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Poverty Alleviation from Islamic Perspective: Lessons from

Grassroot Experiments
Dr. S. M. Ali Akkas∗
Email: akkas54@gmail.com, info@cdss.ingeniousbd.org
Web: www.cdss.ingeniousbd.org

1 Introduction
In spite of phenomenal growth in NGO activities in line with target group approach and
subsequently imitated by GOs, amelioration of poverty in Bangladesh has been evidently
marginal measured by population below poverty line reducing from 53% in 1991-92 to 36% in
1996-97. The situation is further confirmed by the statistics that by late 1995, the Grameen Bank
and NGOs could cover around only 25% of the target group households, with Tk. 16,568 million
(US$ 404 million) in loan outstanding.1 These target group people are not necessarily the
poorest.
The question arises as to why the poorest are left out. And keeping them out of reach
what is the justification for the currently pursued poverty alleviation programs? Does this
situation not warrant for rethinking or at least re-approaching the existing poverty alleviation
programs run by NGOs? Are the government safety nets are directed towards filling the gap and,
if so, to what extent? In absence of a wider and effective government safety nets what is to do
exactly in the present situation?
The aims of this paper are firstly, to show the current status of poverty alleviation
approaches in Bangladesh in respect of the coverage of the poor, particularly the hardcore poor
by the NGOs and government. Secondly, how much of the poorest of the i.e., the hardcore poor
are covered by poverty elimination programs of Islamic NGOs, if any. Thirdly, how far the
Islamic NGO programs are different from that of conventional NGOs in terms of program
nature, coverage to the poorest and, if any, to what extent. Fourthly, an overall length and
breadth of Islamic NGOs has been brought into picture along with two specific cases namely:
Rural Development Scheme of Islami Bank Bangladesh Limited and Hilful Fuzul Samaj Kallyan
Sangstha of Jhalokathi district.

2 Status of Poverty Alleviation Approaches in Bangladesh

Both the lower and upper poverty lines indicate decline in poverty after 1991-92. The
incidence of the very poor declined from 43 percent
of the population in 1991-92 to 36 percent in 1995-
96; the incidence of the poor declined from 59 to 53
percent. Forty percent of the rural and 14 percent of
urban population was very poor. Of the nationally
53 percent poor population, 57 percent was of the
rural, and 35 of the urban population. Urban
poverty has declined the most. Ninety percent of the
very poor and 89 percent of the poor live in rural
areas.2 Twenty three million people are poorest of
the poor in preponderantly rural Bangladesh.

∗
Dr. Akkas has been working in Planning Commission, Bangladesh as Deputy Chief (SHD). The views expressed
in the article is exclusively of his own and in no way represent that of Planning Commission.
1
Wood, G. D. and Sharif, I. A. 1997. Who Needs Credit ? Poverty and Finance in Bangladesh. Dhaka: University
Press Limited. pp. 373-374.
2
World Bank: Bangladesh: From Counting the Poor to Making the Poor Count. April 29, 1998. Pp.6-7.
 2

A short account of the successes and limitations of micro-finance may be listed as below.

2.1 Are the Hardcore Poor Leftout by NGOs?

It is now widely recognized that NGOs have grossly failed to bring the people under
extreme poverty3 (representing 36% of total population) under their program coverage.
World Bank, in one of its recent papers “Reaching the Poorest of the Poor: Some
Actionable Recommendations”4, has provided following observations: “NGOs have been
increasingly switching away from social programs and getting involved in micro-credit
operations to support their activities, particularly with the decline in available grant funding.
However, their borrowers have generally not been the poorest, who are unable to meet the credit
worthiness standards and repay quickly. Since NGOs providing micro-credit have to deal with
banks they have been unable to move away from urban and semi-urban areas to the rural areas
to cater the needs of the poorest.”
The key findings come out of the observation are:
• Poorest are generally out of the reach of NGO programs
• NGOs lending criteria screen out them to be eligible for credit
• NGOs, for their nature of lending mechanism, are unable to move from urban and
semi urban to the rural areas.
UNDP’s observation is also consistent with that of the World Bank. Those who have
benefited from poverty alleviation programs has indicated that the poorest of the poor are
consistently neglected for a wide variety of complex reasons, and have been steadily increasing
over time.5 Based on above accounting it can be estimated that about 25.5 million people are
poorest of the poor in Bangladesh of which 23 million stay in rural areas who are out of the
reach of NGO program coverage.

2.2 Why the Hardcore Poor are Leftout?

The country’s hardcore poor are left out, either by themselves, who self-select out
(because they have neither the resources to pay back, nor do they consider themselves
creditworthy), or by the votaries of the credit program who “edge” them out since the implied
poor recoveries reflect poorly on the NGOs and their field workers. There may have other
structural factors at work, in the size of the average loans as being too big for the hardcore poor
to handle, or in the absence of a differential “soft” lending terms for these poor, both of which
act somewhat as entry barriers for the hardcore poor.6

2.3 Emerging Issues and Constraints for the Conventional MFIs

The existing MFIs have to strike a balance between their capacity to self-finance and the
need to maximise the coverage of the poor particularly the hardcore poor. This has led to emerge
a few important issues and concerns as follows:
(i) Micro-finance services, for their institutional sustainability, must include a
complementary package that adequately addresses the need of the poor for both short and
long term savings, provisions for consumption loans and risk-mitigation insurance
coverage.
(ii) Strategizing for an effective credit and finance delivery system must also take into
consideration both the promotional and protections needs of the borrowing poor.
(iii)Since the poor are dependent on multiple sources of livelihood and support (i.e., from
subsistence farming to daily wage labouring, and from peddling and petty trading to
3
BBS, CIRDAP, H.Z. Rahman, 1998.
4
World Bank, May 12, 1998. “Reaching the Poorest of the Poor: Some Actionable Recommendations”. P.2
5
UNDP. April, 1998. Issues paper by LCG Sub-group on Poverty: Reaching Poorest of the Poor. Unpublished.
6
Fatmi, N. E. Towards a Sustainable Poverty Financing Model: The Proshika Approach. Paper presented at the
IDPAA Workshop on Poverty and Finance in Bangladesh: Emerging Institutional Issues. Dhaka: July 8-11, 1998.
 3

seeking out and accessing assistance, financial or otherwise from a variety of sources,
private, governmental and non-governmental), so only a comprehensive and versatile
financial services’ package cater for.

In spite of that most of the micro-finance lending institutions serving the poor have been
able to record a significant recovery performance and an increased ability on their part to achieve
institutional sustainability, their successes are questioned due to the following sets of
circumstances:

(a) The impact of a loan on borrowers’ income being related to the level of income, MFIs’ credit
schemes are more likely to benefit the incomes of the middle and the upper poor which is
otherwise referred to as non-neutral scale effect. Institutions seeking for their financial
viability are therefore likely to focus their lending to this section of the poor.
(b) The above affluence bias judging from institutional sustainability perspective creates
temptation for the not-so-poor to be members of the credit programmes for the following
reasons:

On risk grounds the hardcore poor are screened out compared to the not-so-poor.

In cases of sudden or eventual losses, the not-so-poor are more likely to emerge as a more
shock absorbers due to their “other” income sources that are not really the case with the
hardcore poor.

