Gender and Development

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Bangladesh

Enhancing Institutional Capacity of Female-Headed Micro Finance NGOs - Credit and Development Forum

Background of the project

NGOs in Bangladesh such as the Grameen Bank and BRAC have gained international recognition for their innovative approaches to microfinance for employment and income generation, especially for women. What is perhaps less well known is the large number of smaller female-headed NGOs providing microfinance to women throughout Bangladesh. These organizations provide an invaluable service by targeting women not served by the larger microfinance organizations. They also account for a higher proportion of women in microfinance organizations in leadership positions. While about 85 percent of members of microfinance programs are women, women occupy only about 10 percent of leadership positions. This highly skewed leadership pattern is most acute in the larger microfinance programs, in contrast to the smaller female-headed microfinance NGOs.

The small-scale and locally-based nature of these female-headed NGOs brings both opportunities and constraints. While enabling them to access very poor women in more isolated districts, their size and experience poses problems for their development as an organization. In particular, small women’s NGOs lack skills in the areas of staff and financial management. With only a small number of staff - all heavily involved in the operations and service-delivery side - it is very difficult for such NGOs to develop their skills and institutional capacity or access training.

The Credit and Development Forum (CDF), an umbrella NGO representing microfinance NGOs in Bangladesh, is well aware of such constraints. Representing more than 900 microfinance organizations - including 81 female-headed NGOs - CDF is committed to meeting the training and organizational development needs of its partner NGOs. Recognizing that most of its female-headed partner NGOs faced particular hurdles in terms of capacity building and training, CDF approached ADB for financial support to develop and deliver specific training modules to strengthen the institutional capacity of these female-headed NGOs. A long term goal of the project is to build the institutional capacity of these female-headed NGOs in order that they can qualify for Palli Karma Sahayak Foundation (PKSF) funding. Access to such funds would greatly expand the range of projects and financial resources available to these female-headed microfinance NGOs.

Project Components

The primary objective of the project is to strengthen the institutional capacity of female-headed microfinance NGOs so that they can expand their outreach, track their program performance, maintain accounts and related records, tap necessary resources, and provide dynamic leadership in order to provide quality financial services to women clients. The project seeks to provide one year extended support for capacity building in management, financial information systems and supervision and monitoring. Two staff from each NGO will be trained.

The project is broken down into two stages, that is, the selection of project partners and the capacity development phase.

Out of the total 81 female-headed NGOs, 20 agreed to take part in the project. Participating organization have agreed to cover their own transportation costs, but will receive training materials and live-in accommodation during the training programs at no cost. To qualify, these female-headed NGOs had to meet the following criteria:

• A minimum of 500 active members
• A minimum of TK 1 million loans transacted
• Interested, but as yet unable, to qualify for PKSF funding.

The capacity development phase includes the following components:

• Five-day training course on supervision and monitoring savings and credit management.
• Five-day training course on microfinance related accounts management.
• Five-day training course on management information systems.

CDF is also considering organizing follow up training and reviews at the end of the project at its own expense.

Several participants noted that even the selection process was an exercise in training. They found great difficulty in providing the range of information required by CDF as part of a base-line survey of the selected project participants. This reinforced to them the need for more systematic record keeping and financial information systems.

Outcomes of Project

The project is still in its first year of operation. Ultimately, the project hopes to deliver the following outcomes:

• Baseline surveys on the profiles of 30-35 small and medium-sized female-headed NGOs.
• Strengthen leadership ability of CEOs in the participating NGOs.
• Improve efficiency levels in the participating female-headed NGOs.
• Provide a model for capacity-building of female-headed NGOs which may be replicated in other projects.

The project is still in an early stage of implementation. To date, project beneficiaries have attended several meetings and workshops, and one training course has been organized on microfinance-related accounts management. Nevertheless, comments from a number of project participants reveal their enthusiasm for and appreciation of the project so far:

"I belong to a small organization committed to improving the status of women. While we have established a small fund for microcredit, we feel that we lack organizational skills in areas such as management and financial systems. We need to be better organized and make our financial information and record-keeping more systematic. We tend to take advantage of the training when it is available as we have limited resources."

"Apart from technical skills, women-headed organizations have specific issues. So one of the attractions of this project is that it provides a forum for women to share experiences, problems and solutions."

