SONALI – Strengthening Opportunities for Addressing Livelihoods

In August, 2006, Sajida Foundation and Taranga with funding from CLP (Chars Livelihood Project) started the VSLA-NPS (Village Savings and Loan Association-Nirapod Palli Sanchoy) pilot project in six upazilas of the district of Jamalpur. During this time SAJIDA's operational areas were in Dewanganj, Islampur and Bakshiganj and Taranga was operational in Jamalpur Sadar, Madarganj and Sharishabari. In the first phase of the project SAJIDA organized 90 centres while Taranga organized 96. The second phase of the project started in July, 2007 and during this time, including 96 samitis organized by Taranga, SAJIDA's working area expanded into 6 upazilas and the project continued until the contract expired on 31st March, 2009. At this time the total number of centres with 12,421 members in the aforementioned 6 upazilas stood at 554.

The planning for SONALI (Strenghtening Opportunities for Addressing Livelihood) began at the end of the contract with CLP with the purpose to continue providing services to the members. It was initiated as a pilot project in May, 2009 targeting three upazilas - Dewanganj, Islampur and Bakshiganj.

Project Objectives:

• To sustain the link made with poor and extreme poor char dwellers through the VSLA pilot project funded by CLP-DFID.
• To assist the natives of the area sustain the development of their lives and livelihoods by providing the opportunity of making modern and scientific advancements in their work.

Project Goal

To eradicate livelihood insecurities from the lives of destitute char dwellers and creating sustainable livelihood opportunities for them.

Project Activities

• VSLA Centres
• Cow Fattening
• HELP (Micro-insurance)
• One-time Share purchase (External Capital)

HELP for char-dwellers

The most marginalized VSL members of the Jamalpur char areas are financially handicapped with no access to modern healthcare or even various government and non-government benefits. This group typically seeks consultations with village doctors or medicine from the local bazaar during times of illnesses. SAJIDA, from its experience and learning from HELP, believes in providing financial assistance through health cards worth a premium of BDT 250 to a cardholder and his family instead of providing direct healthcare, and assessing how much this health card has benefitted the members. Through this initiative a pilot HELP was launched for 270 VSL committees in 3 upazilas.

VSL Associations

VSL (Village Savings and Loan) Association is a member controlled and managed association. Project staff plays the role of training members in the first phase in running the association and providing consultations in the second phase. Once the members have been trained they are in full control of managing the association as well as activities where decision-making is involved. Association members engage in micro-credit transactions with their accumulated funds, completing one operational cycle over 42-45 weeks. At the end of each cycle, once the accounts and finances have been settled, returns earned from interest payments along with funds deposited by the members are distributed and a new cycle begins. A new management is elected for the association for the next cycle which may involve the exclusion of some old members and inclusion of new.

Cow Fattening

Although VSL's pilot project funded by CLP-DFID ended in March 2009, SAJIDA felt it was important to sustain the connection established with poor char dwellers in Jamalpur district. SAJIDA believed that the VSL association and its members could undertake an intiative that would benefit both the association and the destitute char dwellers, relieving them from future distress through sustainable job creation. With this objective, an exchange of views was conducted by association members about the work experiences of the char dwellers. This exchange revealed that majority of the char dwellers in this area were experienced in cow-rearing and all year they engaged in the rearing of leased cows. It was also found that the char areas are suitable for cow rearing. Focusing on the suitability of the area as well as the experience of its inhabitants, SAJIDA, as part of the SONALI project, provided 250 cows to 235 char dwellers in 3 upazilas for cow fattening which were sold before Qurbani Eid in 2009.

One-time Share purchase / External Capital

Often due to shortage of funds, VSL Association's credit provision fails to meet member demands resulting in pessimism among members who then end up borrowing from other corrupt lenders to meet the shortfall. When the association floats its shares in the market, like the members SAJIDA also can buy one-time shares which would permit the members to access extra loan facility and at the end of the share out they can also get dividends (profits) of the shares. During a cycle, association members can fix the value per share and SAJIDA will disburse the entire amount at one time for the total number of shares purchased. The association will operate in accordance with the rules and regulations decided upon by members earlier and after the share out, the association will refund SAJIDA their principal amount along with the profit.

Based on this concept, SAJIDA has purchased shares worth BDT 916,000.00 from 59 associations of Dewanganj and Islampur. Against this purchase of shares, SAJIDA is expecting a profit of 30%.

After the share out of shares purchased against running projects of various associations, possibilities and limitations of such projects can be assessed. Based on this assessment, SAJIDA can decide on whether to continue such share purchase or not on the basis of its merit.