There being a strong linkage between poor recovery and the poor performance of the
hardcore poor, this leads to systematic “edge out” of the hardcore poor from the NGO
credit programmes.

2.4 Proshika Approach to Capture Hardcore Poor

The key insights into Proshika’s credit modelling is to be found in the organisation’s
success in pioneering an approach that puts human development at the centre of vision. The
wherewithal for such human development comes from an empowerment process whereby poor
is conscientized, equipped with organisational and practical skills, supported with needed
resources, and infused with the confidence and determination necessary for taking actions to
improve both their social and economic lives. Proshika’s integrated inter-sectoral development
strategy with multi-pronged intervention process to achieve the dual objectives of an outreach
programme to reduce poverty and in enabling the poor to be socially, economically, culturally,
and environmentally empowered involves a core programme component called “Employment
and Income Generating Programme (EIGP)” with the following building blocks:
• A conscientized and enthused groups of the landless and disadvantaged
• Saving of these groups
• A special provision of credit from a Revolving Loan Fund
• Technical assistance component providing skill and management development training and
on-the ground technical advice and support, and
• A provision of marketing assistance where needed.

2.5 How Effective the Government Safety Net Programs in Poverty Alleviation?

Public Expenditures
Effective public spending, including spending on rural and urban infrastructure in
addition to social sector programs and safety nets, can reduce poverty. Social sector programs,
i.e., health, education, and safety net programs are the fastest growing public expenditures in
Bangladesh. In 1989-90 social expenditures made up 10% of total Annual Development Program
 4

(ADP) outlays. By 2000, according to the Fifth Five Year Plan, ADP expenditures on social
sectors will amount to 30% of total ADP spending (more than Tk. 6300 crores).7 Most of this
rise will finance education and health, two sectors that are important for the poor. But by dint of
general nature, remoteness and lack of access and affordability the poor benefit less or in most
cases these provisions are out of the reach of the poor, particularly of the poorest except the
safety net programs specially designed and targeted for them.

Government Safety Net Programs

Public safety net programs can also protect the poor. Do these programs attain their
objectives? Are they well-targeted?

Three biggest
government safety Public Foodgrain Distribution
net programs are
Food For Works
1200
(FFW), Food For Wheat
Education (FFE), 1000
Total
Thousand Tons

Vulnerable Group
800
Development (VGD)
Program (for dis- 600
advantaged women), FFW
and Test Relief (TR). 400

Among these 200

FFE
programs Food for VGD
Works is the largest, 0 TR
but the fastest 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96
growing and second
largest program is the
Food for Education.

Shortcomings of Safety Net Interventions

Food Assisted Interventions

1. FFP and VGD generally address only the immediate needs of the poor and do not promote
sustainable livelihoods for the beneficiaries; for longer term impact such interventions need
to be supplemented by support services for enhancing the capabilities of the ultra poor.
2. Fail to address acute food security needs during periods of seasonal deficits
3. Compete with agricultural activities and labour demand
4. Marginally reach geographical areas of extreme poverty
5. Are costly.

Education Interventions
1. Variations exist within the poor households themselves, the poor households in general
receiving nearly three times more benefit than the ultra poor
2. Leakages from FFE to non-poor groups are estimated to be as high as 26%.

7
Ibid. p.37.
 5

2.6 Comparative GO, NGO and Islamic NGO interventions

A wide spectrum of anti-poverty programs are in practice in Bangladesh both at
governmental and non-governmental levels. Available statistics shows that in 1997 Conventional
NGOs have played a leading role in poverty
alleviation programs in Bangladesh. Compared to
NGOs’ 70% contribution to micro-credit financing,
GOs and Islamic NGOs provide respectively only Micro-finance FY97/98
29% and 1%. This depicts a very insignificant role of
Islamic NGOs in the poverty alleviation initiatives in GOs
Bangladesh. It should be noted that Islamic NGOs 29%
include only 24 responding organisations out of 58
registered under Association of Muslim Social Is-NGOs
Welfare Organisations (AMWAB). Similarly, figure 1%
under GOs does not include Grameen Bank credit NGOs
70%
operation which may itself account for about ….. %
of total poverty alleviation programs in Bangladesh.
Table- depicts that out of total Tk. 16,271
million (Tk. 1627.1 crores) disbursed, conventional
NGOs (363 donor-funded NGOs) disbursed more than two and a half times than that of done
under different types of poverty alleviation programs of the government including government
safety net programs like Food for Works, Food for Education, Vulnerable Group Feeding and
Test Relief.

Program coverage in terms of reaching to number of target group population, Islamic NGOs
8 ,0 0 0 ,0 0 0
account for less than 5% of compared to that
6 ,0 0 0 ,0 0 0 of the conventional NGOs. Against 6.6
4 ,0 0 0 ,0 0 0 million members attached to conventional
2 ,0 0 0 ,0 0 0 NGOs, Islamic NGOs have been able to
- reach 0.4 million target group population.
M e m b e rs

NG O s FY 97* I s la m ic N G O s F Y 9 7

NGO Programs
Some 20,000 NGOs
have registered to date with the N u m b e r o f fo re ig n fu n d e d L o c a l a n d F o re ig n
N G O s in 9 0 s
Department of Social Welfare.
The NGO Affairs Bureau has
1400
registered 1,185 foreign-funded 1200
T o ta l
NGOs by November 1997, most 1000
of them are local. The figure 800
L o c a l NG O s
includes 140 foreign NGOs. 600
400 F o re ig n NG O s
Grameen Bank and 200
NGOs could cover around only 0
25% of the target group
1

8
90

-9

-9

-9

-9

-9

-9

-9

-9

households, with Tk. 16,568

19

90

91

92

93

94

95

96

97
19

19

19

19

19

19

19

19

million (US$ 404 million) in

loan outstanding.
 6

Successes
By late 1995, the Grameen Bank and NGOs covered around 25% of the target group
households, with Tk. 16,568 million (US$ 404 million) in loan outstanding.8 Coverage varies
substantially from area to area and between social groups. Areas with poor roads, low level of
economic activity and weak NCB infrastructure have benefited little from micro-credit. NGOs
and Grameen Bank have performed much higher levels than government credit schemes and
their achievements compare very favorably with all other anti-poverty strategies in the country.
Results have been so impressive that Bangladesh has now been a center of micro-credit ideas,
although it is still a recipient of ideas of savings. Currently, most of the savings generated by
these institutions tend to take the form of "required fees" for receiving credit, only to be recycled
into Revolving Loan Funds and not generally withdrwable. Deposit banking has not been
experimented with by these institutions, although other countries have made successful advances
in this area.

