
Savings (m)
279.73
80.78
360.51
Loan ceiling for

Ultra poor : up to Tk. 8000
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

MICRO-ENTERPRISE


IDF introduced this product in 2002-03 for the graduate members who developed their capacity to utilize and manage bigger income-generating activity (micro-enterprise) in 2002-03. The criteria of selection of 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 2012

Particulars
Up to 2011
In 2012
Up to 2012
No. of Branch
53
4
57
No. of Member
4394
1355
5749
Loan Disbursed (m)
387.95
287.01
674.96
Loan Outstanding (m)
68.73
30.92
99.65
Rate of Payment
99.13
99.55
99.37
Amount of Savings (m)
25.32
6.74
32.06

The size of minimum and maximum loan disbursed under micro-enterprise in 2012 are respectively Tk. 35,000.00 and tk 5,00,000.00.

Savings and Credit by size, number and amount


i) Savings

IDF members have been gradually motivated to savings scheme of the organization. IDF members are depositing savings in various ways. The savings products are: Savings fund, Special Savings, Savings Account and Family savings.

Savings Fund:

The members contribute to their savings fund on regular basis at certain rate decided by them. Members can withdraw all contributions from this fund with interest when they leave the group. IDF provides 6% interest per annum to savings fund.

Special savings:

The members deposit same amount as savings fund to Special Savings. Members can withdraw Special savings any time for any purpose. They are required to come to Branch Office to with draw money from Special savings. The minimum required balance of special savings is tk. 100.00.

Savings Account:

This savings product is mainly for micro-enterprise borrowers. This accounts is similar to a bank account in the schedule bank. The members can withdraw money from this account at any time for any purpose. The minimum balance for this account is Tk. 100.00.

Family Savings:

Family Savings is a long term savings product similar to a pension scheme for the members. Members are given up to 12% profit in the Family Savings account. They can withdraw money any time before maturity. the depositors will get less profit in that case.

At the end of December, 2012 total no. of retained savers and the total amount of savings are respectively 96, 312 and Tk. 392.66(m) the No. of savers and their savings are shown by size in the table-5.


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

Saving Size
Number
Amount (m)
Up to 2000
39,138
72.22
2001- 5,000
28,366
96.65
5001- 10,000
17,291
97.35
10001- 20,000
8,660
90.73
Above 20,001
2,857
35.71
Total
96,312
392.66


ii) Credit

The total No. of retained borrowers and amount of loan portfolio on 31 December 2012 are respectively 72,806 and Tk.799.31 (m). The No. of borrowers and their portfolio are shown by size, number and amount in Table 6

Table 6: Distribution of loan disbursed by size, number of loan and amount in 2012

Loan Size (in Tk)
Number
Amount Tk. (m)
Upto 4000
14,625
78.50
4001 - 10,000
35,577
418.76
10001 – 30,000
22,468 610.44
30001 – 50,000
3,458 171.50
50001 - 1,00,000
1,154 104.20
100001 – 3,00,000
267 90.40
Above 3,00,000
11
3.10
Total
77,560
1476.90
`
Growth of Members and Savings

Table below shows the growth trend of members and savings during 2008-12. It also shows trend of geographical expansion of the organization.


Table 7: Growth by Area members and savings during 2008-2012

Sl. No.
Component
Up to 2008
2009
2010
2011
2012
01.
Member (by year)
4,708
5,789 3,442 4,820 ,360
02.
Member (cum.)
72,901
78,690 82,132 86,952 9,312
03.
Group (cum.)
17,413
18,921 19,894 20,799 22,072
04.
Centre (cum.)
3,293
3,572 3,716 3,993 4,284
05.
Branch (cum.)
53
56 58 62 75
06.
Union (cum.)
146
307 307 317 325
07.
Upazila (cum.)
38
80 82 82 85
08.
District (cum.)
7
7 7 7 10
09.
Savings (by year)*
20.6
17.06 33.25 42.5 87.35
10.
Savings (cum)*
212.5
229.56 262.81 305.31 392.66
11.
Average Savings (cum.)
2,914
2,917 3,199 ,511 4,076
                      Growth of members and borrowers by year                  Growth of savings by year
Table 8: Growth and status of loan operations during 2008-2012
Sl. No.
Component
2008
2009
2010
2011
2012
01.
No. of Loans (by year)
75093 78690 70038 73786 77560
02.
No. of Loans (cum.)
493226 571916 641954 715740 793300
03.
Borrower (cum.)
65603 69130 68297 72170 72806
04.
Loan disbursed (by year)*
755.55 853.13 950.8 1279.45 1476.9
05.
Loan disbursed (cum.)*
3721.67 4574.8 5525.6 6805.05 8281.95
06.
Loan due (by year)*
709.94 747.47 931.07 1172.08 1350.6
07.
Loan due (cum.)*
3288.94 4086.36 5017.43 6189.51 7540.11
08.
Loan realized (by year)*
702.85 745.01 915.88 1163.76 1334.13
09.
Loan realized (cum)*
3256.06 4052.04 4967.92 6148.78 7482.91
10.
Outstanding increase (by year)*
1.77 38.06 104.94 101.78 139.86
11.
Loan outstanding (cum.)*
414.67 452.73 557.68 659.45 799.31
12.
Loan overdue*
84.82 34.53 43.84 40.73 50.7
13.
Portfolio at risk > 30 days
302 3.36 3.06 3.97 3.02
14.
Average Loan size
8771 6588 8607 9507 11272.17
15.
Average outstanding (cum.)
6313 6549 8165 9630 10015
16.
Rate of repayment (cum.)
99.00% 99.67% 99.01% 99.29% 99.54%

