Yet Another 'Ego Clash'

Earlier the Awami Leage requested Bangladeshi authorities to investigate the allegations regarding the so-called misuse of millions of dollars of aid money provided by the Norwegian government back in 1980s. The aid was given on the condition that it would be used for housing needs of GB members only. However, later in 1997, while reviewing Grameen Bank’s annual report, the Norwegian Embassy in Dhaka discovered in a footnote to the financial statements indicating some major changes in the Bank’s recorded balance. For the embassy, the change seemed related to the so-called aid money. At the time, the embassy had no information about the sister company Grameen Kalyan to which the aid money was transferred . Grameen Kalyan, as being one of the sister companies under Grameen umbrella, works to improve the health conditions of its members as well as non members in rural villages.

MD and one of GB members seeking treatment
at Kalyan Health Office


MD and his associates specializing in dental & eye care


MD while talking to dental care specialist

MD and his treatment room at Kalyan Health Office in rural village

When the first initial contact was made with the Embassy, the Bank sent the embassy a copy of the agreement between the bank and Kalyan along with some other documents about the organization. Grameen Kalyan, a non-profit company, was created by Grameen Bank in 1996. The main work of Grameen Kalyan is to provide loans to its employees and its members and non-members for them to use for their health care. It is very very much the same as micro loans but the purpose is different. Instead of getting loan for production purposes, the people use the loan for their health care needs It should be noted that there is no social security system in Bangladesh. The statue of Kalyan allows it to operate in a broad variety of activities except for micro loans and housing. And because of this, the Norwegian government insisted that money should stay with Grameen Bank. And, later this money was transferred back to Grameen Bank and the Norwegian government became satisfied with it and the case was closed. The purpose of this transaction is still not clear to many. Later, Yunus’ statement that goes ‘the main purpose of the transaction was to reduce tax obligations, and to secure funds for the members of Grameen Bank’ made things harder to understand. It just gave the PM Hasina another sneaky opportunity to attack Yunus from behind accusing him of tax evasion like everyone in Bangladesh, including GB’s members pay their taxes and government can’t find place to use tax money for! Whatever the reason was, on both accounts the discussion should be done on a different level. Firstly, the discussions should be fact based. This has never been done. Because, there is no such authority in Bangladesh that people can really trust from heart . If one looks at how politics work in Bangladesh, he or she can easily notice that accusation is the main form of communication in politics. Political interference in institutions is clearly visible. Political corruption and intervention is bothering everybody. In a situation like this, if someone like the PM of a country says 'hey World wake up! Yunus and his organization is sucking the blood of poor people', I would not see any sincerity in this comment. And I would say who are you to make such allegations without placing your claims on some facts that are shared with the public. Secondly, not many people, particularly in the media, want to question what kind of economy GB is creating. It is creating a huge informal economy that does not provide steady income in western standards and obviously it does not create no revenue for income tax for the government. It is informal economy that we are talking about here. What to expect. This is still important for poor rural people if nobody is doing anything about them. Small loans, big dreams! There is no single GB member paying tax, why should GB pay? Corruption is number one issue that needs to be solved in Bangladesh. Yunus, when he attempted to establish his party in 2007 said politicians in Bangladesh do politics not because they believe in ideology but money. People believed in him and his motive for being in politics. He received a very good reaction from different parts of the Bangladeshi society including the academia. But, it did not took him long to realize it was too hard to breath in the dirty politics of Bangladesh. He pulled back leaving many behind disappointed. Being the largest financial institution does not mean GB is more responsible in paying taxes than others. People and organizations who accuse Yunus of being corrupt should look into the mirror first. By just saying the truth does not bring anyone any Nobel Prize either. PM Hasina is no exception. Nobel Prize Committee is more motivated by actions. Prof. Yunus achieved this by taking actions that Bangladeshi politicians did not even imagine. He deserved an appreciation for his efforts in a country like Bangladesh. One can only understand this when he or she lives there and sees that Bangladesh needs working institutions. GB is one of them. This might sound a huge complement for the critics of the whole idea of micro loans. And, some politicians in the ruling party just can’t take it. what so ever. There are more important problems with microfinance approach. And, the problems will stay unsolved regardless of where the Board of Directors decides to use the grant or Yunus receives the top tax payer prize, or there is no corruption at all at GB. This is not the first time Hasina is doing aggressive politics. Her last victim was BNP leader Khaleda Zia that made her cry in the front of the TV channels. She had been forcefully removed from her residence. Not surprisingly, this time, another ego clash that has also hit the Canadian newspapers’ headlines. Yunus is being accused of not retiring. PM has been after Yunus for some time. But, Yunus has a lot of support and has gained sympathy that Bangladeshi people have been desperately looking for in politicians.

