Dr. Matiur Rahman & Shishir Reza :
The activities of Non-Government Organizations (NGOs) in Bangladesh started around fifty years ago since after its independence. Bangladesh is now also known in the world for its NGO activities. At the very outset NGOs started their work by providing relief to the war affected people by helping them to rebuild their livelihood.
NGOs in Bangladesh have passed away a long time within the last few decades with all its good activities. They reached in the remotest area’s poor people, mobilized them to form into groups for making them aware about health, reproductive health, education, running schools, providing small loans to start their income generating activities (IGAs), etc. The contribution of NGOs to improve social indicators, health indicators and economic condition of Bangladesh is praiseworthy.
At present NGOs are implementing manifold social development works. Some of them have been operating microfinance programme since many years those are known as Non-Government Organization-Microfinance Institute (NGO-MFIs). They are regulating through Microcredit Regulatory Authority (MRA). Until December 2020 there was 746 MRA licensed NGO-MFIs in Bangladesh. Considering the volume of money and beneficiaries (members) some of them are large, medium and small. A large portion of them are small NGO-MFIs.
The NGO-MFIs operate their microfinance programme and other services among the rural and urban poor people who are financially excluded. Most of the beneficiaries of NGO-MFIs are poor women, men, rural producers, small businessmen, petty traders, street vendors, rickshaw-van puller, grocery shop owner, etc. Many of them depend on microfinance as their source of finance to invest in their income generating activities (IGAs), small businesses and to cover personal expenses. They do not get any financial support from the formal banking channel or financial institutions. The NGO-MFIs is their only source of getting financial support. Most of them work at non-formal sector which constitute 80 percent of the labour force of Bangladesh. It is also called that microfinance is the “life Blood” of rural economy in Bangladesh.
A rapid survey (interview) was conducted with the concerned persons of some selected small NGO-MFIs in different parts of Bangladesh to know their role and activities during this Covid-19 pandemic situation. It has learnt that the surveyed small NGO-MFIs are trying to protect their most vulnerable members/ borrowers from hunger by providing one time food packages including rice, potato, salt, soya bean oil, onion, pulse, etc. They provided it to their most vulnerable members/ beneficiaries during last year (2020) lockdown period.
They also provided them soap, hand sanitizer, masks to protect their members/borrowers from the coronavirus. Moreover, they are making them aware up on how to save themselves, their family members and the community people by maintaining social distance and practicing hygienic behavior.
They have stopped collection of loan installment following the instruction of MRA. The borrowers can payback their installment according their convenient time. As a result the service charge income has reduced and the small NGO-MFIs are facing challenges to maintain their operating cost.
The surveyed small NGO-MFIs have also provided facemask, hand gloves and hand sanitizer to protect their staffs (Credit officer, Credit Supervisor, Other office staff) from the corona virus as they are the frontline activists. These staff works tirelessly from morning to dusk among the poor women and men beneficiaries at rural and urban areas. Usually, they have to do their duty in a crowded place so they are at risk of affecting by the corona virus. They are working by taking their life at risk. A considerable number of them have already affected by corona virus and few of them died.
It has also informed that like small NGO-MFIs, medium and large scales NGO-MFIs are also playing a significant role during this pandemic situation. They are protecting their members/borrowers by supporting them through financially and by sharing reliable, life-saving information. They are also protecting their front line workers first by providing protective equipment such as masks and gloves. They have taken a number of preventive steps across the organization, prioritizing the health and well-being of their staffs and beneficiaries.
The NGO-MFIs stopped loan classifications as per the directions issued by the MRA. This meant that default borrowers will not be classified as a defaulter and their borrower status will not be changed. They can pay their loan installments according to their suitability and no restrictions on disbursing new loans. They have also stopped savings collection from the members/ borrowers. However, the members/ borrowers can withdraw their savings to meet their household necessity during this pandemic.
However, the concerned authority of small NGO-MFIs has also mentioned that during Covid-19 pandemic organization’s net surplus income from microfinance programme has decreased remarkably. As a result they are suffering to maintain their day to day activities including providing staff salary.
Although Bangladesh Bank has allocated a stimulus package for the NGO-MFIs but all the small NGO-MFIs could not avail this package. Moreover, during the present lockdown period they again are facing a challenge to sustain. So, they need all out support necessary for successfully meeting the challenges of this pandemic.
There is a debate, criticism and a negative attitude towards NGO-MFIs and their activities. But during this Covid-19 pandemic the NGO-MFIs stood beside millions of poor people in Bangladesh. They are safeguarding their poor beneficiaries by financially, providing them food and hygiene support and making them aware about life threatening coronavirus.
(Dr. Matiur Rahman is Research Consultant, Human Development Research Centre, Dhaka and Shishir Reza is Associate Member, Bangladesh Economic Association)