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: Shown the trend of Financial Growth of the Organization for 2008-2012

Sl. No.
Particulars
2008
2009
2010
2011
2012
A.
CAPITAL FUND
01.
Capital Fund / Equity
115.95
132.52
151.03
171.8
206.55
B.
INTEREST RATES
02.
Rate of Service Charge
(Declining Method)
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%
8%
7.5
C.
INCOME
04.
Service charge income from clients
94.68
93.33
112.96
145.71
193.28
05.
Other income
3.91
6.35
42.27
54.61
14.23
06.
Total Income
98.59
99.68
15.52
200.33
207.51
D.
NON-FINANCIAL EXPENSES
07.
General Operating Expenses (Salaries, rents, utilities, cost of fund etc.
66.55
74.91
130.54
171.63
158.79
08.
Depreciation on fixed assets
1.22
1.82
1.59
1.86
2.11
09.
Loan loss provision expenses
29.03
3.56
7.38
6.08
11.85
10.
Total Non-Financial Expenses
88.8
84.297
138.52
179.57
172.75
E.
ADJUSTED FINANCIAL EXPENSES
11.
Adjusted Financial Expenses (Line-1 multiplied by line-3)
6.95
7.95
9.06
10.31
15.49
12.
Total Expenses (Line-10 plus line-11)
95.75
92.24
148.58
189.87
188.25
13.
Operational Self Sufficiency (OSS) (Line-6 divided by line-10)
111.02
118.25
111.26
111.56
120.12
14.
Financial Self Sufficiency (FSS)
(Line-6 divided by line-12)
102.96%
108.00%
104.48%
105.51%
110.23
                        Growth of Capital Fund by Year (m.Tk.)      Growth of Income & Non financial Expenses (m.Tk.)   
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
2008
2009
2010
2011
2012
01.
Farming
12.75
25.66 21.12 22.13 23.40
02.
Cow rearing
9.56
5.42 8.50 10.2 12.2
03.
Goat rearing
2.12
3.32 5.71 5.81 7.75
04.
Fruit Gardening
1.38
1.60 16.40 16.1 8.6
05.
Pig rearing
1.52
2.92 2.36 2.3 4.4
06.
Poultry
3.98
4.36 20.02 12.60 11.7
07.
Home Gardening
1.40
0.39 3.10 4.3 4.40
08.
Local Transport
9.79
7.36 2.44 2.1 2.5
09.
Nursery
1.65
0.64 0.97 1.11 1.1
10.
Handicrafts
3.61
.80 3.45 3.1 3.2
11.
Garments/Tailoring
3.44
2.57 0.75 0.75 0.75
12.
Fisheries
6.74
5.71 0.92 1.2 1.2
13.
Housing
2.10
2.1 6.42 3.5 3.2
14.
Water Sanitation
1.23
0.13 2.94 2.4 2.5
15.
Beef Fattening
6.68
5.79 1.51 5.1 4.5
16.
Small Business
27.67
16.12 1.53 1.51 3.4
17.
Micro Enterprise
4.36
15.11
1.87
5.8 5.2
  Total (%)
100.00
100.00
100.00
100.00
100.00
Renewable Energy (Solar Home System)

IDF started Solar home System Program with the assistance of Infrastructure Development Company Limited (IDCOL), a government owned company in 2003. The main purpose of this program was to provide electricity to the rural and remote areas where people do not have access to power grid. IDF provides medium and long-term credit facility to procure these systems. IDF with three other partners established 100k is a mini solar plant in shandwip, an isolated island of Chittagong district with the assistance of IDCOL.