Recent 'ego clash' between Yunus and PM Hasina that hit Canadian newspapers' headlines

Globe and Mail

Globe and Mail

Ottawa Citizen

The Vancouver Sun

National Post

National Post

Grameen America Spreads in New York

Although there was already a good example of Grameen America Jackson Heights Branch in New York to replicate, for Abdus Salam, Grameen America Brooklyn’s first Branch Manager, starting a new branch was still not an easy task to accomplish. At one point during my interview with him, he said, “opening a branch is not easy”, I felt that he really meant it and the honest words came out of his heart. With 15 years of experience as a Zonal Officer and with a graduate degree from a reputable university in Bangladesh, the Brooklyn office in NY has been in the hands of a very experienced manager. With many years of experience, for Mr. Salam, city life in Brooklyn, was even more challenging maybe as challenging as starting a new branch, and it still is. Because, knowing the city and understanding social and economic dynamics of it is the key to a successful operation of a micro credit program.

Grameen America’s Brooklyn Branch started in February 2009. The branch, as of November 2010, had 939 under its 99 centers. And total amount of disburses was 2,338,085. Many of the women members are originally Spanish. and many of them are single mothers. The branch gives out minimum of 1500 US dollars and maximum of 2000. However, Mr. Salam adds, “by maximum I mean it increases over time”. Success brings more loans, he implies. At its current initial stage, Grameen America is now providing its members with two products, micro loan, and savings. The members of Grameen America Brooklyn branch are involved in a variety of economic activities such as selling and making jewelry, beauty salons and cosmetics accessories, ice-cream making and selling, food carts, in-home bakeries.

Micro credit has the capability to stimulate the local economy by supporting local entrepreneurs. For this, low-income individuals, who are already engaged in an economic activity, need to form a group of five and must fall in the category of poor defined by US Census Bureau. The interest rate is 15 % on a declining basis, which is appreciated by the members, as it is not possible for low-income individuals to get a loan from commercial banks. Most of the members are already involved in some sort of economic activity and this loan is very vital for their businesses. Operating a micro finance branch is a costly procedure due to higher rent, transportation and higher salaries of the staff members. And, this requires at least five years to reach financial sustainability according to Mr. Salam, which is also the objective of the other Grameen America Branches in the United States.

Grameen Bank is like a family and their members work like family members. The solidarity and team spirit is so strong that some of the members of Jackson Height Branch, the first branch of Grameen America in The States, actually got involved in forming groups in Brooklyn area, because they lived there. Laundromats, churches, community centers, parking lots, shops and such places are all potential locations for advertising Grameen America in the country. Grameen America wants to be under every stone. It wants to be heard loud and clear all over the country.

From Bangladesh to America, staff members’ profile also differs. Mr. Salam would like to use this difference in a positive way. Training, encouraging and understanding are the key features of work relations in Brooklyn Branch, which he believes will eventually bring success with Grameen America’s successful members. For him, it is just a matter of time!

Grameen America: America's Village of Jobra

Grameen Bank has been replicated in more than 40 counties in the world. At the Head Office, I worked on different replications as well. I found that cultural, economic and legislative structures were enormously challenging for GB’s operation abroad. China, Turkey, Italy and finally America are no exception. My research and first-hand interviews with the Branch and Project Managers working overseas show that GB’s job abroad is much harder than what it does in Bangladesh.

Grameen America; a completely different cultural and economic setting. If I quote from one of the branch managers’ statement from New York City, you will see what I mean.

