For millions of poor and extreme poor in Bangladesh, a small loan that required no collateral or documentation, and that was available in the absence of any formal financial support, played a major part in lifting them out of abject poverty. This small loan has played a big role in transforming and saving lives, building leaders, ensuring the education of children, and enabling millions of marginalized and poverty-stricken individuals and families to survive against formidable odds. The Microfinance industry, now valued at BDT 626 billion benefits over 2.5 million people in the country, according to a World Bank estimate in September 2016.
SAJIDA Foundation’s microfinance program which started in 1993 operates on the principles of quality, integrity, innovation and transparency. The program now has 188 microfinance branches in 20 districts with a cumulative recovery rate of 99.74% (with a self-sufficiency level of 121%) and is able to serve 245,539 members with different kinds of loans. Through a partnership with the Palli Karmi Sahayak Foundation (PKSF), the program has progressed significantly and looks towards the future with further plans for growth.
With its progressive and inclusive approach, SAJIDA’s microfinance has taken great strides in poverty alleviation, focusing increasingly on innovative solutions and usage of technology at all levels while ensuring a quality of services provided. As the program continues to expand, building on research and knowledge, it continues to prioritize the needs of its beneficiaries, with concerted efforts to build on member services, evolving into a more formalized financial institution and stepping towards international development.
Innovation and Technology
SAJIDA Foundation has introduced mobile banking for clients in 16 branches whereby they are able to avail Mobile Banking facilities either through Bkash or Rocket. Mobile banking facilities through BKash were introduced to 5 branches in February 2015 while Rocket facilities were introduced one branch in May 2017. Clients are able to repay loans using this technology without having to visit their microfinance branches and SAJIDA’s Microfinance Field Officers are able to better utilize their time in the provision of other microfinance services and better serve all clients.
As of June 2017
|Total Number of Branches||188|
|Total Number of Program Staff||1,753|
|Total Number of Field/Credit Officers||963|
|Total Number of Members||245,539|
|Total Number of Borrowers||193,280|
|Loan Disbursement for the Year||BDT 12,415 Million|
|Cumulative Loan Disbursement||BDT 45,490 Million|
|Loan Outstanding (Principal)||BDT 7,493 Million|
|Average Loan Size per Borrower (JAGORON)||BDT 25,410|
|Total Member Savings||BDT 2,365 Million|
|Average Savings per Member||BDT 9,633|
|On-Time Loan Recovery Rate||98.87%|
|Cumulative Loan Recovery Rate||99.74%|
|Self Sufficiency Level||122%|
5 Years Microfinance Performance Analysis (Amount in BDT)
|INDICATORS||FY 2011-12||FY 2012-13||FY 2013-14||FY 2014-15||FY 2015-16|
|Number of Branch||78||101||102||124||162|
|Net Income during the year||112,730,815||64,865,377||90,819,927||60,805,121||144,380,146|
|Portfolio at Risk||38,944,750||61,545,024||77,812,907||147,877,536||97,625,142|
|Total Field Officer||416||489||537||585||672|
|Debt to Equity Ratio||4.62||4.99||5.13||4.29||5.41|
|Deposits to Loans||31.68%||35.60%||39.07%||43.97%||36.34%|
|Deposits to Assets||26.66%||28.05%||32.43%||37.97%||32.99%|
|Portfolio to Assets||84.17%||78.77%||83.00%||86.35%||90.78%|
|Number of Borrower||114,110||121,184||133,362||134,362||165,883|
|Average Loan Balance per Borrower||15,553||17,141||19,490||21,095||27,818|
|Number of Depositor||128,170||141,348||157,309||159,549||200,504|
|Depositor per Branch||1,643||1,399||1,542||1,287||1,238|
|Depositor per Group||24||21||25||22||22|
|Average Deposit per Depositor||4,386||5,232||6,455||7,812||8,363|
|Borrower to Depositor Ratio||89%||86%||85%||84%||83%|
|Growth in Average Outstanding per Borrower||47%||17%||25%||9%||63%|
|Growth in Average Deposit per Depositor||37%||32%||37%||23%||35%|
|OVERALL FINANCIAL PERFORMANCE|
|Return on Assets||6.23%||2.73%||3.15%||1.90%||3.45%|
|Return on Equity||37.36%||16.61%||19.38%||11.08%||21.49%|
|Yield on Gross Portfolio||26.67%||24.32%||23.89%||23.04%||21.25%|
|Provision for Loan Impairment/Assets||0.47%||0.79%||1.08%||1.92%||1.18%|
|Operating Expenses/Loan Portfolio||13.80%||14.99%||14.52%||13.27%||12.95%|
|Personnel Expenses/Loan Portfolio||9.13%||9.38%||9.06%||8.86%||8.28%|
|Cost per Borrower||1,805||2,160||2,545||2,683||2,611|
|Cost per Loan||1,652||1,868||2,188||2382||2,469|
|Borrower per Staff||137||120||132||124||126|
|Borrower per Field Officer||274||248||248||230||247|
|Loan Outstanding per Field Officer (In Lac)||42.66||42.48||48.40||48.45||68.67|