The management team are responsible to maintain the quality of the services. It has a separate coordination office from where the coordinator manages the whole operation. It has also separate area office, branch office and the employees work whole time for this program. There is a strong monitoring and evaluation mechanism in IDFs solar program as most of the SHSs are on credit yet a down payment is involved there. the rate of recovery in the solar program is 100%. The Servicing facilities have been developed to support the clients. This support is provided through:

Technicians at the field level
Awareness training of the clients on maintaining SHS




In 2012, IDF installed 9,338 SHS making a total of 21,308 at the end of the year. The areas covered are Chittagong Hill Tracts, Chittagong, Cox’s Bazar, Dhaka, Noakhali, Chandpur, Comilla, Feni, Rajshahi, Chapai Nawabganj, HObigonj, Braahmanbaria and Gazipur.

Source of Fund: IDCOL assisted IDF with a grant and loan money in 2003 to start the Solar program. Up to December 2012, IDF received the total amount of grant from IDCOL is Tk. 3,52,23,674 and the cumulative amount of loan is 29,23,67,499. Meanwhile IDF Managed to repay to IDCOL Tk. 2,86,49,683 against the principal amount. The progress is shown in Table-11.

Progress of Solar Home System Program

Particulars
In 2012
Cumulative
System Installed (No)
9338
21308
Loan disbursed (m)
180.95 440.53
Loan repaid (m)
91.82 226.91
Loan outstanding (m)
89.13 213.62
Repayment Rate
100% 100%

Automation

IDF introduced branch automation activities in 2007 with the support of Grameen Foundation USA to replace manual MIS and FIS by computerized methods. IDF selected Southtech Limited as implementation partner for its Automation.

IDF established a separate IT department for maintaining the automation activities properly known as IS |Department in 2007. IS Department also provides support to solve all kinds of hard ware and software related problems occurred at branch and other offices.

As of December 2012, IDF completed automation in 55 branches. The remaining are in live process. Accounting is done from data collection from computer after closing the day in the computer at automated Branches. The status of automation as on 31 December is shown in Table-12.

Particulars
Up to 2009
Up to 2010
Up to 2011
Up to 2012
Automated
9 25 43 55
Live
10 8 8 9
Back log
11 6 1 10
Total Branch
30 39 52 74

At present IDF has a work station based automation system. IDF is planning to establish a server based automation system when all the branches are fully automated. Server based automation system provides the facilities of accessing reports and data by internet from anywhere. After closing the day in computer all the data and reports are uploaded to server. Manual reporting system will be closed by June 2013 when server is established. Any department can get their necessary information from server based automation.

HEALTH, SANITATION AND WATER


IDF started this program with the assistance of sida in Chittagong Hill Tracts in 1995. There were mainly two reasons for initiating this program. These are i) ignorance of people on causes of various common diseases and ii) lack of access of poor people the health services and safe water. IDF launched a survey on t he 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 2012:

• General Patient : 6617
• STD Patient : 28
• Eye Patient : 16


Emergency Fund (Micro Insurance)

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 service . Most people and children 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 very limited that they often experience great financial disruption when unexpected expenses/events fall on them. If a poor landless laborer or farmer becomes sick, he/she not only loses 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.

Considering the above circumstances and requests from the member; IDF explored the possibility of getting micro-insurance services to cover these risks from the insurance companies and revealed that the insurance companies are very expensive which are not affordable by the poor. There after IDF started micro-insurance program for its members in 1997 at 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 or at a time.

Objectives

The main objective of the program is to provide insurance services for the poor members if 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.



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.

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 approval.


In 2012, a total of 12265 patients (member including their dependents) were supported by 7.35 million taka for treatment.

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.

b) Life Coverage: In case of the death of a member or any dependent of the member’s family, the following benefits are given under this scheme.

i) Member:       Tk.11,000.00
ii) Dependent : Tk. 5,000.00
iii) Children:      Tk. 1,000.00

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 has to apply through a prescribed format at center, 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.

About 18 families were assisted from this scheme by 0.15 million taka in 2012.


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 money and the coverage was enhanced to 50% of the loan money.


Present Status


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

Table 13: Claims met as of December 2012


Component
No. of claims met
Amount paid in BDT(m)
In 2012
2012
In 2012
2012
Health Insurance
12,265
31,184
7.35
25.76
Life Insurance
700
6520
3.02
17.10
Risk Insurance/Cattle
18
75
0.15
1.02
Total
12,874
37,779
10.52
43.88