“People in New York are very private and busy. Both male and women are working for earning. In the daytime, nobody is staying in their houses. They don’t like to talk about their work places. At night they come back to their houses but become busy in preparing food, taking care of their children. People here also don’t like to talk much and give their information (income, abilities or if they are interested to take loan) to an unknown person at their houses, work places and streets. Even vendors and shopkeepers are not willing to talk much. Migrant people are working very hard for their settlement. As work/job is available here so they are mostly found to be doing part time job along with their regular job.”

As you can see in this quotation, this is the challenging environment that I was talking about. There is no doubt that a Branch Manager from Bangladesh has to have some skills to challenge these difficulties.

At Grameen America, for loan disbursement a staggered approach is used. The staggered approach means, first, two most needy group members receive their loan. Group members decide who these two people are. After a couple of payments, the rest of the group start receiving their loans. The staggered basis kind of replaces the group pressure in Bangladesh. Only after the first two members of a circle has been approved, received their money, and begin to pay it back, does the other members become eligible for a loan. Thus, the granting of loans proceeds on a gradual basis and develops a kind of solidarity and control in terms of watching other members’ business plans and payment routine.

Like in other countries where GB method is replicated, in NY too, there is an obvious pressure on Branch Managers and of course centre managers to reach the number of new members indicated in their 5 year business plan. In order for any micro credit program to be financially sustainable, it has to expand quickly, this and likelihood of the exclusion of poorest members from group formation may limit bank’s objective abroad.

GA is focused on poor women especially immigrant women. Who is a poor person? In Bangladesh, there are some criteria in the loan application form, criteria such as size of land owned and other properties etc. GA takes the legal definition of poor of the country where the program is being replicated as its basis to locate the poor. For example, the US Census Bureau defines poverty as a function of number individuals living in a household and the amount of income that the household generates. Generally speaking any individual earning less than $10.000 annually or 5000 per individual in a family unit of 2 or more is considered to be at the poverty level in the States. In this case, GB’s main target group falls in this category. Let alone some problems with the legal definition of poverty, the way groups are formed tend to exclude the poorest of the poor. At the end of the day, who would want to deal with a troubled member in their group and take a risk? There should be another component added to the current existing system that does not allow such exclusion

Branches in New York City face several issues. One issue is space problem. The rents are high in NY and it is hard to find a good location that is central and accessible for everyone for centre meetings. People live in apartments that are not big enough for centre meetings. Advertising is another challenge. Stopping people and talking to them on the streets of NY is a difficult job. As expected, people are more reluctant to talk about their financial issues and share information with other people due to confidentiality. This makes things very hard. In Bangladesh, however, one does not even have to ask someone if he or she needs any financial help. Poverty is very visible and there is no shame or anything to hide, because, pretty much everyone in villages is poor. So, advertising is a big challenge. Laundromats, churches, community centers, parking lots and shops are main locations for advertising. Members living in NY City have a different profile. Most of them have a job, sometimes more than one odd job, which makes it too hard for centre meetings to happen at a time that is convenient for other groups. Because people living in big cities like NY do not know their neighbors even though they live in same buildings, group formation is very tough. Another, maybe something that GB did not foresee,before they opened their first branch was that some of the members are on social assistance. Getting a loan from GB could cause some problem with the Social Assistance Administration. Things have to be worked out to prevent such unexpected outcomes.

Having said all these, it is not surprising to know that fist loan group happened to be a group with Bangladeshi origin. However, GB has made a huge progress by reaching out more than 5000 thousand members.

Looking for Some Answers

After many trips in rural areas in Bangladesh, there were some issues that I reported to the Head Office for their consideration. Each point requires more in-depth analysis. However, here on the blog I will just briefly explain them.

Repayment: How logical is the weekly payment?

Although I did not see a huge reaction from members, for some members, extended payment options would be a better option. Here is why; weekly payment requirement is just a bit difficult for some certain economic activities that generate profit over time, such as growing vegetable or animal. These economic activities take months to make profit. For GB, members are not expected to start their businesses with the loan. They are already involved in an economic activity and they are earning. So, to the bank the members are expected to pay their loans weekly even though they are not making any profit out off the economic activity for which they used their loans.

Number of Staff: Is it enough?