Constraints
While these institutions have managed to extend micro credit services to the poor, all the
major NGOs and Grameen Bank admit that they have serious problems in reaching the hard core
poor, resulting in limited coverage. They have required high level of subsidy to establish their
programs, provided by donors. However, with high recovery rates, increased effective lending
interest rates and improved management, subsidy dependence is dropping. A number of factors
constrain the performance and outreach of NGOs and the Grameen Bank.9 These:

3 Need for Rethinking Conventional Approach to Poverty Alleviation

The level of success in reducing poverty in Bangladesh has been achieved by several
socioeconomic interventions through GOs and NGOs of which micro-credit approach gains
wider appreciation in spite of its limitation.
Latest findings also confirm that even the most successful NGOs face the challenge of their
organizational sustainability along with the problem of borrowers sustainability.
A rapid look on the limited success and constraints poses a number of fresh questions on the
conventional NGO programs.
The question arises as to why the poorest are left out. And keeping them out what is the
justification for the currently pursued poverty alleviation programs? Does this situation not
warrant for rethinking or at least re-approaching the existing poverty alleviation programs run by
NGOs? Are the government safety nets are directed towards filling the gap and, if so, to what
extent? In absence of a wider and effective government safety nets what is to do exactly in the
present situation?
In view of the above questions the time has come to have a second look on the analysis of
the causes of poverty and the strength if not effectiveness of the design and delivery system of
the mass-discussed target-group approach. This is in no way undermining or negation of the
contribution of NGO movement in fighting poverty but to draw attention of the need for
improvement and search out new possibilities or innovations. It can not be denied that whatever
is being done and with whatever successes by Islamic NGOs, owe significantly to the NGO
concept of development in terms of approach, design and delivery mechanism. Still the inability

8
Wood, G. D. and Sharif, I. A. 1997. Who Needs Credit ? Poverty and Finance in Bangladesh. Dhaka: University
Press Limited. pp. 373-374.
9
Ibid. p. 173.
 7

of the NGOs to reach the hardcore poor has shattered the confidence on current approaches and
leads to think for new approach, design and delivery mechanism.

4 Rural Development/Financing under Islamic Framework: Field

Experiences

4.1 Review of the Poverty Alleviation Initiatives by Islamic NGOs

Rural development initiatives under Islamic framework in Bangladesh are of recent origin.
With some rare exceptions the initiatives in this line are of the phenomena of nineties. Even
those who started earlier can hardly be termed as rural development initiatives. Rabitat-al Alam
Al-Islami is perhaps the only organisation that started its relief activities in 1977 among the
rahinga refugees and then extended its operation among the biharis in Dhaka and tribal people in
Chittagong Hill Tracts and Rangpur. Origination of the organisations like Islam Procher Samity,
World Assembly of Muslim Youth, Islamic Education Society can be traced back to 1970s but
they did not have any credit component in their programs. Few dozens of Islamic NGOs are
working with micro investment as one of their program components from end eighties or early
nineties.
At present 58 Islamic NGOs are working in Bangladesh. They can be divided in to five
categories in terms of program type as follows:
(a) Organisations with credit only as program component
(b) Organisations with credit plus as program components
(c) Organisations with relief and rehabilitation as program component
(d) Organisations with education, culture and research as program components
(e) Organisations with preaching as program component

Table-1 shows that 10 organisations are working with credit only approach whereas 35
organisations are operating on credit plus principle having program components like non formal
education, health and sanitation along with micro investment. Three organisations are seen to be
doing relief and rehabilitation, four are engaged in education, cultural and research activities and
two in preaching. Organisations with either ‘credit only’ or ‘credit plus’ approach, follow target
grouping strategy in their investment financing and apply ‘bai muazzal’ or deferred payment as
financing technique.
Table-2 provides information on 24 organisations as regards their year of establishment,
coverage area, number of groups and members belong to each of them and the outstanding
investment they have made in 1996. A rapid look on the year of establishment of these
organisations depicts that except very few like Muslim Aid Bangladesh, Bangladesh Chasi
Kallyan Sangstha, Bangladesh Masjid Mission and Hilful Fuzul Samaj Kallyan Sangstha the rest
of the organisations came into being after 1994. Within this short period of time the
organisations have formed 10,820 groups comprising 407,064 members. They have so far
invested an outstanding amount of Tk. 108,089,693.
Compared to conventional NGO activities all over Bangladesh, extent and coverage of
Islamic NGOs are extremely insignificant. While conventional NGOs have …….. members and
outstanding of Tk. …….., achievement of Islamic NGOs is not more than …… %.
Evolution of Islamic NGOs in Bangladesh is a response to the urge of safeguarding Islamic
way of life in the face of massive penetration of ‘sud’ or interest in rural areas through
conventional NGO approach. One of the glaring feature of these initiatives are exclusively
indigenous in terms of organisation and source of fund which are considered to be building
blocks for any effort towards sustainability.
NGO activities in Islamic line are yet to evolve rural development scheme as perceived by
Islamic economists. It has not been in most of the cases that rural development or rural financing
 8

schemes under Islamic framework have been organised centring the mosque. These organisations
have come into being as a result of spontaneous local initiatives. To the extent information are
available none of the organisations have been able to introduce a complete and effective package
of borrower graduation as yet since organisations with credit plus approach could not yet
introduce regular asset transfer mechanism based on Zakat. Similar to the conventional NGOs
these organisations also do not allow beneficiaries/borrowers’ the access to their savings. Of
course, considering the length of the period of their operation one can not expect such types of
achievement in the so early phase of their evolution.

4.2 Rural Financing Scheme of Islami Bank Bangladesh Limited

Islami Bank Bangladesh Limited envisions for an economic system based on equity and
justice. Taking into consideration that the majority of the population below poverty line live in
rural Bangladesh, the Bank has devised a “Rural Development Scheme (RDS)” with a view to
create employment opportunity for them and alleviate their poverty through income generation
activities.
The IBBL through its RDS project has been implementing integrated programs for the
landless poor, wage labourers and marginal farmers aimed at meeting their basic needs and
promoting their comprehensive development. Conscientisation among the poor needs to be
enhanced so that they can firm up their position in the socio-economic structure of the country.
In order to consolidate their economic base invested money should be used in income generating
activities so the poorer section of the population become self-reliant. RDS works for the
realisation of that objective.

Rural Development Scheme of IBBL: Goals and Objectives

The followings are the important objectives of IBBL’s Rural Development Scheme
objectives:
1) To bring the poorer population within an organisational framework by setting up certain rules
and regulations with a view to free them from the curse of poverty and make them self-reliant
thereby converting RDS into a self-reliant sustainable program;
2) To extend bank investment to agricultural and non-agricultural sectors in the rural areas;
3) To invest on employment and income generation activities of the rural population;
4) To provide self-employment for the distressed people;
5) Socio-economic development of the poor and distressed by group/centre formation;
6) To bring both male and female to provide employment under income generation activities
and help them to attain self-reliance step by step;
7) To continue to support the self-reliance drive of the poor in their endeavour to capital
formation from savings they make out of their increased income;
8) To help reduce and eventually stop, through enhancement of their income, the lending on
high and exorbitant rate of interest by the village money-lenders, the advance sale of crops,
land and mortgage of land by the poor during their acute needs.
9) To follow an approach of comprehensive development side by side their economic
development; and
10) To provide financing for hand tube-well and housing in the areas.

