In an effort to rehabilitate underperforming microcredit operations, Grameen Trust (GT) introduced a program for rehabilitation services for MFIs. Under this program, in January 2005, GT deputed Mr. Joynal Abdin, a Senior Principal Officer of Grameen Bank, with more than 15 years’ experience, as the Director of Hasnabad Branch of South Asia Research Society (SARS) in India.
The goal of the Rehabilitation Services is to employ an experienced Grameen Bank staff as the chief executive of a problem branch, with full authority for directing all operations within the branch. The GT deployed CEO would implement Grameen innovations, improve all measurable indicators, such as membership, loans disbursed, loans outstanding and repayment collection, and provide on-the-job training of the local partner's staff. The aim is to create a model branch whose operations can be replicated in other branches through the trained local staff.
SARS has been a Grameen Trust partner since the mid 90s. Owing to various unforeseen circumstances, such as staff dropout, and other reasons, the microfinance operations of SARS began to falter.
A major challenge for Mr. Abdin was to implement the new innovations of Grameen Generalized System (GGS) of Grameen Bank II. He has successfully implemented flexible loans, and in one year of operation till January 2006, added 77 new members, set up two new centers, lowered the portfolio at risk from 77% to 47% and the cash balance at the bank rose to Rs. 155,224 in February 2006, from only Rs. 12,190 on 31 December, 2004. Mr. Abdin also introduced new and appropriate loan products to match the demand of the members. This has resulted in an increase in loans disbursed. Under his guidance, old defaulting members have also begun to return to the program.
Report by Tamim Islam