Most centre managers deal with more than 500 members at a time, which I found very much. But, considering a centre manager’s main job in the field, this is normal according to GB’s approach. Centre managers visit centre meetings one after another just to collect weekly payments.

Who is the poor?

There are definitely poorer people if one really wants to find out in Bangladesh. The most visible ones are homeless people and beggars. They literally got nothing. There is a program called ‘Project Dignity” at Grameen but it needs to be expanded so that more people who fall in this category can be included. For GB, the definition of poor is vague. Everyone is poor, which is true. But, if one claims to reach out the poorest of the poor, the definition of poverty should be tailored accordingly. More than few occasions in the field, I came across some old members who were economically better off but they were still able to get a loan from Grameen. The answer to this; centre managers can do the monitoring. However, they have so many members to deal with. And, at the centre meetings, they spend most of their time by just collecting money, which points to another issue; use of technology. First time in a replication program of GB, the centre managers in Turkey started using post machines to collect and deposit loans. I believe that though it is a very expensive technology in Bangladesh and scale is not comparable at all with Turkish replication (TGMP), the use of this technology would make a huge difference in terms of using time more efficiently and more productively at centre meetings.

Insights from field continued

Another trip that could be a good representation was my trip to Rajbari, Faridpur, around 4 hour drive from Dhaka City. There, I was involved in similar activities with a more focus on struggling members. The reason why I was more interested in this group was that struggling members were the poorest of the poor. And, I wanted to see what kind of impact micro loans might have had on them and to assess the program and report to head office if there was anything wrong. Rajbari Branch had 3300 members under 62 centres. The branch had 5 centre managers.

Among the members, the number of basic loan users was 2700 The micro enterprise credit users were 520. Starting the first day, I observed loan disbursement at the branch. Below is just a few sample examples

Female member doing a family business in business.
Female member whose husband had a grocery shop. Their initial loan was 10.000, the second loan was 20.000 taka.

Female member whose husband repairs buses. While I was there, this husband asked the branch manager if monthly payment was an option. Because GB accepts only weekly payment, that was not possible according to the branch manager. For some members, especially those who make profit over some time, weekly payment was not a good option.

Female member who took a loan for milking cow.

At this branch, my first centre meeting started early in the morning. The centre had 73 members but the participation was as low as 19 women.The number of basic loan users was around 60 and micro enterprise loan users were around 10. In the second centre meeting the participation was again low. The centre had 69 members but only 33 of them showed up that day but many of them sent their payment one way or another. The main reason for absence according to the branch manager was sickness or pregnancy. In this centre, the number of basic loan users was 55, micro enterprise loan users were 16. The oldest membership was 20 years. When I asked if there was any women doing a separate work from husband, only one woman raised her hand. Her husband was dead. As a general rule, women's economic activities are not separate than their husbands'. This member was using the loan to produce fishing net. Women were doing their work mostly at home. Handling market was man's job. The third centre meeting I attended had 58 members and again the participation was low around 21. The number of basic loan user was 49. Oldest membership was 22 years. After the centre meeting, I talked to one of the members who took a loan from a moneylender long time ago to take her husband to the hospital. She said she paid too much interest to the moneylender. She had paid the moneylender 10 taka for 100 taka every month. Since GB started operating in Bangladesh, the influence of moneylenders in the rural areas has significantly decreased, which is a great thing. and It is definitely empowering if I define the term that way.

In rural villages depending on borrowers' conditions, people's living conditions vary. Some live in bamboo houses, some live in houses that have steel walls with a cement base. Especially in wintertime, cold weather gives rural people living in these houses a really hard time. Most of them often get sick.

At the branch, I interviewed a student who was receiving an education loan. Under this branch only 30 students were getting education loan at that time. Later, I attended another centre meeting. The centre had 52 members and only 13 of them showed up when we got there. Again the number of basic loan users was more than micro enterprise loan users, around 46. In this centre, most of the members had GPS accounts. One of the members there had gotten loan from GB for 20 years. She indicated that her situation was worse before and over time her situation got better. This member was getting both basic and micro enterprise loans from GB. In her last time, she took 40 thousand taka and invested this money on a machine used for harvesting. The machine itself cost the family 85 thousand taka. The husband was using that machine on the field. Another member I talked had used her 12 thousand taka loan to buy a cow. And she was expecting to sell it when it grew. This member had 1000 or 2000 taka daily income as a family. Another woman used her loan to invest on seeds and her husband had more control over the job. Another women I interviewed had taken a loan and invested in a grocery store and bought some products. One of the women’s husbands at the centre on the other hand was using the loan for his rickshaw, which helped him to earn around 200-300 taka a day.

