The role of microfinance as a tool for poverty alleviation is well documented. But, MFIs need to go beyond just providing microloans and also innovate new ways to aid in the improvement of living standards of their clients.
Microfinance and Energy
Integrated Development Foundation (IDF), a Grameen Trust partner organization serving the Chittagong Hill Tracts region of Bangladesh, is one such organization that promotes better living standards amongst its clients while helping them achieve financial self-sufficiency by providing small loans for microenterprises.
IDF undertook its Renewable Energy Program on a limited scale in 1997, in order to facilitate household electrification in Chittagong Hill Tracts. The program targeted those who lacked access to the national power grid. In 2003, IDF expanded this program with the support of Infrastructure Development Company Limited (IDCOL), a government owned company which has been implementing the Rural Electrification and Renewable Energy Development (REREDP) with the support of World Bank; Global Environment Fund (GEF); and the Government of Bangladesh.
IDF supplies Solar Home Systems (SHS) to the household on full payment or long term credit (1- 5 years) as per customers’ capability and demand. This credit is collected on a weekly or a monthly basis as per the agreed terms with the customer. It provides 30Wp, 40Wp, 50Wp and 75Wp Solar Home Systems (SHS) on full-payment or 1-5 year term credit, based on the client’s ability to pay. Between January to June 2004 IDF installed 200 SHSs and plans to install 15,000 SHSs in the next five years.
Street Children Get A New Lease on Life
There are approximately 400,000 street children in Bangladesh; half of them in Dhaka city alone. Street children are one of the most vulnerable groups because most of them lack basic necessities of life, like food, shelter, access to health services, sanitation, education and legal services. They are also shut out from financial services. Despite all efforts, urban street children have largely fallen outside the target group of mainstream development programs partly due to their high mobility and tender age.
Padakhep Manabik Unnayan Kendra , a Grameen Trust microfinance partner, has developed a holistic intervention program for the street children of Dhaka and Chittagong cities. Presently Padakhep has been implementing three intervention programs for the street children of Dhaka: Street Children Intervention Program on STD/HIV/AIDS, with the financial assistance of ActionAid, Bangladesh; Appropriate Resources for Improving Street Children’s Environment (ARISE), with the financial assistance of UNDP through the Ministry of Social Welfare; and the Socially Disadvantaged Peoples Program (SDPP), with financial assistance of CONCERN, Bangladesh. Padakhep has also been providing non-formal education support for the street children of Dhaka, Khulna and Chittagong, with financial assistance of the Department of Non-Formal Education (DNFE). About 8,000 street children are now being benefited from these initiatives.
In a program started in 1998 in Mirpur and Mohammadpur areas of Dhaka, about 2,000 youth, both male and female between the ages of 11 to 18 are organized into peer groups of 15-20. Weekly group meetings are organized at the project office, satellite centers and concentration points of the street children. Issues such as social problems, STD/HIV/AIDS, personal hygiene, savings and credit management are addressed in these meetings. Counseling sessions on various issues such as psychological problems, health, education, skill training, legal support, job placement, etc. are also an integral part of the program. There is also a credit program where members who completed 40 weekly meetings were given US$ 80 loan to start small businesses. The credit program also incorporated a savings component. Padakhep has already disbursed US$ 55,000 credit to 1,140 members and 1,500 regularly deposit savings in the program.
In 2000, Padakhep received the Pro Poor Innovation Award amounting to US$ 50,000 as recognition for innovation in financial services for the street children from the Consultative Group to Assist the Poorest (CGAP).