Rotation of vicious cycle of poverty is closely related to personal and family demand and income. The dynamism of the vicious cycle is ultimately revealed when there is no income to meet the compulsory minimum demand. There is no alternative way to generate the family and personal income without proper use of assets, capabilities and potentialities. In this regard, financial services and technical support are consequently needed. But the destitute people cannot utilize their minimal assets, capabilities and potentialities owing to illiteracy and lack of financial investment. In this respect, micro-finance is incorporated with a view to bringing about a positive improvement in the socioeconomic condition of vulnerable people of the development-world. SSS has been providing financial services and nursing to the target people through its credit program since 1991.
Goal and Policy
The main goal of credit program is to alleviate poverty gradually from the society by providing financial assistance and diversifying and increasing income with a view to ensuring optimum alternative use of assets, capabilities and potentialities of the target people. SSS has been implementing its credit program with the following policies:
◊ Organizing target people;
◊ Removing illiteracy and superstition from the society;
◊ Analyzing resources and financial potentialities of the target people;
◊ Making them savings-oriented for the sake of increasing their capabilities and assets;
◊ Providing IGA-related training and technical support;
◊ Providing financial support in IGAs;
◊ Creating self and wage-based employment and ensuring women empowerment;
◊ Increasing accessibility in basic needs with sustainable income and thus gradually forming enriched families.
SSS Micro-finance statistic at a glance as on April 2018
|1.||Number of Districts Covered||31|
|2.||Number of Branches||353|
|3.||Number of Areas||59|
|4.||Number of Zones||13|
|5.||Number of Groups||27.07 Thousand|
|6.||Number of Members||6.27 Lac|
|7.||Number of Borrowers||4.99 Lac|
|8.||Borrower & Member Ratio (percentage)||79.48|
|9.||Number of Agrosar Borrowers||92 Thousand|
|10.||Amount of Member Savings (Tk.)||633.34 Crore|
|11.||Amount of Loan Outstanding (Principal) (Tk.)||1,662.63 Crore|
|12.||Average Loan Size (JAGORON) (Tk.)||39 Thousand|
|13.||Average Loan Size (AGROSAR) (Tk.)||1.43 Lac|
|14.||Savings per Member (Tk.)||10.10 Thousand|
|15.||Savings and Loan Outstanding Ratio (percentage)||38.09|
|16.||Loan Outstanding per Field Officer (Tk.)||87.60 Thousand|
|17.||Agrosar Loan Outstanding against Total Outstanding (percentage) (Tk.)||42.07|
|18.||Portfolio at Risk (PAR) (percentage)||3.37|
|19.||One Time Realization (OTR) (percentage)||98.19|
|20.||Operating Self Sufficiency (OSS) (percentage)||143.66||As on June 2017|
|21.||Financial Self Sufficiency (FSS) (percentage)||141.60||As on June 2017|
|22.||Debt to Capital Ratio (DCR)||3.56:1||As on June 2017|
Implemented Programs and Activities
SSS has been implementing micro-finance program since 1991 for providing financial services at the doorsteps of vulnerable rural and urban people. The organization gradually imparted variation to its micro-finance activities with time, socioeconomic development, demand of clients and under real condition and included savings, security fund, technical services, training, technology and remittance transfer activities and so on to its micro-finance program. The following programs and projects have been implemented during 2016-2017:
SSS has been implementing its microfinance activities following inclusive finance method based on demand and capabilities of group members. It has classified its group members and microfinance activities for keeping up the aspired development of the target people in a balanced way. It also adopted policies to include every social sector to the organizational services. Group-based (Samiti-based) activities have been followed with a view to alleviating social superstitions and developmental ignorance.
Generally a group is formed with 10 to 40 members. According to organizational policy, it is compulsory for every group member to include him/herself in any group for his/her accessibility in credit services. There is also classification among groups based on economic environment, gender and nature of microfinance activities. Group members have to attend the weekly meetings. In the meetings, various ways to improve financial condition, empowerment of deprived and marginal people, food-nutrition, health consciousness, education and culture etc. are discussed. At the same time, member enlistment, savings and instalment recovery, credit proposal, proposal for meeting security fund claim, microfinance policies of the organization and so on are also discussed in these meetings.
The clients can get credit at least after two weeks of membership. Based on the kind of credit program, the amount of credit may vary from Tk. 5,000 to Tk. 50,000. The annual flat rate of service charge is zero to 12.50 per cent. The repayment system may be weekly, monthly or one-time. Generally, the duration of repayment is one year, but it can extend up to maximum two years under special circumstances. Descriptions of credit related programs and projects of SSS are presented below:
Jagaran Microcredit Program: SSS has been implementing Jagaran microcredit activities with a view to providing support to common and lower-middle class families of both urban and rural region for facilitating and developing respectively their financial activities and lands. Jagaran is one of the most important microcredit programs of SSS. This program is expanded over the entire working area of the organization. The loan size under the program fixes at Tk. 15,000 to Tk. 74,000. The service charge is 12.5 per cent (at flat rate of interest) and the duration is one year with weekly repayment system.