"Our organization works in more isolated areas, and being part of this project has been very informative. We didn’t know that women were working at various levels. The workshops have exposed us to new ideas on how to develop our organization. Preparing accounting information for CDF has already helped us. In the last meeting, CDF said that it will help us access [qualify for] PKSF funds."

"We need resources in terms of technical skills to reach the poorest-of-the-poor. No other forum has done this, treat women-headed micro-credit organizations as a separate group of stakeholders."

One female CEO gave her own story as an example of what can be achieved. She said that seven years ago she lived in full purdah but that as a result of her work in microfinance she has gained the confidence to actively participate in society and to deal with men. She has also developed strategies to maintain good relations with local hooligans, such as inviting them to share a cup of tea with her and explaining to them the nature of her organization. The importance of maintaining good relations with the community was a point made by all the women, who were particularly aware of the risks facing female credit staff who disburse and collect money. Many of the women present expressed concern over the presence of gangs and hooligans in rural areas. While male credit staff share the dangers here, sexual violence was an additional risk faced primarily by female credit staff.

Although not considered in the original project proposal, CDF is developing additional training for these women in the area of gender and development. Because this training was not included in CDF’s original project proposal, CDF will fund this component themselves or seek donor support. The decision to provide additional training in the areas of gender and development is in response to the needs of the project beneficiaries, who despite having acquired a wealth of practical and experiential knowledge on women’s role and status in their communities, have an uneven understanding of concepts such as gender, empowerment, and gender and development. During this meeting, several participants expressed interest in learning more about other female-headed NGOs working in the area of gender and development and relevant government initiatives and policies. To assist CDF, they are looking to recruit a training manager with experience in the field of microfinance and gender and development. CDF is also considering holding an annual convention for female-headed microfinance NGOs, both partners and non-partners to build up participants’ experience and exposure to this important area.

Increasing the gender capacity of CDF via the development of new gender training modules and the recruitment of a gender specialist has also had positive benefits for CDF as an institution. As a result, CDF is also considering revising its training materials and statistical analyses in order to raise awareness of gender and empowerment as critical issue in microfinance and support gender disaggregated data collection. These changes will in turn help to develop the gender capacity of CDF’s partner NGOs - both female-headed and male-headed.

Future Direction

Poverty reduction is the overarching priority of ADB’s Country Strategy and Program (CSP) for Bangladesh, with 47 percent of the 17 projects in the 2002-2004 lending program poverty intervention projects. Gender is also a thematic priority in the CSP, in line with ADB’s own policy on gender and development. There is scope, therefore, to build on this technical assistance particularly in the areas of poverty reduction and gender equity. For example, many ADB-funded poverty reduction and rural and urban infrastructure projects in Bangladesh include a microfinance component directed at women. ADB therefore should consider inclusion of capacity building activities of female-headed microfinance NGOs in its future support for microfinance projects.

Capacity building of female-headed microfinance NGOs also contributes to women’s empowerment and gender mainstreaming. This is in line with ADB’s own objectives as well as government directives such as the National Policy for the Advancement of Women. The ability to increase the number of female-headed NGOs which qualify for PKSF funding will also help redress the highly skewed gender imbalance at leadership levels within microfinance NGOs.

In addition to extending similar training to female-headed microfinance NGOs not included in the current project, additional technical assistance could be provided in order build the institutional capacity of female-headed NGOs in other sectors, such as those working in the areas of adult education and female literacy, and women’s health and family planning.

ADB can also play a dialogue role here, particularly in regards to developing special funding mechanisms within the PKSF for female-headed microfinance NGOs. Support for such an initiative could be sought from the National Poverty Reduction Council as well as the Ministry of Women and Children Affairs. The National Poverty Reduction Council is a policy making body recently formed but not yet active. It may support the development of a gender sensitive credit policy for poverty reduction led by Bangladesh Bank and the Ministry of Women and Children Affairs. As ADB is considering technical assistance to the National Poverty Reduction Council, specifically to develop the capacity of its Poverty Monitoring Cell, ADB could also consider technical assistance to strengthen the gender analysis and gender-sensitive monitoring capacity of the National Poverty Reduction Council and Poverty Monitoring Cell. The Poverty Monitoring Cell could then investigate the feasibility and evaluate the role of special funding mechanisms for female-headed NGOs as a poverty reduction strategy.

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