Selection of Beneficiaries
RDS scheme of IBBL is target group-based. Beneficiaries of the scheme are thus landless,
wage labourers and marginal farmers. Selection criteria for members of the target group are as
follows:
 9

(a) Farmers owning up to 0.50 acres of land including sharecroppers;

(b) Persons engaged in non-agricultural activities owning up to 0.50 acres land or landless;
(c) Be permanent resident of the project area;
(d) Borrower or defaulters of any other bank or organisation will by no means be the
beneficiaries of the scheme;
(e) Females belonging to the families of the serial 1 and 2 above interested in income earning
projects but unable due to dearth of money may form group and take the financial support;
(f) Distressed people may undertake income generating schemes in non-agricultural sectors such
as cow/goat/duck/chicken etc. for their self-employment;
(g) Landless to be given priority in selecting target groups whose yearly family income must be
below Tk. 15,000/-.

Group Formation and Management of the Scheme

Activities of the RDS scheme are organised in-groups. Each group consists of five
members. People with same mentality, age and financial status who are trustful to each other are
considered for group formation. Group members should be from the same village. A person
being permanent inhabitant of the village and having land not more than 0.50 acre and annual
income of his/her family not exceeding Tk. 15,000.00 is considered as eligible to be a member of
a group. Not more than one member from a family can be member of a group and the group can
not be formed with kith and kin. With these restrictions group members are free to choose their
compatriot as they like. Group members elect their group leader and deputy group leader from
among themselves. There can be 2 to 6 groups in a para, mahalla or village forming a Centre.
Group leaders and deputy group leaders of all groups, in a meeting, elect a Centre Leader and a
Deputy Centre Leader.
In order to formalise group formation and formation of the centre and that of the election
of the group leader, deputy group leader, centre leader and deputy centre leader all members of
the centre are required to promise themselves, through adopting resolutions that they will abide
by the rules and regulations of the group/centre. They sit for a weekly centre meeting the date,
time and place of which are determined by themselves according to their convenience.
Group formation and subsequently emergence of a centre are the result of constant effort
and intensive supervision of a field supervisor. Generally a field supervisor is responsible to
supervise 40 groups or 200 members. Field supervisor is recruited few months ahead of the
group formation and initiation of investment activities. Soon after the appointment a supervisor
is required to motivate people, mobilise supports, conduct base-line surveys, form groups and
conscientise the group members. Preferably a field supervisor should be a local person with a
minimum graduation degree.
The entire activity of RDS is co-ordinated and managed from a branch office of IBBL by
a project officer who is responsible to a committee headed by the bank’s branch manager. The
project officer supervises the activities of the field supervisors in the entire command area of its
operation. He provides instructions and suggestion to the field supervisors in implementing the
project. While forming groups the project officer attends the meetings. He organises training for
the group members and ensures, through the field supervisors, the attendance of the group
members in weekly meetings. He keeps a constant eye on the investment disbursement, timely
repayment of weekly instalments and savings deposits and adherence of other rules and
regulations by the group members. Investment vouchers preparation, filing of documents and
production of monthly investment balance sheets are among the few other regular activities of a
project officer.

Collateral-Free Investment Financing

Investment financing under RDS program of IBBL is generally collateral-free. Extremely
rigorous supervision and mutual guarantee provided by each member of the group have become
 10

effectively a good substitute for collateral in traditional sense. In addition to that, strict adherence
to group rules and regulations ensures appropriate selection of borrowers.
Of course, fish culture in ponds and purchase of agricultural and irrigation implements
require support collateral in the form of equitable mortgage. Moreover, each member of the
group are required to provide personal guarantee for his group.

Investment Financing: Mechanism, Modes and Avenues

Investment financing starts after at least three months observation of the group members
in terms of regularity in their attendance in weekly group meetings, centre meetings, and deposit
of their personal saving. Two members from each group selected by the group members are
considered for investment financing. Rest of the group members become eligible for finance
after recipient group members have paid their 2 or 3 repayment instalments.
Investment proposals recommended by group/centre members and collected by field
supervisor are approved, after careful checking and scrutiny, by the Investment Committee
headed by the Bank’s Branch Manager with the Second Officer or Investment Officer and the
Field Supervisor as members. The Investment Committee meets once in a month. Soon after
approval of the investment proposals by the Investment Committee documentation takes place
followed by financing under a particular investment mode. Banking as well as Shari’ah rules are
required to be followed appropriately. Amount charged on an investment is 12% (i.e., profit 6%,
supervision fund 4% and risk fund 2%). The Islamic modes such as Musharakah, Mudarabah,
Bai-muazzal, Murabahah, Hire-purchase and Bai-salam are prescribed for application in
financing income generating activities of the group members.

Recovery Process
It is believed that good recovery of invested money depends on fixing a well-thought-out
instalment. Amount and number of instalments are to be fixed considering earning from the
investment and the time interval takes in one investment-gestation-return cycle. The following
considerations are taken into account while fixing an instalment:
(i) For non-agricultural sector instalments may be on weekly/monthly/quarterly basis. Weekly
instalments are preferred since it makes the borrower mentally tuned of repaying the
instalments in short intervals leading to good recovery. Fixing of 45 repayment instalments
along with profit are prescribed allowing two weeks time as gestation period, 2 instalments
off during two Eids and 1 instalment optional if there is an accident.
(ii) Instalment fixation for agricultural sector depends on cropping cycle. In case of vegetable
and green curry production, weekly instalment allowing longer gestation period is suggested.
(iii)Generally all investments are repayable in weekly equal instalments. In exceptional cases
with income generated beyond the date of instalment payment, a timely token payment is
advisable followed by payment of the residual amount along with the next due instalment.

Avenues of Investment
Other than agricultural activities seven categories of non-agricultural activities in the
rural areas are financed under RDS program of Islami Bank Bangladesh Limited. The categories,
number and the types of activities financed under each category are presented in Table-6.

Critical Evaluation of IBBL’s RDS

If considered in terms of reaching the poorest of the poor, RDS seems not to be different
from either Grameen Bank or traditional NGOs whose target group approach, both with design
and delivery mechanism, is essentially replicated by it, if not the modes of financing. This is
reflected by the same selection criteria used by the RDS as have been generally applied by the
conventional NGOs while selecting the group members that screens out the poorest of the poor.
For example, the sole criterion i.e., the requirement of being permanent resident of the project
 11

area and regular attendance in the weekly meetings for loan eligibility, is sufficient enough to
disqualify the poorest of the poor to be the beneficiaries of the RDS program.

4.3 SUSTAINABLE DEVELOPMENT APPROACH - A CASE STUDY ON HILFUL

FUZUL

It is hardly found in Bangladesh that poverty alleviation programs at non-governmental

level are self-financed and originated and developed entirely on local initiative. Probably, Hilful
Fuzul Samaj Kalyan Shansgtha (HF) is the only exception that emerges out of local initiative
without taking support either from the government or from any donor agency of local or foreign
origin. 10 Their main activities are still based on local resources mobilised and invested in the
area of their operation through shares, deposits and savings of the members of the organisation.
It is the recent phenomenon that the organisation has been taking some funds from Palli Karma
Sahayak Foundation of the government to undertake specific program for the hard-core poor. In
contrast to the so-called target oriented conflict approach to poverty alleviation programs, the HF
presents a different design and delivery mechanism. It ensures participation of peoples from all
strata and benefits each of them. It collects funds mainly from the rich and makes these available
for the use of the poor. Thus the approach followed by HF may be called a target oriented
harmony approach to poverty alleviation program. The guiding principles of the organisation are
Quranic teachings which are free from sectarian approach to caste, creed and religion.

