ASHRAI Bangladesh- A Savings-Led Model for Fighting Poverty and Discrimination

A Savings-Led Model for Fighting Poverty and Discrimination

 Introduction

Ashrai (pronounced, “ash roy,” meaning “shelter” in Bengali) is an NGO working among ethno-linguistic minorities living in the Barind Tract in the northwest region of Bangladesh. There are at least a million of these people (referred to as “Adibasis” in Bangladesh) in the region. They include groups with languages of Austro-Asiatic origin (the Santal, Munda, and Mahali) and Dravidian origin (Oraon and Paharia). As a group, they face substantial barriers to participation in local economic life, compounded by extremely high rates of illiteracy, ignorance and landlessness.

Table 1: Growth of Ashrai’s Village Samities

……………………………………………………………………………………………………………………………………………………………….

No. of Women Members                                                                    10,078

No. of Savings Samities                                                                        887

Savings /Capital Fund (in Taka)                                                           2,29,29,927

Loans (in Taka)                                                                                      1,41,15,599

………………………………………………………………………………………………………………………………………………………………..Ashrai Annual Report, 2016

Ashrai’s model of savings-led microfinance, now termed as community managed microfinance, is reducing the vulnerability of Adibasi clients to hunger and land loss, while supporting their efforts to stabilize their cash flow and build up family and community assets. The lessons learned from Ashrai’s practice will be of value to practitioners working elsewhere among marginalized indigenous peoples and other very poor people.

Ashrai’s Strategy

Founded in January, 1991, Ashrai is dedicated to improving the standard of living of the minority people it works with, and integrating them into the mainstream of economic development in Bangladesh. Ashrai’s strategy for achieving its goals is to support the efforts of Adibasi women and their communities to accumulate their own independent pool of capital.

Implementation of this strategy involves:

  • Investing in human capital and leadership development,
  • Incubating savings samities as a tangible first step to rebuilding the economic power of its client population,
  • Promoting a multi-tiered organizational structure that reinvents and invigorates traditional minority institutions, and
  • Withdrawing from an active support role as the different elements of the network achieve independence.

The first three phases are self-reinforcing. The savings samities must gradually accumulate the capital that the minority populations need to achieve economic emancipation. In Ashrai’s strategy, they are like a truck and forklift: they do the heavy lifting and the long-distance hauling. However, they are dependent on prior investments in training to work effectively, and on later investments in technical support and organization institution-building to keep their goals aligned with those of other groups beyond their village, and to achieve permanent independence from Ashrai.

Table-2: progress Towards Ashrai’s Exit Strategy

…………………………………………………………………………………………………………………………………………

No. of Samities                                                                                          887

………………………………………………………………………………………………………………………………………

No. of Village Council / Federation                                                          48

…………………………………………………………………………………………………………………………………….

*Ashrai Annual Report, 2016

 

Ashrai’s strategy prepares the samities to become self-reliant and sustainable, both financially and managerially. Those demonstrating consistent progress in saving and sound management are given the opportunity to borrow from Ashrai for on lending to their members. Ashrai has gradually and prudently increased lending to the samities from 79% of internal savings (June 2016).

Savings

Ashrai is catalyzing a savings-led accumulation process that could potentially lead to economic self-reliance among highly vulnerable, illiterate, indigenous peoples who earn $200 a year. Its work highlights an emerging recognition that savings balances are vital financial assets that reduce personal and family risk, in contrast to a loan, which increases income at the cost of increasing personal and family risk.

Institution

Ashrai’s support to the extreme poor like the Adibasi of Barind Tract through a savings-led model is a bottom-up approach, while branch-based MFIs focus on wide outreach and a permanent model of direct service delivery, which is a top-down approach. Ashrai works with the extreme poor Adibasi through a self-help approach, while MFIs use a banking approach.

Conclusion

The fundamental views of Ashrai have created an innovative development methodology that is effective and efficient for the rural poor, mainly the Adibasis. The NGO is providing different groups of vulnerable people with demand-driven diversified services that are financially as well as socially inclusive.

Ashrai has been promoting ‘Inclusive Development’ with the provision of services covering Financial Inclusion, Social Inclusion and Climate Change adaptation and sustainable livelihood.  The NGO delivers its vision under these three programmatic interventions.

The Financial Inclusion includes microfinance, community managed microfinance, micro-enterprise development, savings products, renewable energy, improved rural stove and bio-gas finance, and introduced ICT/automation in microfinance.

The Social Inclusion covers mainstreaming Adibasi socio-cultural development, human rights protection, gender equity, women empowerment, food security, health protection services, child education, skilled-based education and more.  Ashrai also focuses on Climate Change and sustainable livelihood through livelihood adaptation. 

At present the organization is operating microfinance program services through 70 computerized branches, and a special microfinance program named Community Managed Microfinance for ethnic communities through 48 Community Organizations.