POVERTY: BRAC reported as The Largest Global Anti-Poverty Organization

Alice Korngold May 15, 2011
Founded by former Shell Oil executive Fazle Hasan Abed in 1972, BRAC reaches 138 million of the poorest people in nine countries in Asia and Africa, and recently launched in Haiti. Its mission is to empower people and communities in situations of poverty, illiteracy, disease and social injustice. Its annual operating budget is half a billion dollars.
BRAC is one of the extraordinary organizations that is funded by the Omidyar Network (ON) and is participating in this week's Omidyar Network Executive Forum (ONEF). See my accompanying post on "Omidyar Network Executive Forum Convening World's Leading Social Entrepreneurs."For an organization of such magnitude and impact, BRAC's brand is not commonly known.

  Community health worker in Sudan: copyright BRAC/Shehzad Nooran


BRAC provides microloans, self-employment opportunities, health services, education, and legal and human rights services
BRAC's vision is a world free from all forms of exploitation and discrimination where everyone has the opportunity to realize their potential. Its interventions aim to alleviate poverty on a large scale through economic and social programs. BRAC has created 8.5 million self-employment opportunities and made $5 billion in micro-loans to over 6 million borrowers. BRAC's schools graduated 3.8 million students from primary schools and 2.3 million from pre-primary schools, with nearly 1.8 million children currently enrolled in its 66,000 schools. You can read more here.
Originally known as the Bangladesh Rural Advancement Committee--now simply called BRAC--the organization was founded by Abed when he was overwhelmed by the sight of death and extreme poverty among refugees returning to Bangladesh after the 1971 Liberation War of Bangladesh. Abed left his corporate life, sold his London home to fund his project, and set up relief efforts in a remote area in northeastern Bangladesh. Next he raised funds from Oxfam to further advance the organization. Abed's work ultimately led him and BRAC to deal with the long-term task of improving living conditions of the rural poor. He directed his policy towards helping the poor develop their capacity to manage and control their own destiny.
In "Freedom from Want," author Ian Smillie notes that "[Abed] did not know that, in the years ahead, he would confront and surmount some of the greatest development challenges on the planet and everything he knew about economics, health, and education would be turned on its head."
Smillie describes the unique BRAC culture that was established from the outset: "Brutally honest about what had been achieved and what [BRAC] had learned ... The idea was not to prove they had all the answers before they started, but to find out what worked and apply the lessons." From the beginning, BRAC let incompetent staff go and set up a training center for those who remained. As BRAC facilitated the development of small enterprises by the people they serve, BRAC sought and found ways to lower the costs of production in order to reduce the expenses of borrowing.
You'd think I'm writing about an ambitious, highly competitive company. And yet, I'm writing about what is referred to in The Economist "by most measures the largest, fastest-growing non-governmental organisation (NGO) in the world--and one of the most businesslike."

 2. Bangladesh meeting: copyright Annie Escobar and Patricia Schneidewind


BRAC's approaches to poverty alleviation are entirely unique: "small is beautiful but big is necessary".
My private interviews with Sal Giambanco, Partner, Omidyar Network (a primary BRAC funder) and Susan Davis, President & CEO, BRAC USA, reveal some of the key factors that make BRAC so uniquely effective in its holistic approach to poverty alleviation. BRAC has achieved so much because it:
Constantly tested, measured, and modified its solutions in order to maximize its effectiveness in solving poverty--from the very beginning. Never seeking to make its reports look better for funders, never assuming that it had the answers, always trying to find better solutions.
Engaged in the community to develop solutions together, not as an outside force thinking it had the answers and would drop resources onto the community and then leave.
Recognized the limits that government and religious and social norms placed on women, especially with regard to working, even though women were counted on to help support their families. Within those constraints, BRAC identified industries where women would be permitted to work (e.g., dairy), helped them set up microenterprises (through training and microlending), and also helped to find a way for the dairy products to reach the market.
Gradually developed a holistic approach in Bangladesh for three decades before replicating the model--first in Afghanistan 10 years ago. As BRAC developed through an iterative process, BRAC developed many interventions, coupling traditional microfinance loans with other programs like health care, education, human rights and legal services, and social enterprise. Its microfinance program targets the poorest of the poor, and adapts for the varied local contexts in which BRAC works.
Specifically designed programs--based on the concept of "massification"-- that could be expanded exponentially to serve the large populations of poverty-stricken people in Bangladesh. This positioned BRAC to be particularly effective in other regions with dense populations of people living in extreme poverty. As Abed said, "Small is beautiful, but big is necessary."

