Appendix A
PPAExtension reporting
* This report will be included as an Annex to agencies’PPA Project Completion Reports *
Review Date: / DFID to completeTitle: Islamic Relief Bangladesh
Programme Code: DFID to complete / Start Date: 1 April 2016 / End Date:31 December 2016
A. SUMMARY AND SUSTAINABLITY(maximum 1page)
Summary of key achievements during the nine month extension period
Provide a brief outline of the key achievements during the nine month extension period. This should include details of any specific results not already covered in Section B responses, and any additional unanticipated outcomes.
To contribute to reduce poverty of the rural poor in Bangladesh by providing Islamic microfinance (I-MF) services and strengthening the Islamic microfinance system in Bangladesh through establishing sustainable Islamic microfinance institution (I-MFI), capacity building, demonstrating and advocating for widening Shariah-compliant interest-free financial access for small-scale entrepreneurs and ultrapoor households,Islamic Relief Bangladesh (IRB) has been implementing a project named “Expanding Financial Inclusion in Bangladesh through Islamic Microfinance” (I-MF). With the funding of DFID PPA and support from Islamic Relief Worldwide (IRW), IRB has been implementing the project to develop the lives of the poor and vulnerable families through developing community-led SHG (Self Help Group) model as a way of providing Shariah-compliant Islamic ,microfinanceservices. IRB could not develop the community-led I-MF system to serve the poor and vulnerable families if IRW was involved in developing the project.
This report covering the period April 2016 to December 2016. During this period, through this project, IRB continues to support Self Help Group (SHG) as an alternative approach for making low-cost finance available to the ultrapoor families. IRB took different initiatives in promoting Islamic microfinance across Bangladesh.IRB has been working on developing Islamic microfinance sub-sector in Bangladesh organized trainings for capacity building of local I-MFIs/MFIs and NGOs, commissioned research works on I-MF in Bangladesh, and developed a I-MF networking body for building relationships with related government bodies, selected local MFIs/I-MFIs, academics and private Islamic banks. IRB also developed ‘Noriba’ website, an online fund collection and distribution mechanism for the poor members of SHGs. ‘Noriba’is developed and will be introduced among the well-off people who will be invited to support the poor households. After all, this projectis helping to promote Islamic microfinance in Bangladesh through creating a favorable environment, initiating human resource development organizational development. All theseefforts are contributing to expand financial inclusion through Islamic microfinance and reducing poverty of the rural poor in Bangladesh. This project is aligned with SDGs (Sustainable Development Goals).
Summary of the key changes and/or improvements that will be sustained at the end of the extension period
Provide a brief outline of the key changes/improvements that will be sustained at the end of the extension period and the expected impact of these changes/improvements
The project is successful in terms of developing new initiatives which will be long sustained and contribute to further development of the initiatives taken by IRB through this project. IRB has taken different steps to continue the key activities for the sustainability of the project after phasing out which includes:
Establishing SHG as an alternative approach for making low-cost finance available to the ultra poor for long lasting economic activities through community financing using Islamic Microfinance principles.
Working on establishing a MRA licenced local microfinance institution to provide Islamic Shariah compliant financial services to the poor and vulnerable families.
Formed a well established ‘apex body’ of SHGs to support community based economic and social activities through SHGs
Created a well functional Islamic microfiance working group,
Promoting ‘noriba’ website- an online based fund collection and distribution mechanism.
Introducing microtakaful model with risk fund amongt the SHG members through a group/cooperative approach.
The project has achieved substantial results so far in terms of socio-economic and resource profile of the project beneficiaries through SHG approach by initiating community-led Islamic microfinance product and services.
Women participation in decision making process and their mobility also significantly increased.This project followed the SHG-led approach as community development strategy. In these SHGs, community people lead in group formation, management and operation process. The process is fully women-focused, participatory and inclusive.The SHG leaders are selected democratically who lead the whole process including managing necessary group documentation, collecting savings, depositing savings to banks, issuing loan to members, facilitating meetings & discussions on social, health, hygiene, rights and protection issues and defining course of action.