Beggars are definitely an interesting case and they need more support. One of the members that I met was very successful paying her loan even though she did not have to. She was paying her weekly payment actually just to get the second loan more quickly. In her last application, the member had received 2000 taka and before 1000 taka. The member had 4 goats and her daily income was only 30-40 taka, which indicates that she is among the poorest of the poor. This member indicated that she wanted to get another loan from GB to restore the house. The member had some health problems. Despite her age, she was still able to work. Her job was to keep the bazaar road clean. She was earning 40 taka a day for the job. Despite the loan, she was still accepting money from the public, but she was not doing it full time any more. This specific struggling member had some family members in the neighborhood and she was getting some economic support from them as well.

After seeing this and other struggling members, I felt that micro loan was helping them, as long as they used the loan for productive purposes rather than consumption. However, for a struggling member, it is more likely that consumption and some other expenses related to health and shelter have more priority. One important aspect of giving loans the beggars is that it is easier to monitor them in terms of whether or not they use the loan for a productive purpose. The loan for beggars is actually used for something and it is much easier to assess the impact as they got nothing in their possession and the loan does not become a part of the family budget.

For this branch, I had found centre meeting participation relatively less than the other branches that I had visited before. However, the branch was more organized. In terms of providing alternative solution for low-income rural people’s financial needs, GB had some positive impact. Borrowing from moneylenders was a common thing in rural Bangladesh and most of the time people pay the loan back to moneylenders with excessive interest, which is very exploitative. But now, instead, the members could go to GB and get a loan. This way, at least they know what they need to pay at the end of day.

More Insights from Field

During my internship, one of my responsibilities was to write assessment reports about the branches that I visited. My visits to the branches were helpful in two ways. First, Grameen Bank was not the tall building that I went to everyday in Mirpur-2, the real Grameen Bank , and the practice was in the field. The head office was dealing with more administrative stuff and they were the policy-makers. Working in the field was a good chance for me to make some contribution to the whole idea of micro finance at the policy level. Second, in the field, I was able to see the real practice of micro finance. Here is a c couple of my sample visits.

One of the branches that I visited was located in Norsindi Area., The name of the branch was

Dangai Polash. Danga Branch had 5734 members in total. Of these members were 1700 male, 4034 were female. So, GB also gives loans to men although their main target is women. One particular aspect of Bangladeshi society is that women are pretty much invisible in daily life. They do the work at home. This immobility affects the functioning of micro finance. Most of the time when women get their loans, they hand them in to their husbands, because men are more mobile in the villages and more experienced in the market due to patriarchal culture. This situation was not problematic whatsoever for GB. For GB, it does not matter much who uses the money or who controls it, eventually development is development and it is beneficial for the whole family, for the local economy. So, except for the books that M. Yunus had written and official documents that were written for the western world, you do not see any practical application of gender sensitivity in the functioning of the program. There is nothing about gender. The whole system seems to be built on given gender structure.

At the branch, there were also the beggars, who were around 99. Under this branch there were 78 centres managed by 8 centre managers. Total staff number was 10. Total members are more than 5 thousands. So, one centre manager deals with so many members. There were also non-Grameen members who put money in their savings account. The number of the non-members was around 800. In order to get loan, members have to go thorough one week training where they learn about how the program works. If they pass the training, and if centre manager thinks that the group is ready, the branch manager pays a last visit to the member's house for final control. If everything goes well, members come to office and collect their first installments.

At this branch, after getting basic introduction from the Branch manager, I did my routine observation in the office while the members were collecting their loans. Centre managers were also coming in before noon in order to bring the money they collected during centre meetings. The members in the community were doing a variety of economic activities. Some of the economic activities that drew my attention were: Brick and sand construction, cloth making, grocery shops, growing vegetables and growing chicken and cow milk. Below is some photos of the borrowers at work.