The organisation is based in a far-flung rural area in the southern part of the country in
the district of Jhalakathi. It was established on September 4, 1991 and was registered under the
Department of Social Welfare on June 8, 1992 with Registration No. 77. The Head Quarter of
the organisation is at Dapdapia bazaar under Nalchhiti thana of Jhalakathi district. HF has spread
its activities in five thanas of two districts namely Jhalakathi and Barisal.

Design And Delivery System Of Hilful Fuzul Poverty Alleviation Programs

Poverty Alleviation Programs of Hilful Fuzul

Hilful Fuzul Social Welfare Organisation has been striving for the economic upliftment
of the rural people, for the improvement of their social condition, for inculcating values in them
and for the establishment of an interest-free transaction mechanism. It has been working for the
rural people in different aspects related to their basic needs such as food, clothing, housing,
health and education under the programs such as :
A) Islamic Savings Project
B) Co-operation programs
C) Education for all
D) Self-reliance and employment creation schemes
E) Health and development activities.

Distinguishing features of Hilful Fuzul

10
Abu Naqi Rizwanul Huq, S. M. Ali Akkas and Zubair EnamulKarim ”Role of Local Initiative in Alleviating Rural
Poverty: A Case Study of Hilful Fuzul” Vol. No. , 1997.
 12

Four distinguishing features of HF have been identified. They are :

(i) Credit operations of HF are based on profit and loss sharing;
(ii) It receives deposits mostly from the rich and disburse
(iii) them mainly among the poor;
(iv) Credit operation is based on resources which are essentially mobilised from local sources.
(v) Special programs are initiated by HF for moral upgradation of the beneficiaries.

The above special characteristics may also be considered as the indicators of

sustainability. Particularly, lending operations altogether based on growing local resources can
be a unique example of sustainability of the programs (if the source is itself sustainable). It is
observed that locally mobilised funds have generated at the rate of 115% on and average each
year. Table-15 demonstrates that cent percent respondents replied positively that HF's funds are
locally generated. In the same table 90% of the respondents confirm that HF received deposits
mostly from well-to-do and lends most of them to the poor.

Further if the lending program is based on profit and loss-sharing it is more participatory
in nature. It is by mechanism more sustainable. 75% of the respondents have told that HF credit
operations are based on profit-loss-sharing (Table-15).

HF why sustainable

Table-16 presents a summarised picture of why HF is a sustainable organisation in the

field of community development. Cent percent of the respondents have told that it is sustainable
because :
(a) HF is a program which has ensured participation of people from all strata;
(b) HF has been successful to mobilise resources from local sources on the basis of which it has
been conducting its lending schemes;

(c) It has been successful to ensure cent percent repayment;

(d) The lending operations have been consecutively being profitable; and
(e) It has also been successful in maintaining effective supervision and the members have been
found to be very sincere and committed.

Critical Analysis of The Hilful Fuzul Case Findings

Feature, approach, design and delivery system of HF

Poverty alleviation programs of HF is aimed at fulfilling basic needs of the poorer
sections of the rural people. Its programs include most of the areas of basic needs but have little
application or coverage beyond promotion of economic well-being. In other words, it has
extensive program coverage but still now the concentration lies on the income generating
activities. The organisation has programs like lending to the poor, providing them with adult
education and health facilities. Besides, they provide religious education to the members of the
organisation.

The special feature of the organisation is that it has been undertaking welfare activities
for the poorer section of the population through generation of fund locally from people of all
strata and giving loans to the poorer sections of people through interest-free transaction modes.
They have their lending mechanism like Musharaka (partnership), Mudarabah (profit-sharing),
bai-salam (deferred payment), Murabaha (Mark-up or cost-plus based financing) and Qard-
 13

hassan. But among the modes Murabaha and Bai-salam are of the common practices. Practice of
Musharaka was under experimentation in a very limited scale the study found.

The approach followed by the organisation in alleviating poverty is obviously a

target-group based. But the speciality of the program in designing its delivery system is that it
collects funds from general local people irrespective of their level of income (in the form of
share, term and fixed deposits and different types of savings scheme including saving schemes
for the landless/assetless) and invest fund into activities entirely undertaken by the poor people.
Loans are disbursed among the members in groups of five. Decision for giving a loan to a
particular member of a group is decided by the group itself in the presence of an area supervisor.
Funds are collected on area basis. The fund is further strengthened by the compulsory weekly
saving and repayment mechanism. Unlike other conventional target-group approaches another
speciality of HF delivery mechanism is that it has made a scope for its members to take
interest-free loan, (Qard-hasan) at a certain percentage from his saved amount in periods of acute
needs.

Another feature of the HF poverty alleviation program is that most of the members of the
organisation belong to young age group. There is a greater concentration of the program among
the educated section of population. Illiterates including those who can only sign cover one third
of HF members. In an area where literacy rate is very closer to the national rate, greater
concentration of activities among the educated is worthnoting. If seen from the context of asset
holding 86% of the respondents of the program belong from landless to marginal farmer
category. This is undoubtedly an indication of the soundness of the program when seen from a
perspective that lending activities of the association are completely based on locally mobilised
funds.

In short, credit operation based on profit-loss-sharing modes and loan operation

principally among the poor out of funds mobilised mostly from the well-to-do section of
population are the distinguishing features HF poverty alleviation program. the added dimension
to this program is reinforced by some special activities aiming at moral upliftment.

Success and failures of Hilful Fuzul

Growing popularity and rapid expansion of the program might be considered as good
indicators of success. During the last years of activities members have increased on and average
251 and the average yearly increase of deposits in different types of account has been increased
241. The total number of members increased from 583 in 1993 to 2605 by April, 1995. The
percentage of members already received loans in nearly 40% (1994). During the period under
study average amount of loans has increased from Tk. 1300/- to Tk. 6,000/-. It is recorded that
81% of the members received loan within two weeks of their application. Average monthly
income of the beneficiaries increased from Tk. 2412/- in 1993 to Tk. 3328/- in 1994. Average
yearly savings of the beneficiaries became double within the same period of time from an
amount of Tk. 423.60 to Tk. 884.50, 100% of the respondents replied that compulsory weekly
repayment of loans are invariably made.

There have been very few cases of losses/defaulting which were easily offset by profits
earned by HF from rest of the investment activities. 5.8 Most of the investment financing
activities of HF are carried out under mark-up based mode. The mark-up charged varies from
20% to 48%. In other words, Musharaka and Mudarabah, the real mode for profit-loss sharing,
are practised in a limited scale still on experimental basis. But the mark-up charged by
conventional banking context is simply a mechanism of loan financing but in the case HF they
 14

don't give any loan. Instead, they give money in kind. This ensures productive use of borrowed
resources. This, in turn, helps timely recovers of borrowed money.