BRAC employs 125,000 people--primarily women--in Asia and Africa. "We have a disciplined work culture, training and hiring first time job holders--mostly women, primarily high school and college graduates fresh out of school," explained Davis. "As the largest international NGO, as a job-creator and employer of scale and diversity, we teach people the basics of customer service and how to be productive employees." Not only do the jobs benefit people in the communities served by BRAC, but the revenues from BRAC industries (e.g., BRAC Dairy and Aarong retail chain) provide a good portion of BRAC's earned income.
Southern leadership and South-to-South collaboration mean lower costs and higher impact BRAC's experienced Bangladesh managers train new employees in Uganda, Tanzania, etc. The point is that new BRAC recruits learn that success is possible--from people from conditions they can relate to, rather than from Americans. An additional benefit is that the trainers get passports, travel, and return to their home country with new skill sets and perspectives.
BRAC's strategy to scale up in new countries not only involves rigorous training, but also a promotion ladder to instill ambition and reward achievement among employees. Trainees who achieve as credit officers (community organizers) have the opportunity to be promoted to branch managers, then to area managers, and then to region managers. The pyramid scales to reach many employees and members of the community. The same training and promotion model is applied to schools, health, and other areas of BRAC service.


 3. Training session in Tanzania: copyright BRAC/Shehzad Noorani


BRAC is creating new markets for products
BRAC has also trained 100,000 health and other promoters using an innovative micro-franchise-like approach to reaching "the last mile" (deep into remote communities) and generating self-employment. We might think of the promoters as "door-to-door sales people," but in this case they are helping people with legal services (property rights), poultry and livestock services, energy services, etc. Promoters assist people in remote rural communities in learning about agriculture, family planning, how to protect themselves from deadly diseases and illnesses, and so on, while making a living for themselves. Note to companies: BRAC has enormous purchasing power.
"We know how to move people out of conditions that are sub-human"
Davis is emphatic. After giving vivid descriptions of the poorest of poor families whom she meets in her work, she is adamant that "we can eliminate absolute poverty. We're rich enough. We know enough. BRAC serves the 'ultra-poor,' the most hungry, the most marginalized." As we talked in her office last Friday, Davis became more contemplative as she commented that, "the relative poverty is more complicated. What's good enough?"
"The heart of social entrepreneurship is a willingness to try out ideas that are helpful to others. Social entrepreneurs are action researchers: they learn primarily through experimentation," say Davis and her co-author David Bornstein in "Social Entrepreneurship: What Everyone Needs to Know." Davis and Bornstein are describing the many social entrepreneurs they discuss in their excellent book, but their comments fit Abed and BRAC quite perfectly. Davis and Bornstein also point out that "scaling an idea requires every bit as much entrepreneurship as piloting one." As it enters its fourth decade, BRAC is succeeding in scaling its approaches.

BRAC has been a secret
No, not on purpose. BRAC has remained relatively unknown in the West (despite numerous awards given to Abed and BRAC) because it developed on the local level in the poorest, most remote communities of Bangladesh. Its programs were developed step-by-step as its organizers--people in the community--listened, learned, and enhanced and expanded services in order to create a holistic approach to help families to emerge from poverty and build better lives for themselves. BRAC's growth is based on Southern leadership and South to South (as opposed to North to South) collaboration. And BRAC's approach is complicated; a tagline doesn't capture it.

Building awareness in the U.S. and UK to support a proven approach to alleviate poverty and empower tens of millions to build their lives
BRAC USA and BRAC UK were launched in 2007 to raise public awareness about the BRAC approach to sustainable human development and mobilize resources to enable BRAC to rapidly scale up its programs. Awareness-building and fundraising have become particularly urgent since Bangladesh does not allow foreign exchange to go out of the country; consequently, BRAC cannot use any of the revenues derived from its Bangladesh programs to launch new initiatives in other countries. As a result, BRAC's fundraising initiatives will help the organization to seed new services to other parts of the world.
BRAC offers a proven approach that can be effectively scaled to alleviate poverty and empower tens of millions of people to build their lives--to establish businesses to support their families, educate themselves and their children, practice healthy lifestyles, and help the next generation to live better. This is an approach that governments, foundations, philanthropists, and individuals should get behind. And if it takes a bit to learn and explain the BRAC approach, I think we're up to it. The secret needs to get out.