At this branch, besides micro loans, I also learnt about how saving and GPS programs worked. It is just very interesting to see people coming in with some cash in their hands like you are in a normal commercial bank and walk up to the branch manager's table and get their deposit recorded on their bank book. There, I interviewed many borrowers. I met a member who had been a member since the inception of Grameen Bank. It was unbelievable to see that GB was such an important organization in people's life in rural Bangladesh. Members getting loans from GB for 20-25 years maybe even longer years. Members that I talked to were overall happy with the loan they were receiving. Many of them indicated that Grameen was the only institution they could rely on at that time . They were poor and had no business with commercial banks. During my individual house visits, I met with members with different economic background. The members I met, some were basic loan users, and some were micro enterprise loan users. In the individual house meetings, I asked the members about their economic activities and how they found Grameen Bank in general. Overall reaction was very positive. The only issue raised by the members was about the housing loan, which was mostly raised by male members. Later, I learnt that this loan was not operating in the region.

GB also runs a project through one of its sister companies called Grameen Shakti. This company provided renewable and affordable energy systems for low-income people. Bio-gas and solar power are the main components of this project. It is beyond my imagination that all a single family needs for bio - operated stove is just seven cows . With the installation of the necessary equipments under ground next to a small pool where animal waste is piled up, you get free natural gas!. Seeing it worked just blew my mind. It is quite something.

Although this project was fairly new, I learnt a lot about it. In Rajbari, in order to get a sense of education situation, I visited two schools and received information first hand from the principals and also the teachers.

At the school, there were students who took Grameen Scholarships and Education Loan as well. I interviewed one student who took an education loan. He was very hopeful about his future and was sure he would do his best to pay the loan back after graduation. Like in my other visits in other locations, here, I also visited an area office and met with the manager and the staff members. They were the real laborers.

Area manager is superior in rank than branch managers and does the final approval of loan applications. The area office is fully computerized and plays an important role between branch and head office.

Helping Beggars: a different approach

Begging is the last option for survival for a poor person. In Bangladesh, life is rough. There are many beggars on the streets of Dhaka city. One can’t help asking why GB is not operating in the urban areas. When I asked the GB employees about this, they said 'Grameen Bank means Rural Bank in Bangla. It was established under a special permission by the government that allows GB to operate only in rural areas'. However, after getting this kind of responses at the Head Office, I started to think why not change the rule and operate in the urban areas too. this can't be that hard. The poverty in urban areas especially in slums seems more visible and takes a different shape than the poverty in rural areas. But, personally I came to this belief that the real poorest of the poor are in urban areas. They literally have nothing, if we compare them with the poor in the rural areas. There, they can at least get by through some extended family relations and small agriculture business. In urban areas, however, this is not easy for everyone. Most of the beggars are actually village people who came to city to look for better opportunities. Considering the fact that changing the rules under which GB was established can not be hard, the main reason why GB is not operating in urban areas is much different than it looks. Basically, it comes down to the success of GB. Most of the GB employees told me that GB could not give loan to poor people in urban areas because, it is hard to track them. Due to the informal economic activities, people in urban areas often do not have a permanent address. And, this worries GB. In rural areas, families and women are immobile. Everyone knows their neighbors and where they live or when they moved if they did. This is why, I believe ,GB is not willing to operate in urban areas. However, GB gives funding and technical support to the local NGOs that work in the city. But, GB does not want to risk its success that it had achieved in rural areas. During my internship at GB, I got the impression that the main driving force behind working with local NGOs was to confront the criticisms towards GB on this. GB by working local NGOs tries to show the world that hey look, we do care about the poor people in urban areas. However, this indirect contribution does not seem to cover the downside of GB’s approach.

Speaking of beggars, some figures; as of August 2010, number of beggar members was around 90 thousand. and, GB disbursed around 150 million taka. The main objective of this program is to help beggars to quit begging and help them to live a normal life by taking up some kind of economic activity. According to GB official documents. Around 19 thousands beggars have quit begging and have been making a living as door-to-door sales persons. 9 thousand of them have joined GB groups as normal borrowers. Beggars also open personal saving accounts at GB and the present balance stands at 7.86 million taka.

