islamic microfinance - irti.org · while, total islamic microfinance clients in the world is about...
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Islamic Microfinance:Bangladesh Experience
Mohammad Abdul MannanManaging Director & CEO
Islami Bank Bangladesh Limited
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Demography &
Area : 147,570 km2
Population : 168.9 million
Literacy : 61.5%
GDP : $ 205.3 billion (44th)
Per Capita : $ 1,314
Inflation (PP/Average) : 5.65% /6.10%
Reserve : $ 27.5 billion
Export : $ 31.6 billion
Import : $ 43.2 billion
Foreign Remittance : $ 15.3 billion
Next 11 emerging economy
Gained the status of Lower middle income country
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Banking Sector
• State owned Banks : 5
• Specialized Banks : 3
• Foreign Banks : 9
• Private Banks : 39 (Islamic Banks-8)
(Conventional Banks-31)• Total Banks : 56
• Branches : 9263
• Manpower : 160,000+
• Total Deposits :$100 billion
• Total Credits :$87.7billion
• Number of Deposit Accounts : 76.80 million
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Islamic Banking in Bangladesh
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• Full Fledged Islamic Banks : 8
• Islamic Banking Branches : 19
• Islamic Banking Windows : 25
• Number of Branches : 960
• Deposit : $20.8 billion
• Investment : $18.8 billion
• Manpower : 27837
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• Bangladesh-the birthplace & hub of microfinance
• Grameen model by Noble Laureate Prof. Dr. Md. Yunus Started in 1983
• Microfinance inroads in finance landscape of country
Features:
• General Credit program
• Group based approach/ membership system
• Centre based arrangement
• Individual Savings
• Insurance coverage
Microfinance in Bangladesh
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No. of MFIs : around 2100
Clients : 30 million
Loan Portfolio : US$ 5.5 billion
Loan Portfolio Growth : 15%
Recovery Rate : around 96%
Savings : US$ 4.1 billion
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Microfinance Activities in Bangladesh
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Sl. Name of MFIEstablis
hmentInvestment Share Savings Share
1 Grameen Bank 1976 1,234.92 23% 2,427.38 60%
2 BRAC 1974 1,436.60 26% 515.46 13%
3 ASA 1992 1,284.46 23% 568.54 14%
4 RDS (IBBL) 1995 265.00 5% 87.77 2%
5 BURO BD 1990 249.06 5% 79.36 2%
6 TMSS 1980 177.11 3% 58.01 1%
7SSS(Society for social service)
1986 110.18 2% 52.54 1%
8 UDDIPON 1984 76.61 1% 30.81 1%
9 Others (MFIs) - 649.08 12% 233.37 6%
10National position
- 5,483.01 100% 4,053.24 100%
Market Share of Microfinance in Bangladesh
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While, total Islamic Microfinance clients in the world is about 1
million. More than Half of them is in Bangladesh and over 80
percent of them is concentrated in Indonesia, Bangladesh and
Afghanistan. Islamic Microfinance in Bangladesh is mostly
operated by-----
• IBBL’s Rural Development Scheme(RDS), founded in 1995
• SIBL, Al-Arafah
• Muslim Aid Bangladesh operating since (1991)
• Al Falah A’am Umayan Sangasta(AFAUS), Dinajpur in 1989
• TMSS Islamic Microfinance (TIMF) started in 2008
• RESCUE started operation in 1991 in Rangpur district
• Noble Foundation and Literary society, Bogra.