Agrasar Microcredit Program: SSS provides Agrasar microcredit for the sake of creating new entrepreneurs, developing existing ones and expanding innovative and traditional activities. Agrasar is also another important component of microcredit program of SSS. Agrasar activities are expanded over the entire working area. In exchange for annual service charge of 12.5 per cent (flat rate), credit amount of Tk 75,000 to Tk. 15,00,000 is provided under the program. The duration of repayment is one year with weekly or monthly repayment system. Agrasar microcredit program has put the sign of widely advancement in the creation of self and wage-based employment and thus alleviating unemployment and poverty.
Sufalan Microcredit Program: SSS provides Sufalan microcredit with a view to keeping seasonal agricultural activities of its group members on-going and developing their resources and capabilities. Marginal and poor farmers keep their economic activities activated easily with the credit money avoiding their capital and technological limitations. Sufalan microcredit is mainly provided on seasonal crops and vegetable cultivation and on beef fattening. It is a supporting credit program of SSS. The credit limit in this sector may stand at Tk. 10,000 to Tk. 50,000. But a group member can receive credit up to Tk. 2,50,000 under special approval. The credit can be received with annual service charge of 12.5 per cent (flat rate) and the duration of credit is three to six months under one-time repayment system. The popularity of the credit is gradually ascending as the farmers get a chance of repaying the credit amount after selling their crops or cows. The program is expanded over the entire working area of SSS.
Buniad Credit Activities: Buniad credit facility is provided to the marginal, vulnerable and destitute families that do not own any visible lands or fixed assets for their livelihood and economic development. Under the program, the target people get training and technical and counsel services simultaneously for their IGA related capacity building. The credit ceiling under the program is Tk. 15,000 to Tk. 40,000 and the annual service charge is 10 per cent (flat rate). The duration of credit repayment is one year with weekly repayment system. Presently, SSS is implementing the program in the determined areas: Tangail, Gazipur, Dhaka, Sherpur, Jamalpur, Kurigram, Rangpur, Sirajganj, Bogra, Jaypurhat, Gaibandha, Pabna, Natore, Rajshahi, Kishoreganj and Mymensingh districts.
Sahas Credit Activities: SSS provides Sahas credit in the working area in order to rehabilitate the affected people both in natural and manmade disasters and bring the disaster-stricken people back to normal life. The amount of credit under the program fixes at Tk. 4,000 to Tk. 6,000 and annual service charge is four per cent (flat rate). The credit repayment system can be weekly or monthly or one-time. The duration of credit repayment is two years. SSS has specially been benefiting its group members with this kind of emergency credits.
Housing Credit: SSS started housing credit activities with a view to solving accommodation problems of families of its marginal-level homeless group members. SSS has been implementing the housing credit program in Tangail since 1999 with the funding of Bangladesh Bank. The credit amount of Tk. 70,000 is provided under the program with three per cent annual flat rate of service charge. The credit can be repaid within four and a half years with weekly repayment system.
Special Credit Program: SSS started Special Credit Program as a subsidiary credit activity for the members under main credit program living in towns and industrial area. SSS has been implementing the program since February 2016. Members can increase their business income, facilitate any income generating activity, purchase household components, buy or lease lands, take advanced treatment, meet educational expenses of children, build or repair houses, arrange social ceremonies and so on with the borrowed money.
Group members who are the second time borrowers and do not have the opportunity to take other subsidiary credits, and who have taken credit of one lac taka or less can get the special credit facility. The duration of repayment is six months and the credit amount fixes at Tk. 10,000 to Tk. 50,000 with annual flat rate of service charge of 12.50 per cent. The special credit program follows weekly repayment system.
OBA Sanitation Microfinance Program: SSS started to implement the project named Microfinance Institutions Lending for Improved Rural Sanitation in Bangladesh from June 2016. The goal of the project is to increase accessibility of rural people to improved sanitary latrines. PKSF and ASA, a partner organization of PKSF and a non-government development organization have jointly been funding the project. SSS has been implementing the project under 10 of its branches of Tangail Sadar upazila. The group members of main credit program of SSS are target people of the project. The families that lack sanitary latrines can take credits under the project to installing improved sanitation system. The credit limit fixes between Tk. 5,000 to Tk. 10,000. The amount is totally free of service charge. The duration of credit is one year with weekly repayment system.
The policies and work-strategies, training and technical assistance of SSS have made its credit program more dynamic and effective to the group members. The overall activities are eventually moving towards ultimate destination of inclusion in order to include people from all sectors of society in financial services. Member-friendly credit program of SSS has made itself popular and development-oriented. The mentionable achievements of SSS during 2016-17 are presented below:
During 2016-17, SSS has disbursed Tk. 2,762.50 crore among 6,86,202 group members under its main components including agriculture in rural and urban economy, fisheries, livestock and poultry rearing, small and cottage industry, small business, services, employment abroad and so on. The cumulated loan disbursement is Tk. 15,355.85 crore. As on 30 June 2017, total credit outstanding is Tk. 1,506.34 crore. Overall credit recovery rate is 99.68 per cent and average per head credit disbursement is Tk. 40,250.
During 2016-17, the amount of credit disbursement has increased to 39.25 per cent and number of group members to 9.24 per cent in comparison with 2015-16.