Basic features of the program are:
1) Typical GB rules do not apply to beggar members.

2) Loans are interest free. Repayment can be made in a very long term, which reduces weekly payment.
3) Beggar members are also covered under life insurance and loan insurance programs without any costs.

4) Beggars do not have to form groups to get a loan.
5) Members are not required to give up begging. But ,they are encouraged to do so by undertaking a income generating activity.

The last characteristic is the most interesting characteristics of beggar program. Although GB’s intention is to stop beggars from begging, they know that micro loans can not do the job. Overall beggar program has its own drawback. During my internship, I had chance to meet with many beggars in the field. At first, I was so excited that finally GB is pushing itself to reach the poorest of the poor. I was also excited because beggars are a good example to clearly see how the loans are affecting their life. There is one important reason for this. When normal borrower, who do no fall into the poorest of the poor category, received a loan, that loan goes into the family budget and because the amount is small, it just disappears. Sometimes, the borrowers do not even remember what they did with the loan. The loan is just not separate from the family budget. It is part of it. The members most of time have difficulty talking about specifically the loan because it directly goes into the family budget and they can not differentiate that. However, in the case of beggars, the situation is different. Because these members do not really have anything in their possession, the loan is clearly visible to the researchers as well as the members. Members know where the loan goes and the researcher is also able to reach a reliable conclusion about the overall impact of the loan on beggars. During my internship, the beggar members that I talked to were using the loan for more consumption purposes than productive purposes. This is mainly understandable, as these people desperately need help. They need financial support to maintain their daily life. They need food, shelter and health services. Under these circumstances, it is hard to expect them to quit begging and use the loan for a productive purpose. On top of everything, the loans are very small, return is too small and some beggars lack skills to engage in economic activity. So, I have doubts about the numbers of success stories in the official documents of GB. However, this does not rule out the fact that there are exceptions. One of the beggars that I spoke to had joined GB 5 years ago. He was having difficulty speaking and understanding me during our conversation. His first loan was 200-300 taka and last loan was 2000 taka. Before GB, he was staying with his brother and later they got separated and he moved to his house he inherited from his father. He was married and had two kids. 12 ad 3 years old.

With the first loan he bought chickens and two goats, he used the second loan to buy 2 cows he bought the cows they were small and when I talked to him, the Eid festival, one of the biggest religious festival where people sacrifice animals, he was so excited that he would be able to sell the cows at a good price in the animal market. But, not sure he was joking or not, he was hoping to sell the cows for 60 thousands while the actual price in the market was hovering aorund15-16 thousand. He said he purchased them around for 10 thousand taka each. That means when he got the loans from GB, he had some money laying somewhere. In the local market one chicken sells for 200 taka, that means with 2000 taka he can get only 10 chickens. Not enough money to buy enough cows or goats. The loan that GB gives to beggars is too small to do a real business. Every beggars’ conditions are different but it is likely that it is very hard for them to use the loan for more productive purposes as they have different priorities on their urgent expense list.

Another beggar member was a lady. She had 6 goats and she was renting 4 of them to the neighbors. In her first time, 6 years ago, she took 1000 taka and her last loan was 2000 taka. She was paying 40 taka every week. And, her daily income was around 30-40 taka, which is less than a dollar. The member was thinking of getting another loan and she openly said that she would use the loan to restore the roof of her house.

Her house was right next to her sister’s house, the bamboo house in the photo above. Her sister’s husband was a taxi driver. This member had also some health problems and she was very old. Her job wast to keep the roads in the bazaar clean. The municipality was paying her 40 taka a day (less than a dollar). She admitted that she was still begging. But, she said she was not going door to door anymore. But, she accepted money from people on the street. This member had no kids and this was affecting her condition in a negative way. Having kids provides a kind of economic security for families in Bangladesh. This is one of the reason behind the slowly decreasing birth rate despite government's efforts. Like all other members, beggars do not have any social security. This member, all she had was a bamboo house and 4 goats. In this particular case, because the member was living alone, she was able to control her loan. He case was different as compared to other women who were married and whose husbands were working. In those cases, women in Bangladesh are likely to lose their control over their loans.