http://www.fastcompany.com/1753519/brac-is-the-largest-global-anti-poverty-organization-and-its-a-secret

POVERTY: Fast-growing Asian economies may be flush with money but filthy toilets remain a blight across the region

MARTIN ABBUGAO SINGAPORE - May 04 2011

Fast-growing Asian economies may be flush with money but filthy toilets remain a blight across the region despite rising standards of living, with dire effects on poverty reduction and public health.

Social activists say dismal sanitation facilities are causing preventable diseases in poor communities where people would readily spend money on a mobile phone -- but not on a latrine.

"I think it's very prevalent," said Jack Sim, a Singaporean businessman who founded the sanitation advocacy group World Toilet Organisation. "The handphone is the competitor of the toilet."
Asia has led the rebound from the 2008 to 2009 global recession and major institutions like the World Bank and International Monetary Fund are predicting strong economic growth in the years ahead.
US business magazine Forbes says Asia now has the second largest population of billionaires worldwide at 332, behind the United States' 413 while leapfrogging Europe's 300.
But in Asia's teeming urban slums and impoverished villages, toilet facilities are either non-existent or rudimentary.
"The lack of good toilets as well as sanitation is still a problem in Asia," said Babar Kibir of Bangladesh-based Brac, one of the world's biggest non-government organisations.

Charity alone won't help
Sanitation has an "immense effect" on poverty reduction, Kibir said. "It has linkages with poverty, child mortality, combating disease and environmental sustainability," the director of Brac's Water, Sanitation and Hygiene Programme, or Wash, told Agence France-Presse.
People living in poor sanitary conditions are vulnerable to illness which often prevents them from finding regular employment, Kibir said, adding that much of the meagre income they earn would be spent on medical treatment.
Diarrhoea, malnutrition, arrested physical growth, loss of eyesight, typhoid, dysentery and hepatitis are diseases commonly associated with poor sanitation.
"Poor people, particularly women and children, can enjoy protection from diseases, malnutrition and death by using safe water and sanitation facilities including improved hygiene practices," said Kibir.
Singapore's Sim said charity alone cannot help solve the problem of an estimated 2,5-billion people worldwide without access to proper sanitation.
Businesses, governments, banks, micro-finance institutions and NGOs must band together to create a business model that can offer affordable and sustainable toilet systems to the poor, he said.

'Aspirational goal'
Sim, organiser of an annual conference called the World Toilet Summit, estimated the global market for sanitation hardware at one trillion dollars.
"I hope that the commercial sector comes in ... We need to go to scale, we need to see this as a wonderful business opportunity."
In Bangladesh, one of Asia's poorest countries, Brac's Wash programme provides micro-loans to the poor to build toilet facilities, charging only a minimum service charge. Grants are given only to the very poor.
But the programme goes beyond just providing latrines -- it comes as an entire package, which includes designing and building eco-friendly toilets and raising awareness in the community about the need for good sanitation.
Men, women and adolescents are taught good hygiene practices, while local community and religious leaders and micro-credit groups are roped in to help instil the message, Kibir said.
Sim said some aid agencies focus on building toilets but neglect the education part.
"They want to count how many toilets they have given, but they are not counting how many toilets are being used," Sim said.
People should be taught that a good toilet is an "aspirational goal" that can boost self-esteem and social standing, apart from improving health -- and toilet bowls could even be given as wedding gifts, he said.
Citing Japan's impeccably clean toilets, Sim said: "The peer pressure is there -- that when you don't have a clean toilet, you are shaming your company, your building, your country, your community.
"The toilet tells a lot about the culture of the people. They can be carrying Louis Vuitton handbags but if their toilets are so dirty that shows they are still an immature society, they're still not sophisticated, not elegant," Sim said.
 http://mg.co.za/article/2011-05-04-filthy-toilets-a-blight-on-asian-prosperity/

POVERTY: BANGLADESH: Microfinance institutions pushed loans, admits major NGO

DHAKA, 20 April 2011 (IRIN) - Lack of regulation and a surplus of donor funds in Bangladesh’s microcredit industry have led to NGOs pushing loans to over-indebted borrowers, says BRAC, the world’s largest development organization and heavily involved in the country’s microfinance industry.


