Atiur Rahman, PhD : Governor, Bangladesh Bank :
Bangladesh has made remarkable progress towards attaining most of the Millennium Development Goals, particularly in the area of education, health, and poverty alleviation. Bangladesh has shown how a developing country with limited resources but strong dedication can soon turn into a middle income one, defying the conventional economic rules. Between 2005 and 2010, the percentage of population living below the upper poverty line has declined from 40 percent to 31.5 percent. A preliminary study by Bangladesh Bank forecasts that this rate will come down to single digit (8.3%) level by 2028. However, despite decade long public and private sector interventions supported by multilateral and bilateral donors, extreme poverty in Bangladesh remains high, which is targeted to be reduced to a lower single digit by 2021. Occasional spells of slow improvement are often followed by backslides in natural calamities pushing vulnerable population groups back into deprivations of extreme poverty.
Prioritizing the poverty alleviation agenda as envisioned in the ‘Outline Perspective Plan: Vision 2021’ the Government of Bangladesh (GoB), has been steadily expanding the social safety net for the poor in its national budgets. Various poverty reduction initiatives of the NGOs are being supported on an extensive scale by the foreign private sector philanthropists, ODA partners, and the Government. Further, substantial volumes of Zakat and other local private sector charitable contributions are helping the poor, mostly as individual rather than institutional initiatives.
Bangladesh Bank led multifarious initiatives of mainstreaming CSR ethos in the private sector businesses is making available increasing volumes of resources for helping out the poor. For some years now, Bangladesh Bank’s CSR guidance and directives are reorienting the banks and financial institutions towards socially responsible financing, benefiting the poorest, augmenting a number of support and credit flows for self-employment, SME initiatives. The CSR campaign is contributing towards redistribution of income from the rich to the poor, ultimately reducing the poverty gap. CSR engagements of the financial sector have expanded several-fold over the past few years, from Taka 554 million in 2009 to Taka 5.2 billion in 2014. Community engagements of the financial sector’s CSR programs focus both on one-off emergency humanitarian and disaster relief, and on continuing support for initiatives widening advancement opportunities for the weaker, less fortunate population segments in terms of healthcare, education and training.
Bangladesh Bank’s multipronged financial inclusion programs, boding mainly on three pillars of agriculture, SME, and green financing, has been supporting the government’s goal of eradicating extreme poverty. The traditional banking system often fails to embrace the marginal, disadvantaged, but productive population segments into the net of financial services due to profit seeking behavior. Since 2009, Bangladesh Bank has therefore been campaigning on financial inclusion as an important tool for combating poverty by reaching out to the unserved and underserved with innovative financial programs, and active participation of the stakeholders. These include, among others, creation of more than 13 million no frill accounts for the farmers, freedom fighters, school children, street children, and wage laborers, channeling credit towards the traditionally neglected sharecroppers in partnership with BRAC (300 thousand sharecropper households have already been covered); introducing mobile financial services (more than 25 million accounts have been opened so far), and refinance window for agriculture, SME and renewable energy. 1.8 million blankets have been disbursed to the hard core poor mostly in the remote areas like Chars (islands) and Haors.
The financial inclusion movement led Bangladesh Bank has made loans available for the rural poor farmers at low interest rates, with flexible conditions and without any collateral. Priorities have been given to the distribution of agricultural loans in relatively underdeveloped areas like Char, Haor and the coastal areas. To renovate the banking services into more humane fashion, Bangladesh Bank has also given special directives to the banks and financial institutions to expand their services to the underserved population segments of the society like physically challenged people, disabled freedom fighters and their families, poor and helpless people facing climate change disasters. For some years now, many banks have extended scholarship programs for the sons and daughters of the extreme poor.
Amid our devoted movement towards uplifting the extreme poor from the destitute circle, it is also important to make sure that in the long run they do not get stuck just above the extreme poverty line due to lack of opportunities that impede progress toward better livelihoods. The sporadic off-and-on attention is never sufficient for quick headway against extreme poverty.
Besides sustained GDP growth at respectable rates, continuous strong engagement and abiding commitment towards opening up meaningful opportunities for all to participate and benefit from inclusive growth will be needed in the diverse programs tackling various dimensions of extreme poverty. The social safety net programs need to be designed in more efficient manner to avoid mistargeting and to target more and more poor.