|Loan Outstanding per Staff (In Lac)||21.31||20.57||25.71||26.22||34.96|
|Depositor per Staff||154||140||156||148||152|
|Depositor per Field Officer||308||289||293||273||298|
|Personnel Allocation Ratio||49.94%||48.42%||53.12%||54.12%||50.91%|
|CLASSIFICATION OF LOAN PORTFOLIO|
|Regular (Loan with no overdue installments)||97.81%||97.04%||97.01%||94.78%||97.15%|
|Watchful (Loan default duration between 1 and 30 days)||0.22%||0.26%||0.28%||0.16%||0.13%|
|Sub-standard (Loan default duration between 31 and 180 days)||0.52%||0.97%||0.74%||1.27%||0.33%|
|Doubtful (Loan default duration between 181 and 365 days)||0.38%||0.55%||0.65%||2.02%||0.27%|
|Bad (Loan default duration above 365 days)||1.08%||1.18%||1.33%||1.76%||2.12%|
|RISK COVERAGE AND LIQUIDITY|
|Loan Loss Rate||0.19%||0.15%||0.50%||0.36%||0.52%|
|Risk Coverage Ratio||117.56%||104.21%||109.84%||111.29%||118.62%|
|Non-earning Liquid Assets as a % of Total Assets||11.88%||18.05%||13.99%||9.63%||6.47%|
This category of loans, prioritizing marginalized women, allows members to borrow up to BDT 74,000. The loan needs to be repaid within 12 months. A service charge of 25% in declining is added to these loans. All new members must avail loans at least twice within this range of money before being allowed to Pragrosor (Graduate) to larger sums. Jagoron loans are commonly availed by female beneficiaries between the ages of 18 to 65 years.
This category of loans allows members to borrow from BDT 75,000 to BDT 149,000 which must be repaid within 12 months. All persons availing the Pragroshor loan are eligible for the Agrosor or Special loan if:
- They had maintained all stipulations within the scope of the loan and had paid their loan premiums in a timely fashion
- They had availed the Pragrosor loan at least twice
Members of other microfinance organizations who have a history of following rules and regulations or previous members of SAJIDA Foundation with good records are eligible to avail this loan as well. The member must present his/her passbook/a copy of their subsidiary ledger/ a copy of their transaction record/ any other relevant documentation in order to avail such loans. The member must also be able to prove that s/he has a minimum of a year’s experience in the area which they would use the loan. As collateral to the loan, the client must present deeds of his land, advance papers of his place of business or a cheque from his/ her guarantor’s bank account- not more than one. These loans have a declining service charge of 25%.
Loans falling within the scope of Agrosor include Agrosor, Migration, Remittance and Service holder welfare and are ranged within BDT 1,50,000 and BDT 5,00,000. These loans must be repaid within one of three payment periods: 12, 15 and 18 months and have a declining service charge of 25%. As collateral, the borrower must present a cheque, deeds to their land, the advance document for their business place or a cheque from their guarantor (not more than one of the four). The Migration, Remittance or Service holder welfare loans are not available for groups.
These loans can fall within the scope of any of the prior mentioned loans whether in groups or individually with the exception that loans falling within this category exceed BDT 5,00,000 and would need to be repaid within 12, 15, 18, 24 or 36 months. Loans falling within the scope of the Agrosor and Pragrosor loans must have a record of having taken loans within the scope of those loans at least twice previously. All investments and businesses undertaken with this loan must be within 24 months and development of fixed assets such as building/ repairing homes, /buying land, taking mortgages etc. should be completed within 36 months. It is proposed that it would be better to take loans for periods less than 18 months on investments that do not involve the development of fixed assets. As collateral, the borrower must present a cheque, deeds to their land, the advance document for their place of business place or a cheque from their guarantor (not more than one of the four). The Migration/ Remittance or Service holder welfare loans are not available for groups. These loans have a declining service charge of 22%.
This loan is provided to marginalized farmers at declining service charge of 19% – 25% with the view to support cereal crop cultivation, seasonal farming, dairy or cattle rearing, fish culture, purchase Agri machineries or any agriculture related activity. The loan ceiling is maximum BDT 74,000 with 25 lacs, can be taken individually or as group 12-36 month duration. Repayment is through weekly, bi-weekly, or monthly instalments. Clients are also allowed to take seasonal loan just after 3 months to meet up any emergency related with activity.