 Photo: Sam Sherrat/Flickr
Millions of Bangladeshi women received loans
Asked whether BRAC itself had pushed loans onto borrowers who could not afford them, Shameran Abed, programme head of microfinance at BRAC, told IRIN: “Yes,” citing “excess liquidity” and a lack of communication between lenders.
“In the mid 2000s, the microfinancing industry grew too fast. And yes, we did,” said Abed. “But I’ll tell you why we did - we didn’t have perfect information.”
In 2009, BRAC disbursed US$1.1 billion worth of loans to women throughout Bangladesh, and like many other microfinance institutions (MFIs), claimed that 99 percent of their borrowers paid back their loans, a win-win situation.
However, the industry has also come into disrepute. A Norwegian documentary, Caught in Micro Debt, sparked international outrage in 2010 by showing the difficulties people have under the burden of paying back a loan.
Some borrowers are even taking out more loans to meet repayments, experts say
Microcredit, the practice of loaning sums as small as US$20, was first pioneered in Bangladesh in the 70s and 80s by Nobel laureate and politically controversial figure Mohammad Yunus and the organization he founded, Grameen Bank.
Since then, the industry has mushroomed to over 500 registered MFIs in Bangladesh and has come under increasing scrutiny.
Women, who are the borrowers in most cases, are subject to high interest rates and aggressive debt recovery techniques, said Lamia Karim, associate professor of anthropology at the University of Oregon. She has been researching microfinance for more than 15 years.
But BRAC’s Abed said the popular belief that high interest rates are to blame for loan defaulting is wrong. The interest on a $140 loan, he explained, is 15 percent, with weekly installments of $3.40, of which about $0.40 is interest.
"Is that 30 taka [US $0.40] tipping you over the edge? I don't think so," he said.

Inadequate regulatory body
Despite having more than 20 million micro-borrowers, the Bangladesh government still has no effective system in place to protect microcredit lenders and clients, experts agree.

 Photo: Muhammadyunus.org
Professor Muhammad Yunus

The Microcredit Regulatory Authority (MRA) formed in 2006 after repetitive calls from the microcredit industry to establish control over smaller MFIs, is hamstrung by a lack of manpower and funds, according Prodip Chandra Roy, MRA assistant director of research.
Furthermore, Roy said the MRA’s authority is severely undermined by other organizations that offer registration.
“For us the biggest challenge is to control other authorities that also have the authority to register microfinance organizations,” he said.
To register with the MRA, an MFI has to show either that it has 1,000 members (potential borrowers), or $50,000-worth of dispersible funds. To date, the MRA has registered some 548 MFIs out of thousands operating in Bangladesh.

Strong-arm tactics
Many microcredit borrowers have little or no property to be used as collateral, which makes trust a key element of the loaning process.
“For our microfinance borrowers we do not have any collateral, so we cannot take anything back. The court system doesn’t work here. So, the only way you can get your money back is to keep pestering them,” Abed said.
However, BRAC, Grameen and other NGOs have been found to do much more than pester borrowers who missed payments, some claims suggest.
As an attack on a family’s honour, women are regularly shamed in public, an activity that can have grave social repercussions, Karim said.
Stronger measures are used if the borrowers default even after public humiliation.
“Grameen, BRAC, ASA and Proshika all strong-armed women into paying back. In extreme cases homesteads are taken apart and the timber and tin sold off,” said Karim.
Though the NGOs don’t actively take part in `ghar bhanga’ (house-breaking), community members do what NGO officers order them to do, out of fear of losing access to loans, she said.
However, despite numerous papers by independent researchers, the NGO community refuses to accept such allegations.
“I’ve not had one issue of complaints [of house-breaking] coming from borrowers, or the media or the society that we work in,” said Abed.
http://www.irinnews.org/report.aspx?reportID=92528

MALNUTRITION: Bangladesh: A Holistic Approach to Fighting Child Malnutrition in Bangladesh: the Story of Renata