Bangladesh has made remarkable progress towards attaining most of the Millennium Development Goals, particularly in the area of education, health, and poverty alleviation. Bangladesh has shown how a developing country with limited resources but strong dedication can soon turn into a middle income one, defying the conventional economic rules. Between 2005 and 2010, the percentage of population living below the upper poverty line has declined from 40 percent to 31.5 percent. A preliminary study by Bangladesh Bank forecasts that this rate will come down to single digit (8.3%) level by 2028. However, despite decade long public and private sector interventions supported by multilateral and bilateral donors, extreme poverty in Bangladesh remains high, which is targeted to be reduced to a lower single digit by 2021. Occasional spells of slow improvement are often followed by backslides in natural calamities pushing vulnerable population groups back into deprivations of extreme poverty.
Prioritizing the poverty alleviation agenda as envisioned in the ‘Outline Perspective Plan: Vision 2021’ the Government of Bangladesh (GoB), has been steadily expanding the social safety net for the poor in its national budgets. Various poverty reduction initiatives of the NGOs are being supported on an extensive scale by the foreign private sector philanthropists, ODA partners, and the Government. Further, substantial volumes of Zakat and other local private sector charitable contributions are helping the poor, mostly as individual rather than institutional initiatives.
Bangladesh Bank led multifarious initiatives of mainstreaming CSR ethos in the private sector businesses is making available increasing volumes of resources for helping out the poor. For some years now, Bangladesh Bank’s CSR guidance and directives are reorienting the banks and financial institutions towards socially responsible financing, benefiting the poorest, augmenting a number of support and credit flows for self-employment, SME initiatives. The CSR campaign is contributing towards redistribution of income from the rich to the poor, ultimately reducing the poverty gap. CSR engagements of the financial sector have expanded several-fold over the past few years, from Taka 554 million in 2009 to Taka 5.2 billion in 2014. Community engagements of the financial sector’s CSR programs focus both on one-off emergency humanitarian and disaster relief, and on continuing support for initiatives widening advancement opportunities for the weaker, less fortunate population segments in terms of healthcare, education and training.
Bangladesh Bank’s multipronged financial inclusion programs, boding mainly on three pillars of agriculture, SME, and green financing, has been supporting the government’s goal of eradicating extreme poverty. The traditional banking system often fails to embrace the marginal, disadvantaged, but productive population segments into the net of financial services due to profit seeking behavior. Since 2009, Bangladesh Bank has therefore been campaigning on financial inclusion as an important tool for combating poverty by reaching out to the unserved and underserved with innovative financial programs, and active participation of the stakeholders. These include, among others, creation of more than 13 million no frill accounts for the farmers, freedom fighters, school children, street children, and wage laborers, channeling credit towards the traditionally neglected sharecroppers in partnership with BRAC (300 thousand sharecropper households have already been covered); introducing mobile financial services (more than 25 million accounts have been opened so far), and refinance window for agriculture, SME and renewable energy. 1.8 million blankets have been disbursed to the hard core poor mostly in the remote areas like Chars (islands) and Haors.
The financial inclusion movement led Bangladesh Bank has made loans available for the rural poor farmers at low interest rates, with flexible conditions and without any collateral. Priorities have been given to the distribution of agricultural loans in relatively underdeveloped areas like Char, Haor and the coastal areas. To renovate the banking services into more humane fashion, Bangladesh Bank has also given special directives to the banks and financial institutions to expand their services to the underserved population segments of the society like physically challenged people, disabled freedom fighters and their families, poor and helpless people facing climate change disasters. For some years now, many banks have extended scholarship programs for the sons and daughters of the extreme poor.
Amid our devoted movement towards uplifting the extreme poor from the destitute circle, it is also important to make sure that in the long run they do not get stuck just above the extreme poverty line due to lack of opportunities that impede progress toward better livelihoods. The sporadic off-and-on attention is never sufficient for quick headway against extreme poverty.
Besides sustained GDP growth at respectable rates, continuous strong engagement and abiding commitment towards opening up meaningful opportunities for all to participate and benefit from inclusive growth will be needed in the diverse programs tackling various dimensions of extreme poverty. The social safety net programs need to be designed in more efficient manner to avoid mistargeting and to target more and more poor.
