ACTIVITIES of non-governmental organisations began around 50 years ago in Bangladesh. In the beginning, their work was about providing relief for the war affected people. These NGOs have passed a long history. The economic development projects are now available in hard-to-reach areas. The NGOs mobilised people into groups for making them aware about health, reproductive health, and education and provided them with small loans to start their income generating activities. The contribution of NGOs to improve social indicators, health indicators and economic condition of Bangladesh is praiseworthy.
NGOs now implement many social development works. Some of them have run microfinance programme and they are known as non-governmental organisation-microfinance institute. They are regulated through the Microcredit Regulatory Authority. As of December 2020, there are 746 licensed NGO-MFIs in Bangladesh. Considering the volume of money and beneficiaries, 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 farmers, 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, 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 per cent of the labour force of Bangladesh. Such programmes are often called as ‘life Blood’ of our rural economy.
A rapid survey conducted over telephone shows that the 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 and pulse. They provided it for their most vulnerable beneficiaries during the general holiday in 2020. They also provided them with soap, hand sanitizer, masks to protect their borrowers from Covid-19. Moreover, they are making them aware about the health safety rules for the Covid-19 and given them information about how to save themselves, their family members and the community by maintaining social distance and practising hygienic behaviour. They have stopped collection of loan instalments following the instruction of the regulators. As a result the service charge income has reduced and the small NGO-MFIs are facing challenges to maintain their operating cost.
The small NGO-MFIs surveyed have also provided masks, hand gloves and hand sanitiser to protect their staff from Covid-19 as they are the frontline workers. The staff works tirelessly from dawn to dusk among the poor women and men in rural and urban areas. Generally, they need to be in crowded areas to perform their duties, therefore, they are at risk of contracting virus.
Medium and large NGO-MFIs are also playing a significant role during this pandemic. They are protecting their members by supporting them financially and by sharing reliable, life-saving information. They are protecting their front line workers by providing them with protective equipment such as masks and gloves. They have taken a number of preventive steps across the organisation, prioritising the health and well-being of their staff and beneficiaries.
The NGO-MFIs stopped loan classifications as per the directions issued by the regulators. 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 instalments at a better economic time and no restrictions are in place on disbursing new loans. They have also stopped savings collection from the members. However, the members can withdraw their savings to meet their household necessity during the pandemic.
However, the concerned authority of small NGO-MFIs has also mentioned that their net surplus income from microfinance programmes have decreased significantly. As a result they are struggling to maintain their day to day activities including providing staff salary.
Although the Bangladesh Bank has allocated a stimulus package for the NGO-MFIs, but many small NGO-MFIs could not avail this package. During the on-going lockdown they are again faced with a challenge to sustain. Therefore, they need urgent support to remain active in the pandemic situation. Despite all the challenges, 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 the life threatening risk of the Covid-19. Thousands of workers in this sector are working risking their own life. A considerable number of them have already affected by corona virus and few of them died. In this situation, the government, as well as other stakeholder must stand beside the NGO-MFIs to save the life and livelihood of millions of the poor people during this pandemic period.
Dr Matiur Rahman is a research consultant at the Human Development Research Centre. Shishir Reza is an associate member of the Bangladesh Economic Association.
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