Karie Atkinson, Writer/Editor, GAIN katkinson@gainhealth.org
7 March 2011
“Business is my true north, my compass, my calling,” says Kaiser Kabir, CEO of the Bangladeshi pharmaceutical company Renata. More than 3,500 employees, US$ 74 million in annual turnover and a US$ 350 million valuation on the Dhaka stock exchange - on paper Renata looks like a typical aggressive private company. These figures, however, do not tell the whole story as the company is also rooted in making a difference in the everyday lives of Bangladeshis.
More specifically, Renata is on a mission to increase access to affordable nutrition so children get the right start in life to live to their full potential. While Bangladesh has made significant progress in reducing deaths of children under five years old, its child malnutrition rates are still among the highest in the world. One of the main problems is that millions of Bangladeshi children suffer from insufficient essential nutrients in their every day diets. Poverty also remains a reality. Half of Bangladesh’s 160 million people live on less than US$ 1 per day. And rising food prices of basic staple foods are making getting a balanced diet even harder.
Renata is helping to address these challenges through a comprehensive approach that aims to secure a better future for more than 50 percent of children under two years old. Production, marketing and distribution of a locally adapted vitamin and mineral powder product called Pushtikona is one part. The company produces the single serving sachets containing 15 essential nutrients in powder form for the equivalent of US$ 0.02 (2.50 taka) per sachet. It then distributes them through its 1,100 medical representatives across the country who are in contact with 50,000 doctors every day. Mothers simply sprinkle the vitamin and mineral powders, which complement breast milk, onto the local solid foods they feed to their infants. The aim is to build enough product volume and consumer demand so Pushtikona can be sustained entirely through the expanded commercial market.
“Our approach to addressing child malnutrition is holistic, starting with educating mothers about the importance of exclusive breastfeeding until an infant is six months old, appropriate complementary feeding in combination with breastfeeding from six months to at least two years of age and then the benefits of our solution,” emphasizes Mr. Kabir. Renata recently used money it saved in royalty fees waved by Dr. Stanley Zlotkin, the Canadian inventor of Sprinkles, a brand of multi-nutrient powder, to produce a commercial focused on the importance of exclusive breastfeeding during the first six months of a child’s life.
Renata, which is Latin for “renaissance” or “rebirth”, reinvented itself out of Pfizer Bangladesh, a subsidiary of Pfizer. Mr. Kabir’s father served as Chairman and CEO of Pfizer Bangladesh and also started Sajida Foundation, a family charity he named in honor of his wife on their 25th wedding anniversary. The foundation, which started as a school for 12 underprivileged children in the family’s garage, now has an annual budget of about US$ 50 million and more than 100,000 people are benefitting from a range of programs from microfinance to education to health. It owns fifty one percent of Renata.
Growing up with this kind of example, it is not a surprise that reaching out to poor, underserved communities is in Mr. Kabir’s blood. “I try to motivate and remind my field force not to forget about the people whose lives they are changing,” he says.

Note: BRAC is a key distribution partner for Renata as it has a network of 80,000 community health volunteers who go door-to-door selling essential health products, which now include the multi-nutrient powder Pushtikona. A US$ 3 million contribution from the international organization the Global Alliance for Improved Nutrition (GAIN) is helping cover initial costs of subsidized Pushtikona, marketing efforts and trainings in nutrition education.

http://www.gainhealth.org/country-stories/holistic-approach-fighting-child-malnutrition-bangladesh-story-renata