Sustainability
In terms of criteria set as indicators of sustainability, the HF poverty alleviation schemes
have been found to be sustainable. 95% of the respondents recognised that their economic
conditions had been improving gradually. Similar percentage of respondents replied that the
program had been contributing to the improvement of employment situation in the area under HF
operation. Members are getting increasingly self-reliant. Greater percentage of the HF members
are becoming self-confident to lead a better life. 100% of the respondents noticed that HF
activities had brought about social cohesion, improved relations among different social groups
and ensured participation of people from all walks of life.

Sustainability defined in terms of expansion of activities (expressed in the number of

members, growth of deposits and lending activities) indicates that the program has greater
tendency to be sustained. Membership has multiplied by 2.5 times during 93-94 while deposits
increased by 2.4 times during the same period. If recovery of loan is considered as another
important indicator of sustainability, it appears to be that HF activities will go on sustaining since
rate of recovery is nearly 95% during period under study.

Summary of the Hilful Fuzul case findings

As it has been found in the study that activities conducted by HF is distinct from
conventional approach to poverty alleviation programs in terms of its sources of funds, delivery
mechanism and acceptance of Islam as its core ideology. Reconstruct of material life in line with
Islamic teaching is the core objective of HF activities. Perhaps HF is the only NGO whose larger
amount of funds come from the indigenous sources mostly from the areas of its operation. A
financing mechanism based on indigenous/local sources ensures the activities of the organisation
to be self-sustaining particularly when the amount of transaction is found to be rapidly
increasing. The delivery mechanism of HF has been found to be more beneficial and
humanitarian by the allowance of members to take loan from their own savings scheme at time
of acute needs. All these distinguishing features have made the HF approach an improved
concept of poverty alleviation program. Seen from the viewpoint of social harmony and
cohesion, the approach has been able to falsify the belief that successful poverty alleviation
program must be designed essentially for the poor, of the poor by the poor. HF has been able to
prove that a target group approach (pro-poor approach) may also work with the help, assistance
and participation of people from all income groups.

In spite of the above strong sides of the HF poverty alleviation program it has some
weaknesses as well. Of course, the weaknesses to be mentioned here might be due to very short
period of its operation (three and a half years) which did not permit to do all the things required
for a poverty alleviation program to be successful. Among the weaknesses, the few important
ones are : (a) relatively limited and late application of social activities along side the income
generating activities and (b) massive application of mark-up financing in conducting income
generating activities. In the context of the above findings denoting strengths and weaknesses of
HF, the following recommendations may be forwarded for considerations.

Among the poverty alleviation programs currently under implementation in Bangladesh

(governmental and non- governmental) HF contains a distinct identity and emerges as a superior
concept in terms of design and delivery system and sustainability of the program. In contrast to
 15

the target-group based conflict approach, the program has been successful to ensure participation
of different income groups of all strata in order to promote principally the well-being of the poor
and ultra poor. The strength of the program is further exemplified by the mobilisation of funds
from among the local people in the form of share, deposits and savings and utilisation of them
for financing income generating activities undertaken by the poor. The organisation has in its
canvas a number of socio-economic activities and environment protecting programs which
provide a package for human development components. Though the social programs are yet to
take full attention and consolidation, the attempt has been applauded by the local
people-beneficiaries and non-beneficiaries.

The program has turned to be a program for the common people irrespective of sex, sect and
caste. An increasing participation of female and non-Muslims ensures that the program is free
from so-called religions fanaticism. The program has been successful to take use of the local
culture and reinforced by pattern embedded in the heart of the local people. In other words, the
programs has turned to internalise the development process which receives strength from within
and not from outside.

5 Towards a More Effective Approach to Poverty Alleviation

The whole journey of development initiative for poverty alleviation, starting from
community development approach to target group approach, has come to a stand still position by
the sudden realisation that the hardcore poor are left out from all ongoing NGO-led development
activities, be it conventional or Islamic. It is now widely accepted that design and delivery
mechanism of the present NGO activities prevent the hardcore poor to exclude themselves from
these programmes. Assessment of current NGO programmes uncovers two major inadequacies
for which the hardcore poor find these unsuitable for them. These are:

Lack of supportive minimum asset base of the hardcore poor to cope with the repayment
mechanism of the current NGO programmes;

Mobility of the hardcore poor for their survival earnings;

Remoteness or inaccessibily to the hardcore poor in terms high delivery cost of services
challenging financier’s sustainability.
Design of an effective program is must take into consideration all the above mentioned
inadequacies of the current NGO programmes: conventional or Islamic. Although the
conventional NGO delivery mechanism may not have easy way out to reach the hardcore poor,
Islamic NGOs should certainly have if their borrowed design and delivery mechanism is changed
and oriented and derived from true spirit of Islam. Essential features/components of such a
programme might be as below.

5.1 Essential features of a Suitable Islamic Poverty Alleviation Scheme to bring

the Hardcore Poor in its Programme Coverage
The proposed scheme suggests some improvement in the Hilful Fuzul Samaj Kalayan
Sangtha (HF) approach to poverty alleviation in order to fit it to be able bring the hardcore poor
in its programme coverage. While assessing HF it has been mentioned that the programme is
sustainable by all considerations: (a) as it is financed principally out of resources mobilised from
its own areas of operations; (b) mobilised funds are loaned out to the poor under modes of
investment generally applied by Islamic banks in Bangladesh following a target group approach
as practised by conventional NGOs. That means, the programme has built a capital transfer
mechanism from the richer sections of population towards the poor which has made it
extraordinarily different from conventional NGO approach to poverty alleviation. Yet the
programme is blamed with the same limitation as of the conventional approach this also could
not touch poorest of the poor by their programme coverage.
 16

5.2 Suggestive Change in HF Programme

However, some modifications in the following directions of the HF programme may bring
an improvement to fit it to the requirement that will enable it to simultaneously create
opportunity in its programme coverage for the hardcore poor in which they will find themselves
integrated.
The HF may think for collecting Zakah on shares of members (eligible zakah payers or
saheb-e-nisab) in order to create a Zakah fund. This will provide HF with an opportunity to build
a fund from which it can transfer asset on regular yearly basis from the rich to the hardcore poor
for preparing the latter to be eligible for receiving micro finance from HF. Of course, adding this
programme component to the existing design and delivery mechanism of HF warrants to take
sufficient care and attention in terms of promoting motivational programme to save original
structure of the programme from potential crack down.

5.3 Suggestive Change in IBBL

Similarly, the IBBL may think for integrating Bank Foundation activities to that of its
Rural Financing Scheme in order to bring the hardcore poor in its programme coverage. Other
NGOs working under Islamic framework may also add this component to their original
programme in order to create access for the hardcore poor.

