More than one-third of Bangladesh’s population lives below the poverty line. Of those, an estimated 28 million Bangladeshis suffer from extreme poverty, surviving on daily incomes of US$1.25 or less. And because those living in extreme poverty typically lack productive assets, regular income, collateral, and financial literacy, they are usually excluded from the safe and affordable financial services that could help them build more stable lives. People stay trapped in extreme poverty because they cannot access financial services—and they cannot access financial services because they are extremely poor. Concern Worldwide is working to break that vicious cycle.
Supported by MetLife Foundation, Concern has partnered with Friends in Village Development Bangladesh to transform the lives of 700 extremely poor families. One of them is the family of Noor-un-Nahar. Today, Noor is a successful grocer. But not too long ago, she could hardly afford two meals a day for her daughters. Noor had been trying to run a roadside grocery stall, and she worked hard. But she could never turn a profit due to lack of operating capital, and the store failed.
In January 2015, the partnership of Concern and Friends of Village Development Bangladesh launched the “Graduation of Extreme Poor Engaging in Business and Finance” project. Targeting families without arable land or productive assets, the project focuses on building the skills and savings habits of participants. It provides grants for setting up microenterprises and then connects participants with formal microfinance institutions that can provide operating capital once a microenterprise is a going concern.
Noor was selected for the “Graduation” project in July 2015. With business management training and a grant of 7,500 taka (approximately US$95), she was able to launch a new grocery and stock it with profitable items. And because of her prior experience as a grocer, Noor’s new business began to thrive. “Before long, I was saving [$US0.60] and a handful of rice every [two weeks],” Noor says.
Noor’s village lies in north-eastern Bangladesh’s wetlands. Opportunities for livelihoods and access to markets are limited due to the region’s remoteness and its poor infrastructure. While the elites restrict the poor’s farming and fishing rights, social protections and investment for development, whether from the government or from aid agencies, remain scarce. So her new microenterprise was a significant opportunity for Noor and her family, marking a turning point in their lives.
Today she clears about US$165 in profits every month. It is enough to provide nutritious meals for her family and to pay for her daughters’ education. Noor has also accumulated assets worth approximately US$367, more than tripling the value of her initial startup grant. In June 2016, she will be among the first of the “Graduation” participants to qualify for a microfinance loan. If she decides to apply for a loan of US$190, she will repay it in weekly installments of US$5 for 52 weeks. Regardless whether she ultimately decides to borrow expansion capital, Noor is committed to the success of her venture, reporting that she wants to expand and diversify so that she can build more savings.
Extreme poverty is a complex phenomenon, with multiple interrelated causes, that defies easy solutions. But an integrated approach that combines grants, business development training, an emphasis on savings and access to finance holds real promise. Concern and Friends of Village Development Bangladesh want to see Noor and her fellow participants move out of extreme poverty by December 2017. Most importantly, the goal is to stay out of poverty through sustainable income and the cushion of sufficient savings.
Concern Worldwide is an international humanitarian organisation dedicated to tackling poverty and suffering in the world’s poorest countries. Concern works in partnership with the very poorest people in these countries, directly enabling them to improve their lives, as well as using Concern’s knowledge and experience to influence decisions made at a local, national and international level that can significantly reduce extreme poverty.