Ultra Poor Loan (Buniad)
This product specifically targets the ultra poor who have no particular source of income or livelihood. Any man or woman identified as ultra poor on the basis of this criteria can avail this loan at declining service charge of 15%. Loan ceiling is highest at BDT 60,000 with repayment through weekly, bi-weekly or monthly instalments.
Water and Sanitation Loan
SAJIDA offers water and sanitation loan for improved access to water and sanitation. The loan amount varies between BDT 5000 to BDT 300,000 with declining service charge of f 25%. Borrowers are encouraged to partially invest in the cost of installing or repairing facilities with their own funds. This loan is eligible for both groups and individuals.
The Disaster Loan is disbursed to the members immediately following a disaster to recover losses and allay emergency expenditures. The loan amount can be up to BDT 10,000 at 15% declining service charge and is repayable through 40 weekly/12 monthly installments. The loan allows 1-3 months grace period.
The Education Loan is given with an amount of up to BDT 30,000 with declining service charge of 15% repayable through 24 monthly installments while grace period is 2 months.
Health and Emergency Loan
Emergency Loan is provided for health and other emergencies amounting up to BDT 30,000 with a 15%declining service charge and is repayable through 24 monthly installments after a one to three months grace period.
SAJIDA allows for preapproved loans for seasonal enterprises. The organization takes into account the need for seasonal changes of certain clients and approves loans for these changes in advance when providing loans for the current season. For instance, a borrower who might be investing in a t-shirt business today might need to invest in sweater production for the winter season. The loan for the following loan is approved when the first loan is. A client is allowed to take this loan between 3 to 6 months from the date of disbursement of core loan i.e two loans duration which is maximum 15 months.
SAJIDA is launching a special Customer Loyalty Program for long-term clients in the interest of sustainable development of its members and to reduce dropouts. It has been observed that clients who undertake different ventures with sporadic loans and partnerships with financial organizations are often unable to reach the fullest potential of their ventures that they might have otherwise achieved in their partnership with the organization. SAJIDA Foundation ensures savings programs, specific trainings and awareness programs that are pertinent to their development and drop-out clients and sporadic borrowers miss out on these integral issues without steady partnerships. This program will be providing “Loyal Clients” with a variety of additional facilities for their sustained growth and partnership with the organization. Under this program, clients have the opportunity to take loans with lesser or no interests, have educational and healthcare support which serves as an incentive in maintaining their partnership with SAJIDA. Clients will further be eligible to avail a grace period in repayment of their loans. Whereas regular clients need to make repayments on a weekly basis, Loyal Clients will have a longer repayment period so they would have the opportunity to utilize the entirety of their loans. Through this program, SAJIDA Foundation will have the opportunity to ensure steady development of the client so they are able to reach a point where they are able to become micro entrepreneurs on their own merit or graduate to a point of financial self-dependence.
Clients must meet the following criteria in order to have a “Loyal Customer” status:
- S/he has availed three or more loans from SAJIDA.
- S/he has paid all loan installments in a timely manner.
- S/he has maintained all rules and regulations.
Under special circumstances, clients who have migrated from other financial institutions and have good records pertaining to points 2 and 3 above will also be eligible for some benefits under the customer loyalty program.
Benefits for loyal customers
- Waiving of Nirapotta fees
- For loans of 12 months, the client will receive a 10% discount on the service charge of the final loan received for the final loan of the year
- If the client had availed a Samriddhi savings loan, they will have the opportunity to save (up to 8%) with flexible profits
- If any family member of the customer falls ill, the customer is eligible to borrow BDT 10,000 (a loan for up to 12 months) without having to commence repayments for the first three months.
- For their children’s education, clients can borrow up to BDT 10,000 at a 15% decline service charge (BDT 20,000 for 2 children) at any point of the year
- The service charge reduced to 23% if the loan is between BDT 2,00,001 to BDT 5,00,000
- The service charge reduced to 20% if the loan is between BDT 5,00,001 to BDT 25,00,000
The microfinance program is joined by a mandatory savings program, the interest rate of which is 6% per annum. While savings differ from member to member, the minimum agreed upon saving must be BDT 75 a month. For the first loan period, it is mandatory for the client to retain 2.5% of the total loan amount in savings and s/he is unable to withdraw the saving. For those who had already availed loans, they are able to draw from the savings as long as they maintain a balance of 2.5% of the total disbursed loan amount.
Astha savings are voluntary deposit schemes for a term. Clients deposit a prescribed amount for this savings scheme earning up to 8% in interests.
Samriddhi savings are voluntary deposit schemes This savings scheme encourages families to deposit a minimum of BDT 200 per month where they earn up to 7% in interests.