IRB helped forming the ‘apex body’ to institutionalize the SHG model for the sustainability of the SHGs as well as for the sustainable development of the project beneficiaries.This ‘apex body’ is maintaining all processes and policies of the cooperative department of Bangladesh government. As the ‘apex body’ is registered with the government’s local co-operative department, ithas overall coordination and management responsibilities to support the SHGs of the project.The ‘apex body’ initiateddifferent I-MF products and services among the SHG members.Islamic Shariah-based interest-free SHG-led revolving fund management are facilitated by the project with a view to promoting individual/group business instead of earning interests from banks.
SHG members have risk fund now. The ‘apex body’ have overall responsibility to manage and utilize the risk fund. The risk fund is governed by maintaining Islamic Shariah insurance product Takaful system. In the Takafulstructure, the members jointly agree to guarantee one another against any unexpected loss or damage based on the common pool of resources. A simple procedure is being maintained to operate the risk fund. This risk fund is an important I-MFl tool for the SHG members to get back from any kind of hazards.
The project is strongly functioning of ‘Islamic microfiance working group’. This working group has been initiating different activities to develop Islamic microfiance in Bangladesh. IRB has the leading role in effectively operating this working group. A variety of Islamic Shariah scholars, Islamic banks, IMFIs, apex bodies, NGOs, practitioners and academics are the active members of this working group.This working group iscollectively taking different actions such as product development, maping of the I-MFIs, capacity development initiatives for skilled human resource development, developinglocal resource mobilization mechanism etc., and these initiatives have got tremendous response within microfinance sector in Bangladesh.
A study on Islamic microfinance was commissioned as part of strengthening I-MF; The purpose of the study on Islamic Microfinance through Local NGO/MFIs is to identify the prospect of promoting I-MF through NGOs, MFIs and to identify the gaps and how these gaps can be minimized to attract Islamic Banks to invest in I-MF through NGOs/MFIs.
IRB’s ultimate PPA objective of establishing a sustainable I-MFI will still be pursued;it is being delayed as the Bangladesh Microfinance Authority is not providing a new license now. IRB will continue its efforts to get the microfinance business license.
Other development actors are changing strategies and programmes as a result of IRB’s influence and increased knowledge & awareness of Islamic perspectives on microfinance, conflict, climate change, gender and child protection. MFIs, I-MFIs, NGOs and development partners are well aware of Islamic microfinance and are being encouraged in promoting I-MF through increasing knowledge, awareness and promotional activities. Policy makers are influenced in creating I-MF act/policy with the conventional microfinance act/policy for widening microfinance inclusion though Islamic Shariah-based financial system.
B: PERFORMANCE(maximum 3 pages: approx ½ page for each principle – with a max. of 1 page per principle)
Principle 1 / Consolidation of current PPA/SGA work to contribute towards the new Sustainable Development Goals (SDGs)Key result
Key result
Key result
Risk: / Minor/Moderate/Major/Severe / Impact weighting (%):
Key Points - Summary of progress during the nine month extension
Please provide a short narrative to explain progress towards targets, highlighting key achievements, lesson learning by the agency, and accounting for slippage and/or exceptional performance. development, with consideration of sustainability.]
During this reporting period IRB has been continuing its regular activities to consolidate and strengthen the achievements already gained in it expected result.
The project has achieved substantial results so far in terms of socio-economic and resource profile of the project beneficiaries through SHG approach by initiating community-led Islamic microfinance product and services. More orientation and follow up for SHG as well as its Apex Body has been done during this period to ensure that women participation in decision making process and their mobility remain increased. The project provided various capacity-building supports to the SHGs-leadership development, financial management, resources mobilization, documentation, rights etc in this period.The risk fund has been turend into Takaful Insurance structure, the members jointly agree to guarantee one another against any unexpected loss or damage.
