When it comes to "micro-financing" in Bangladesh, the first names that pop into our minds are "Grameen Bank" and "BRAC". During the "battle" between these two giants, another institution has found its niche in the competition and made its own mark in the microfinance institution (MFI) sector of the country. It is the Association for Social Advancement (ASA).
Numerous MFIs are making their contribution to poverty alleviation in the country alongside the government efforts. Of them, ASA is the leading torchbearer reaching out to the people in outreach areas with microcredit and thus lifting them out of poverty. According to the Credit and Development Forum (CDF) report on "Bangladesh Microfinance Statistics 2016-17" ASA became the topmost MFI of the country in terms of loan disbursement, outstanding loans, the number of branches, etc. The report also mentioned that ASA had the 2nd highest number of clients during 2016-17.
The journey began in 1978, thanks to Md. Shafiqual Haque Choudhury, with a view to rebuilding the rural structure in a "bottom-up approach" by empowering landless villagers who lost a great deal during the Liberation War in 1971. The initial focus was on social development in areas like health, education, nutrition and sanitation through providing credit to the people in need. However, in 1991 microfinance became the core programme of ASA. Then little did they know that 26 years later the programme would pave their way for emerging as the number one MFI of the country.
Over the years, ASA introduced innovative programmes to meet the needs of the rural population. In 1993, the small savings programme was introduced for the clients enabling them to save at least a small amount of money in their accounts. Later on, they offered loan insurance to shield the inheritors of the clients in the case of the latter's sudden demise so that the loans do not fall into arrears. It also introduced interest-free flood rehabilitation loans, savings against loan insurance, small business loan, voluntary savings, etc.
In 2001, ASA became a completely grants/donor-free organisation. They kept on innovating different programmes to influence more and more lives in diverse areas across rural Bangladesh. In 2003, the Small Entrepreneur Lending was introduced. The Hardcore Poor Loan was also introduced for the poor who were unable to receive small loans. Different programmes such as Mini Life Insurance, Education Loan, Long Term Savings (LTS), quicker and safer Remittance Service, Primary Education Strengthening Programme, Health Programme, Physiotherapy Programme, Sanitation Programme, etc. were introduced over the years to improve the quality of lives for the poor and under-privileged population.
In a bid to materialise their vision of establishing a poverty-free society, ASA offered unique programmes like Business Development Service Loan to rehabilitate the poor people after any natural calamity. It also introduced Monga Loan to tackle the situation in areas affected by seasonal joblessness. In 2006, the Information Technology Loan was introduced to help the clients facilitating their access to modern technology and ensure their participation in commercial use of technology. The Agribusiness Loan was introduced in 2007 to promote all kinds of agro-based businesses and assist the small farmers in their cultivation.
All these innovative programmes led ASA to achieve recognitions over the years on the global stage. In 2002, ASA was selected as the best TA (Technical Assistance) provider globally by the United Nations Development Programme (UNDP). In 2005, ASA scored exceptionally best results in all six categories in the Microfinance Information Exchange, Washington (MIX) report. But the ultimate recognition came in 2007 when ASA was selected as the best managed MFI of the world by the Forbes magazine, USA. Later in 2012, the Global Magazine of Switzerland chose ASA as one of the 100 best non-governmental organisations (NGOs).
The secret of ASA success lies in the standard of its low-cost microfinance. ADB named the structure of ASA as "Ford motor model of microfinance" for its operational cost-effectiveness and sustainability in the MFI sector. Some distinct features of ASA's operations are as follows:
- Cost-effective management: Simplified accounting and cash-handling are distributed between the branch managers and loan officers. It is followed up by senior staff as per a tight schedule of repeated monitoring at four different levels stretching up to the head office. Male staff members live on the branch premises which eliminate the need for additional security guards. Districts and regions operate without support staffers or separate offices. District and regional managers play supervisory roles sharing a building and services with one or more branches.
- Efficient fund management: The annual work plan is prepared branch-wise, with separate fiscal targets and cash flow projection. Once the money comes in from daily collections (from savings, insurance premiums and loan installments), the branch calculates daily accounts or expenditure needs and deposits the remaining money with a bank. The branch office has the option to withdraw money as required. One branch can even borrow from other branches of the same district, based on their surplus.
- Well-defined work process: No training is required for the day-to-day activities. A standardised and simplified work routine, coupled with a few days of supervised work experience in a branch, enables the new recruits to start work independently right away. No in-service training is provided to head office staffers as well. The head office develops strategies and procedures and then sends manuals and instructions to the field level for execution.
- Specialisation: As an MFI, ASA concentrates only on providing financial services and follows a single loan policy per client in accordance with its policy of specialisation.
ASA has come up with some distinct features in their savings and loan segments as well. Clients whom ASA considers as the most vulnerable are encouraged to go savings so that they could withdraw their deposits anytime, unlike the policies adopted by other MFIs of the country. When MFIs were focusing on high interest rates, ASA decreased the rate from 15 per cent to 12.5 per cent, resulting in generating employment for 92 per cent of the borrowers. (ASA Impact Assessment Report, 2015)
According to the Annual Report of 2016-17, ASA served 7.85 million clients with disbursement of Tk 269.59 billion in loans (28.95 per cent higher than that of the previous year). The outstanding loan amounted to Tk 154.71 billion across the country. Apart from the microfinance service, 8.0 million people, mostly underprivileged, receive non-financial services such as primary healthcare, education, physiotherapy, sanitation services, etc. from ASA. It has been providing technical and managerial assistances for development of microfinance in 12 countries.
With all the strategies in place and in-line with their vision, Md. Shafiqual Haque Choudhury, founder and president of ASA, firmly believes that it would be possible to achieve the desired outcome in near future that would make the lives of the deprived people better.
Hosna Saba Tarin led a team comprising Joy Bhattacharjee, Arafat Rahman Khan, Ashiqur Rahman and Md. Asiful Haque in carrying out a research into how ASA contributed to poverty alleviation in the country. They are students under the MBA Programme of the Institute of Business Administration (IBA), University of Dhaka.