6 Conclusion
Grass-root experience of poverty alleviation under Islamic perspective does not show much
encouraging feature. Most of the Islamic NGOs are implementing their activities on the basis of
a design and delivery mechanism borrowed from conventional target group approach. Almost
invariably and commonly used mode for financing by these organisations is ‘murabaha’.
Hardcore poor are rarely or not at all touched by these programmes. Compared to conventional
NGOs coverage of moderate poor by Islamic NGOs is insignificant. In spite of that there are
instances like Hilful Fuzul Samaj Kallyan Sangstha which have set some encouraging examples.
They need to add or re-orient their programme so as to fit to the requirement of a truly Islamic
organisations which can organise mini Islamic societies in their own areas of operation. This is
important because Islamic society can not develop all on a sudden. Rather it requires concerted
and constant efforts by each and every Muslim to build him and his surrounding and convert into
Islamic communities as a result of which a solid ground for building Islamic society is built.
Islamic NGO activities in the suggested direction may contribute to build such a society.
 17

Table 1: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Number Program components

Credit Only 10 1. Micro Investment

1. Al-Amin Social Welfare 6. Sareka Pavilion for poverty
Organisation 7. Agro Industrial Centre alleviation
2. Palli Mukti Path 8. RESCU
3. Janokallyan Bohumukhi Shangtha 9. Kazipur Thana Shisu Kallyan
4. Al-Ahsan Sonchoy Samity 10. SWAB
5. Siam Sohojogita Society
Credit Plus 35 1. Micro investment
1. Muslim Aid Bangladesh 19. Povati Somaj Kallyan Samity for poverty
2. Bangldesh Chashi Kallyan Samity 20. Rural Development Trust alleviation
3. Bangladesh Institute of Habitat 21. Social Association for Future 2. Micro enterprise
Development Advance 3. Non formal
4. Bangladesh Masjid Mission 22. AMAN education and
5. Islamic Social Development 23. Parash Moni Samaj Kallyan vocational
Council Sangtha training
6. Jubo Academy 24. Al-Kuba Islamic Welfare 4. Emergency Relief
7. Confidence Trust and Rehabilitation
8. Darus Salam Society 25. Hilful Fuzul 5. Health and
9. Dhansiri Bohumukhy Samabay 26. Paras Moni Seba Shangtha Sanitation
Samity 27. Islami Kallyan Fund
10. Hilful Fujul Samaj Kallyan Samity 28. ISRAP
11. Islamic Relief World Wide 29. Social Development
Bangladesh Organisation
12. Islamic Aid Bangladesh 30. Ideal Social Welfare Council
13. Islami Samaj Kallyan Samity 31. Social Development
14. Noble Education & Literary Organisation
Society 32. Al-Falah Am Unnayan
15. Rabitat Alam al Alam Al Islami Sangtha
16. Khetmat-E-Khalk 33. VICEO
17. Model Bangladesh 34. D. P. SCEFM
18. Raquib Foundation 35. Al Amin
Relief and Rehabilitation 3 1. Income generating
1. Islami Bank Foundation programmes
2. Kuwait Joint Relief Committee 2. Educational
3. Monohardi Darul Islam Trust programmes
3. Relief and
rehabilitation
Education, Culture and Research 7 1. Non formal
1. Benevolence Trust 5. Islamic Economics Research eduction
2. Disa Bangladesh Bureau 2. Health &
3. Darul Yatim 6. Al Manar Audio Centre sanitation
4. Islamic Education Society 7. Islamic Centre 3. Orphanage
program
4. Poverty
alleviation
5. Nursery

Preaching 3 1. Dawah program

1. World Assembly of Muslim Youth 3. Bangladesh Institute of 2. Scholarship
2. Islam Procher Samity Islamic Thought 3. Translation &
publication
4. Education &
training
5. Relief &
rehabilitation
 www.cdss.ingeniousbd.org

Table 2: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Established in Working area No. of Groups No. of Outstanding Source of finance
Members Investment (Tk.)
Credit Only
1. Al-Amin Social Welfare Organisation Patuakhali 360 3,325 2,271,000 Own area of operation
2. Palli Mukti Path Jhalkati 147 735 217,700 Own area of operation
3. RESCU Rangpur, Kurigram 114 2,540 15,502,000 Own area of operation
Credit Plus Own area of operation
1. Muslim Aid Bangladesh All over Bangldesh 82 1,428 14,398,915 Local
2. Bangldesh Chashi Kallyan Samity All over Bangldesh 6,655 355,455 7,200,000 Local
4. Bangladesh Masjid Mission All over Bangldesh 106 1,175 8,500,000 Local
5. Confidence Dhaka, Sirajgang, Pabna, Bogra 50 1,500 60,000 Own area of operation

6. Darus Salam Society Jhalkati, Rangpur 100 1,050 183,250 Own area of operation
7. Dhansiri Bohumukhy Samabay Samity Dhaka 18 850 1,500,000 Own area of operation
8. Hilful Fujul Samaj Kallyan Sanstha Jhalkati, Barishal, Patuakhali 745 16,205 27,085,000 Own area of operation and
a small portion from
PKKSF
9. Islamic Aid Bangladesh All over Bangldesh 6 80 80,000 Own area of operation
10. Noble Education & Literary Society Bogra, Dhaka, Gazipur 47 830 2,594,000 Own area of operation
11. Model Bangladesh Dhaka, Sirajgang 50 500 250,000 Own area of operation
12. Raquib Foundation Dhak 130 2,600 640,000 Own area of operation
13. Rural Development Trust Mymensingh 78 1,750 10,037,000 Own area of operation
14. AMAN Lakshmipur 19 610 400,000 Own area of operation
15. Parash Moni Samaj Kallyan Sangtha Lalmonirhat 210 2,100 69,500 Own area of operation
16. Al-Falah Am Unnayan Sangtha Dinajpur, Rangpur 180 3,861 10,249,500 Own area of operation
17. VICEO Bogra 73 365 1,596,578 Own area of operation
18. D. P. SCEFM Bogra 151 904 590,250 Own area of operation
19. Ideal Social Welfare Council Kishoregang 35 285 565,000 Own area of operation
Education, Culture and Research
1. Disa Bangladesh Gazipur, Barishal 1,360 6,800 2,500,000 Own area of operation
2. Destitute Child and Human Centre Jessore, Satkhira 104 2,116 1,600,000 Own area of operation
Total: 24 10,820 407,064 108,089,693
 www.cdss.ingeniousbd.org

Table 3: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Number Program components

Credit Only 10 1. Micro Investment

1. Al-Amin Social Welfare 6. Sareka Pavilion for poverty
Organisation 7. Agro Industrial Centre alleviation
2. Palli Mukti Path 8. RESCU
3. Janokallyan Bohumukhi Shangtha 9. Kazipur Thana Shisu Kallyan
4. Al-Ahsan Sonchoy Samity 10. SWAB
5. Siam Sohojogita Society
Credit Plus 35 1. Micro investment
11. Muslim Aid Bangladesh 29. Povati Somaj Kallyan Samity for poverty
12. Bangldesh Chashi Kallyan Samity 30. Rural Development Trust alleviation
13. Bangladesh Institute of Habitat 31. Social Association for Future 2. Micro enterprise
Development Advance 3. Non formal
14. Bangladesh Masjid Mission 32. AMAN education and
15. Islamic Social Development 33. Parash Moni Samaj Kallyan vocational
Council Sangtha training
16. Jubo Academy 34. Al-Kuba Islamic Welfare 4. Emergency Relief
17. Confidence Trust and Rehabilitation
18. Darus Salam Society 35. Hilful Fuzul 5. Health and
19. Dhansiri Bohumukhy Samabay 36. Paras Moni Seba Shangtha Sanitation
Samity 37. Islami Kallyan Fund
20. Hilful Fujul Samaj Kallyan Samity 38. ISRAP
21. Islamic Relief World Wide 39. Social Development
Bangladesh Organisation
22. Islamic Aid Bangladesh 40. Ideal Social Welfare Council
23. Islami Samaj Kallyan Samity 41. Social Development
24. Noble Education & Literary Organisation
Society 42. Al-Falah Am Unnayan
25. Rabitat Alam al Alam Al Islami Sangtha
26. Khetmat-E-Khalk 43. VICEO
27. Model Bangladesh 44. D. P. SCEFM
28. Raquib Foundation 45. Al Amin
Relief and Rehabilitation 3 1. Income generating
46. Islami Bank Foundation programmes
47. Kuwait Joint Relief Committee 2. Educational
48. Monohardi Darul Islam Trust programmes
3. Relief and
rehabilitation
Education, Culture and Research 7 1. Non formal
49. Benevolence Trust 53. Islamic Economics Research eduction
50. Disa Bangladesh Bureau 2. Health &
51. Darul Yatim 54. Al Manar Audio Centre sanitation
52. Islamic Education Society 55. Islamic Centre 3. Orphanage
program
4. Poverty
alleviation
5. Nursery