The activities of ‘Islamic microfiance working group’ has been increased. The group has initiating different activities to develop Islamic microfiance in Bangladesh.This working group is collectively taking different actions such as product development, maping of the I-MFIs, capacity development initiatives for skilled human resource development, developinglocal resource mobilization mechanism etc., and these initiatives have got tremendous response within microfinance sector in Bangladesh.
IRB’s effort to create a locally registered I-MFI is still under processing. it is being delayed as the Bangladesh Microfinance Authority is not providing a new license now. IRB will continue its efforts to get the microfinance business license.
IRB continuesits works with MFIs, I-MFIs, NGOs, development partners, Islamic commercial Banksand other actors to encourage them for the promotion of I-MF through increasing knowledge, awareness and promotional activities.
During this period IRB has given more focus on policy influence in creating I-MF act/policy with the conventional microfinance act/policy for widening microfinance inclusion though Islamic Shariah-based financial system.
Principle 2 / Organisational effectivenessKey result
Key result
Key result
Risk: / Minor/Moderate/Major/Severe / Impact weighting (%):
Key Points - Summary of progress during the nine month extension
Please provide a short narrative to explain progress towards targets, highlighting key achievements, lesson learning by the agency, and accounting for slippage and/or exceptional performance.
The PPA funding provides an opportunity to strengthen organisational and programme capacities. The project captures key learnings throughout the project duration. Systematic sessions are organized such as lesson learning sessions,on-going review process, staff meetings, mid-term review etc. for capturing the key learnings of the project. This kind of participatory action is highly effective for building a deeper understanding of Islamic microfiance in Bangladesh. Islamic microfinance is a potential sector both in rural and urban areas of Bangladesh since it is not common in Bangladesh.Hundredsof MFIs/NGOs are delivering conventional microfinance services to their beneficiaries. But there is an enormous scope and opportunity for financial inclusion with I-MF products and services. SHG model can be a low-cost and effective option for I-MF operations and it creates the ownership for the beneficiariesfor the fund,and for that they become active in SHG activities to manage the revolving fund for better economic position.
IRB’s effort to create a locally registered I-MFIin Bangladesh for providing a demonstration model of Islamic microfinance through institutional approachwill give added values of the organization.
“Islamic microfiance working group” is a new initiation of this project to develop and expand Islamic microfiance in Bangladesh.This tremendation initiative is working on various issues to sustainably develop Islamic microfiance in Bangladesh.
Princple 3 / Diversification and innovationNoriba’ website development for fund generation and distribution
IntroducedTakaful model microinsurance in all SHGs
Risk: / Minor/Moderate/Major/Severe / Impact weighting (%):
Key Points - Summary of progress during the nine month extension
Please provide a short narrative to explain progress towards targets, highlighting key achievements, lesson learning by the agency, and accounting for slippage and/or exceptional performance.
Introducing Micro Takaful system amongst SHG members is a new innovation of this project. All the project members who are also the SHG members are the participants of Islamic Shariah insurance product Takaful system. In the Takaful structure, the members jointly agree to guarantee one another against any unexpected loss or damage based on the common pool of resources. A simple procedure is being maintained to operate the risk fund. This risk fund is an important I-MFl tool for the SHG members to get back from any kind of hazards. Wakalah model was adopted as an operational method and the Apex body is responsible for operating this takaful model. A booklet has ben developed containing operational procedure of this scheme and every SHG will keep a copy of this booklet. A study of microtakaful adopted by the SHG members will soon be revealed and will share with relevant stakeholder as well as the policy makers.
Developing ‘noriba’ website is a innovation of this project. Noriba is a flexible fundraising platform linking individual donors, businessmen and other generous people to help the poor and needy women entrepreneurs to start / increase their businesses through Noriba web-based platform. It's a perpetual communication channel between individual donors and the poor & vulnerable people. IRB has established the Noriba website, and making it popular through media advertisement, marketing and reaching rich people across the country. Each month IRB receives and posts hundreds of profiles on the Noriba website. A team is working to post the profiles of poor and vulnerable people who have potentials to start business or improve business with soft credit support ( Qard-al-Hasana), and the ultra poor households for Zakat/ donation to start income generating activities (IGA).
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