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Islamic Microfinance
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Islamic Microfinance: RDS Model
IBBL’s Rural Development Scheme(RDS), founded in 1995
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IBBL: At a Glance
Asset Size : USD 9,294 Million
Branches : 304+
Manpower : 13622
Market Share
Import :11%
Export :10%
Remittance :27%
SME : 17%
Employment generation : 2.5 million people
Highest Taxpayer in Banking sector
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Industry : 32.36%
Trade : 35.98%
Real Estate : 8.35%
Agri. & Agro Industry :11.99%
Micro Credit(RDS) : 3.64%
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Sector-wise Business Exposure
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Share of IBBL in country’s Microfinance
Source: Credit Development Forum
Share of IBBL's Microfinance to PCBs 52.05%
Share of IBBL to SCBs & PCBs 25.85%
Share of IBBL to PCBs Retail microfinance 98.90%
IBBL share in country microfinance through banking
& public institutes8.05%
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Launched in : 1995
Mode of Finance : Baim, HPSM & Musharaka
Investment Size : US$ 145 – US$ 714
Male Members : 15%
Female Members : 85%
Rate of Recovery : 99%
RDS model of IBBL
IBBL covers 50% world Islamic microfinance
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Particulars 2015 National Rank
No of Village 18,615
7th
position
among
2100
MFIs
of the
Country
No. of Member 9,47,305
Cumulative Disbursement (Million BDT)
(Million USD)
130445.12
$310
Outstanding (Million BDT)
(Million USD)
20798.82
$264
Share in IBBl’s to total investment 3.64%
Members Savings (Million BDT)
(Million USD)
6,890
$87.77
Key Information on RDS
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Shariah based micro-finance
Collateral free
Farming and off-farming activities
Job Creation
Welfare and ethical services
Quard facilitates for sanitation
Lowest profit rates
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RDS: Special Features
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Farmers
Sharecroppers
Persons engaged in off-farm activities
Fishermen
Women and distressed people
Target Group
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0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015
23 30 42 5
8 73 8
8
6590
132
175
221
265
Savings Investment
Trends of Savings and Investments(Million US$)
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10751 11482
12857
15371
17163
18086
18615
10000
11000
12000
13000
14000
15000
16000
17000
18000
19000
20000
2009 2010 2011 2012 2013 2014 2015
RDS Expansion: Village coverage
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3,3
35
74,3
15 217,4
25
523,9
41
560,4
99 733520
836227
911470 9,4
7,3
05
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1996 2000 2005 2010 2011 2012 2013 2014 15-Jun2015
Increase of Members
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Crops, 24%
Nursery/Forestry, 1%
Agricultural Equipment, 2%
Livestock, 10%
Poultry/Bird, 1%
Fisheries, 4%Rural Transport,
5%
Rural Housing, 15%
Off-farm Activities, 37%
Others, 1%
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RDS: Sector-wise Investment
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Size-wise Investment:
Fig. taka in million
41%
34%
13%
9%3%
Upto $190
$191 to 380
$381 to 640
$641 to 1275
$1276 to above
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Graduation RDS to MEIS and SME
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IBBL follows a Finance Plus Approach
Finance
IBBL’s Integrated Approaches to Financial Inclusion
Health
Education
Nutrition
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IBBL’s Integrated Approach to Microfinance and Financial Inclusion (RDS & UPDS
Model)
RDS
Financial Inclusion
Micro-Investment
(Upto Tk. 75,000)
Micro-Enterprise(Upto Tk. 400,00)
Ultra-Poor (Financed
through Qard coming from charity fund)
Social Inclusion
Education
- Pre-primary
- Maqtab
- Adult Education
- Award & Scholarship
Training
Health Service
- Medical Camp
- Circumcision Camp
-Medical Assistance
-Welfare Gift
-Qard for housing, sanitation & Tube well
Relief & Rehabilitation
Environment
CSRUPDS
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RDS Graduation Process
25
Tk.75,000
($1000)
↑
↑
Tk.5000
($65)
MEIS Investment Size
$1000 - $5000
Collateral Free
Investment
◊ Graduated from RDS
◊ Stay at least 3 years
Inve
stm
en
t
Siz
e
◊ Investment with Collateral
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Qard Program for RDS
USD$ 12.74 million (Tk.100 crore) fund creation
-Qard for distressed members & the ultra poor -Revolving basis -Qard for 1(one) year
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Non-Financial Services(Welfare activities)
• Training for the beneficiaries and centre leaders;
• Health awareness development program;
• Relief Distribution Program
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• Sanitation program;
• Treatment assistance for the poor members;
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Non-Financial Services(Welfare activities)
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Non-Financial Services (Welfare activities)
• Education program
• Scholarship Award Program
• Distribution of education materials
• Waiver of the liabilities of incapable members;
• Plantation program
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• Extending RDS activities to all the 86,000 villages of the country.
• Addressing the ultra poor by developing Quard/Charitable Fund.
• Extensive investment in SME sector in the rural areas in view to
create huge employment.
• Encouraging bio-gas and solar panel in the rural house-holds.
continued--
----
Future Plan
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• Ensuring zero level drop-out of the children of RDS members from primary education.
• Attaining 100% coverage of the beneficiaries in respect of pure drinking water and sanitation.
• Ensuring health safety-net of RDS beneficiaries.
• Extending massive plantation especially in the coastal areas.
• Alleviate poverty from the country
Future Plan
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