Preaching 3 1. Dawah program

56. World Assembly of Muslim Youth 58. Bangladesh Institute of 2. Scholarship
57. Islam Procher Samity Islamic Thought 3. Translation &
publication
4. Education &
training
5. Relief &
rehabilitation
Total 58
 www.cdss.ingeniousbd.org

Table 4: Categorisation of Islamic NGOs in Terms of Program Type

Organisation categories by program type Established Working area No. of Groups No. of Members Outstanding Source of finance
in Investment (Tk.)
Credit Only
1. Al-Amin Social Welfare Organisation Patuakhali 360 3,325 2,271,000 Own area of operation
2. Palli Mukti Path Jhalkati 147 735 217,700 Own area of operation
3. RESCU Rangpur, Kurigram 114 2,540 15,502,000 Own area of operation
Credit Plus Own area of operation
1. Muslim Aid Bangladesh All over Bangldesh 82 1,428 14,398,915 Local
2. Bangldesh Chashi Kallyan Samity All over Bangldesh 6,655 355,455 7,200,000 Local
4. Bangladesh Masjid Mission All over Bangldesh 106 1,175 8,500,000 Local
5. Confidence Dhaka, Sirajgang, Pabna, Bogra 50 1,500 60,000 Own area of operation

6. Darus Salam Society Jhalkati, Rangpur 100 1,050 183,250 Own area of operation
7. Dhansiri Bohumukhy Samabay Samity Dhaka 18 850 1,500,000 Own area of operation
8. Hilful Fujul Samaj Kallyan Sanstha Jhalkati, Barishal, Patuakhali 745 16,205 27,085,000 Own area of operation and a
small portion from PKKSF
9. Islamic Aid Bangladesh All over Bangldesh 6 80 80,000 Own area of operation
10. Noble Education & Literary Society Bogra, Dhaka, Gazipur 47 830 2,594,000 Own area of operation
11. Model Bangladesh Dhaka, Sirajgang 50 500 250,000 Own area of operation
12. Raquib Foundation Dhak 130 2,600 640,000 Own area of operation
13. Rural Development Trust Mymensingh 78 1,750 10,037,000 Own area of operation
14. AMAN Lakshmipur 19 610 400,000 Own area of operation
15. Parash Moni Samaj Kallyan Sangtha Lalmonirhat 210 2,100 69,500 Own area of operation
16. Al-Falah Am Unnayan Sangtha Dinajpur, Rangpur 180 3,861 10,249,500 Own area of operation
17. VICEO Bogra 73 365 1,596,578 Own area of operation
18. D. P. SCEFM Bogra 151 904 590,250 Own area of operation
19. Ideal Social Welfare Council Kishoregang 35 285 565,000 Own area of operation
Education, Culture and Research
1. Disa Bangladesh Gazipur, Barishal 1,360 6,800 2,500,000 Own area of operation
2. Destitute Child and Human Centre Jessore, Satkhira 104 2,116 1,600,000 Own area of operation
Total: 24 10,820 407,064 108,089,693
 www.cdss.ingeniousbd.org

Table 3: Investment Avenues, Higher Limits and Duration

Investment Avenues Higher Limit Duration Remarks

Crop production Tk. 10,000/- Highest 1 (one) Crops of 21 varieties
year
Fish cultivation in ponds Tk. 25,000/- Highest 3
(three) years
Irrigation Tk. 5,000/- Highest 1 (one) According to need
year
Agriculture and Tk. 25,000/- Highest 3 10% borrowers equity
irrigation implements (three) years
All non-agricultural Tk. 10,000/- Highest 1 (one) For 343 non-agricultural
sectors year items payable in weekly
instalment
Rickshaw, van and rural Tk. 5,000/- Highest 2 Payable in weekly
transports (Two) years instalment
Hand Tube well Tk. 3,000/- Highest
3(Three) years
House-building Tk. 15,000/- Highest
materials 3(Three) years
 26

Table 4: Categories and the number of activities financed under RDS

Categories of non- Types of activities
agricultural activities
1. Manufacturing Bamboo works, cane works, pottery, muri making, snacks making,
and tailoring, sugarcane crushing, mending works, tin production, rickshaw
processing:
making and mending, sweeping materials, sweet meat, furniture
126 activities
making, medicine production, umbrella mending, cake preparation,
plastic works, net making, thread purchase, drum purchase, house
mending, wool works, wheel mending, box mending, nut processing,
kantha making, rickshaw-hood making, iron materials making, cap
making, thread works, pickle preparation, printing works, tin purchase,
radio mending, misri making, sawing, laundry works, procurement of
machinery, candle making, sanitary works, welding, embroidery, dry
sweats making, metallic net making, sweet cake preparation, cow-dung
fuel balls, toy making, packet making, nimki making, cosmetic
production, spectacle making, flour making, comb making, mosquito
net making ghee making, rope making, lamp (kupi) making, chanachur
making, jute goods fabrication, shoe making, mosquito coil making,
hand fan making, quilt making, mustard oil making, jewellery works,
chun making, mat making, chira making, saree making, etc.

2. Service Rickshaw, barber shop, hiring of irri pump, sale of news papers, curt,
activities: bullock curt, mike hiring, feri boat, livestock treatment, horse curt,
buffalo curt, dentist, boating, decorator service, baby taxi, construction
33 activities works, sewing machine, rice machine, bi-cycle purchase, spray machine
purchase, carpentry, wheat mill, van procurement, electric iron
purchase, fan making/mending etc.
3. Trading
82 activities
4. Shops
74 activities
5. Hacking: Bamboo basket, old cloths, peanuts grocery
5 activities
6. Nursery: Vegetables, water melon cultivation, ginger cultivation, brijal
10 activities cultivation, turmeric cultivation, bamboo production, papaya
production, chilli production and onion production
7. Livestock raising Milking cow, bullocks, cow fattening, poultry raising, sheep raising,
duck raising, buffalo rearing, bees raising, pigeon raising etc
13 activities