POVERTY: Bangladesh: Women Find a Way Out of Poverty

Naimul Haq
 Munni working at her factory. Credit:Labid M Ishtiaque

DHAKA, Feb 24, 2011 (IPS) - Twenty-one years ago, Munni Akter and her husband Shafiuddin could hardly afford two meals a day.The couple lived in Savar, some 35 km from here, and had no income. That is, until they turned to the Bangladesh Rural Advancement Committee (Brac), the world’s largest non-government organization working to reduce poverty.
"I was almost lost and had no skill to earn. But a neighbour told me that Brac lent money for small businesses for which they required no guarantor," 37- year-old Munni recalled.
"My husband and I wasted no time and appeared at the local Brac office to borrow money. Soon we found ourselves with some money to start vending on the streets and make profit," Munni added.
From the initial 5000 taka (40 dollars) she borrowed in 1990, her business has grown. Today, Munni has a small factory on the first floor of her two- storey concrete home in Dashkkhin Krinshnapur in Savar making sweetened puffed rice which is sold as far as 300 km southeast to the port city of Chittagong.
She employs 26 workers, and after paying labour, electricity and other costs, she has a clean profit of 1,000 dollars.
Millions of poor women like Munni have used loan money to successfully run their own businesses and free themselves from the curse of poverty, thanks to microfinance institutions like Brac.
Founded and introduced in the late 1970s, microfinancing is Bangladesh’s success story. Recent studies suggest that over 11 million Bangladeshis have benefited from borrowings, making the country the global leader in the successful use of microfinance programmes.
Getting a loan from a microfinance institution (MFI) is hassle-free and client- friendly. These MFIs knock on the doors of their clients and require no formal paperwork. Anyone who lacks skills or assets will qualify for a beginner’s loan that can lead to an advanced stage and bigger loans.
In Munni’s case, after her first 5,000-taka loan, she took several more and successfully used them to expand her business selling sweetened puffed rice.
Since Munni paid back all her loans on time, she qualified for a second stage of borrowing known as Progoti where the borrower need not belong to a group. She was able to secure a loan of 450,000 taka (6,342 dollars) in three phases, the last tranche given in March 2010.
Despite debates about the differences between "getting out of poverty" and "staying out," numerous studies have revealed that this Bangladeshi invention designed for the poor has worked. More than 40 other countries now replicate the Bangladeshi microfinance models.
MFIs offer small loans at reasonable interest rates of up to 18 percent yearly, mostly to women who would not qualify for conventional loans.
Take the case of Urmi Begum and Raxmi Rani Dey. Being street beggars, no bank or moneylender would have loaned them money. But they managed to borrow from Bangladesh’s third largest microfinance institution, Association for Social Advancement (ASA) in Rajshahi district, some 300 km northwest of the capital.
Using the loan from ASA, they both set up small grocery shops in local markets.
"Now that I have paid back loans, the tin-shed-shop belongs to me, since June 2010. I make between 100 and 150 taka a day from selling vegetables, enough to look after my disabled husband and two sons," said Rani.
To help them start or improve small-scale businesses, women who participate in the microfinance programmes are organized in groups known as samity.
Each groups consists of about 20 to 30 members, and meets once a week or once a month to discuss various issues. The members also guarantee each other’s loans.
The group meetings are also an opportunity to educate women on various aspects of business. The women are also taught to save, which is an important part of microfinancing.
"In my group, a few of my fellow colleagues did not save money to repay loans, and so they had difficulties seeking fresh loans," said 40-year-old Sultana Razia, who runs a small dairy farm selling 36 litres of milk everyday.
Rezia started with a small, risk free loan of 120 dollars, and was trained on how to become a successful dairy farmer. After four years, Rezia is the only supplier of fresh milk in her neighbourhood in Madrashapara in Savar. She has repaid all loan installments and often lends money from her profit to her employees.
Most of the MFIs have good loan recovery rates ranging from 85 to 98 percent.
This is because majority of the MFIs also run advocacy and capacity-building programmes on the proper use of borrowed money and savings.
Today, microfinance, combined with health, education and other rights-based advocacy programmes, has significantly contributed to an increase in female enrolment in schools and colleges.
In many parts of the country, surveys show that over 90 percent of girls from borrower-families attend school, compared to less than 60 percent from non-participants of microfinance programmes.
More than 2,000 MFIs work with the poorest of the poor in Bangladesh. The lion’s share of the MFI’s activities is in big NGOs like microfinance founder Grameen Bank, Brac, and ASA and similar institutions.
According to Palli Karma Sahayak Foundation (PKSF), the body which disburses and monitors all loans to its partner organizations (POs), it disbursed 1.5 billion dollars to 195 POs from 1990 up to November last year.
"Microfinance has substantially helped improve the quality of life of the poor in Bangladesh," said Dr Salehuddin Ahmed, former Bangladesh Bank Governor and also former managing director of PKSF, an apex body of more than 250 microfinance institutions.
Salehuddin, who took part in several major researches on microfinance in Bangladesh, told IPS, "The impact of successful borrowings is evident. Wages, employment, food security, coverage in health, education, sanitation and other basic needs have increased many times in the rural areas."
http://ipsnews.net/news.asp?idnews=54599