Rural Housing Project

Snap Shot: Funded by : Grihayan Tohobil Government of Bangladesh; Geographical Location: Comilla and Kurigram District

Objective: (1) Rehabilitation and resettlement of the victims from disasters and/or shelter less which is the highest concern of Bangladesh. (2)  The broader objective of the Project is to provide low cost housing loan to the disaster victims and shelter less ultra poor people.

AID-COMILLA’S strategy for the empowerment of the poor is not possible without reducing their vulnerability due to housing problems. A well organized housing program assisting the poor to build durable, sturdy, low cost, environment-friendly dwelling houses is implemented by AID-COMILLA.  This package comes with sanitary facilities through the provision of credit and technical assistance can make significant contribution, thus enhance the reduction of vulnerability and enhance empowerment of the poor.

Nature of the Project: This is a long-term loan for low cost house construction.  The house is estimated to be 220 sq. ft. per unit with Corrugated Iron Sheet on the roof, RCC pillar and Bamboo Fencing.  The loan amount amounts to maximum of BDT 70,000 per unit and refundable within ten years in equal instalment after six months of receiving the loan.  Rate of interest will be 5% flat rate.

Benefit: To date, 308 homeless families have been provided with good quality shelter facilities together with their family in a friendly and safe environment.

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Human Rights

Access to Justice for All through Arbitration

Snap Shot: Duration : Unlimited; Funded by : Own Fund from Micro Credit Income as Social Responsibility ; Geographical Location : Comilla District

Development Contest: The Universal Declaration of Human Rights states, “Everyone has the right to recognition everywhere as a person before the law.  This right is, however, only realisable if everyone has access to justice.  Human rights norms and standards dictate that all persons, irrespective of any characteristic that may define their location or standing in society, are equal before the law, i.e. all are equal before the courts and tribunals and enjoy certain procedural guarantees in civil and criminal trials. Equality before the courts means, in particular, that all persons must be granted a right of equal access to an independent and impartial court or tribunal for the determination of civil disputes or criminal charges without discrimination.  The most important procedural guarantee in both civil and criminal proceedings is the right to a fair hearing. Access to justice refers to people’s ability to use justice services.  Equal access means that such ability is not limited or restricted to certain social classes or groups.  It becomes an issue when that access is restricted, in particular, for the poor, women, children, indigenous peoples or other marginalised or disadvantaged groups.  The development challenge is to ensure equitable access to justice, which is not differentiated by gender, ethnicity, political affiliation, religious belief, social or economic class, age, or physical incapacity or any other marker of identity.  Equal access to justice also includes the prompt and impartial response of the justice institutions.

Various types of violence are happened in Bangladesh including Comilla everyday lives of women such as rape, fatwa, wife beating, sexual harassment, family violence, Dowry, child trafficking, women trafficking, acid throwing, burn, ransom. The Upazilas under the proposed project is the high risk area of violence against women. Always the women are the victim of fatwa by the Mullahs.  In ever cases violence against women somehow the Mullahs becomes involved and they arrange Shalish (An informal, traditional system of mediation used to settle marital and land disputes outside the court). In most of the shalish (An informal, traditional system of mediation used to settle marital and land disputes outside the court) the women are not getting the right justice. In the proposed working area the victim of violence has been totally misconceived and is used by half educated village mullahs (clerics) who actually are not scholars in Islam. This Mullah’s through the informal village justice system (shalish), an informal, traditional system of mediation used to settle marital and land disputes outside the court) punishes women for so-called anti-social or immoral activities. In almost all the cases women are brought before the shalish (An informal, traditional system of mediation used to settle marital and land disputes outside the court) simply for their involvement in extra marital affairs, marrying a man from different religion, giving birth to a child before marriage, complications due to oral divorce pronounced to a woman by her husband and so on. Although these punishments are not legal, because the Mullah’s exerts considerable autonomy and power in the rural areas, the punishments are generally carried out against the helpless women. People for lack of knowledge about the law and religion, poor education and absence of social awareness are the key factors, which allow fatwa to be issues. Punishment awarded by a fatwa is variable but include awarding hilla (Intervening marriage often imposed in cases where the husband orally divorces the wife repents later and wants to take her back. Although in practice in some places, it has no legal basis in law in Bangladesh.) to another man, punishing with lashes, social boycott, stoning, divorce, and physical violence.

Why Arbitration: Arbitration is an alternative to resolving disputes in court.  The arbitration process allows the parties to select an individual or several individuals with a specialized expertise in the subject matter of the dispute to listen to the evidence and render a binding decision. Usually, an arbitration panel consists of three members, called a tripartite panel, one of which is designated as the chairperson of the panel or chief arbitrator.  In civil litigation a judge is randomly assigned to hear a particular case and may not have the necessary substantive or technical expertise to appreciate fully the intricacies of legal counsel’s arguments or have a comprehensive knowledge of the construction matters in dispute.  Also, the large volume of court caseloads sometimes results in substantial delays in processing individual cases.  Many judges are mandating mediation and/or arbitration prior to the beginning of actual court proceedings with the expectation that the case will be settled and the court litigation process will be avoided. If the parties to an agreement to arbitrate agree to a method for appointing an arbitrator, that method must be followed unless the method fails.  If the parties have not agreed on a method, the agreed method fails or an arbitrator appointed fails or is unable to act and a successor has not been appointed, the court, on motion of a party to the arbitration proceeding, shall appoint the arbitrator.  An arbitrator so appointed has all the powers of an arbitrator designated in the agreement to arbitrate or appointed pursuant to the agreed method. An arbitrator may conduct arbitration in such manner as the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding.  The authority conferred upon the arbitrator includes the power to hold conferences with the parties to the arbitration proceeding before the hearing and, among other matters, determine the admissibility, relevance, materiality and weight of any evidence. 

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Training and Resource Development Center

Training and Resource Development Centre at Comilla

Snap Shot: Funded by:  Embassy of Japan, Dhaka, Bangladesh  and AID-COMILLA own Fund; Location: Plot # 8, Mouza : Roghupur,Union: Jagannathpur,  Upazila: Sadar, District: Comilla, Bangladesh

Present Status: The Training centre is being used by the local NGOs, International NGOs, Community people as well as AID-COMILLA itself. The occupancy rate of the training centre is 97%. The staff salary, maintenance, electricity, water, gas and other cost are borne from its income. The centre is self supporting.

Objectives: To promote massive awareness on environmental hazards and unjust social issues among leaders of grassroots poor development catalyst, non-government organizations (NGOs), Governmental personnel through training, workshop, and seminars using good quality and effective training environment such as the Training and Resource Development Center.  

Current Facilities: We have the following facilities at our residential training center located at Sadar Upazila, Comilla 1) Guest Room without AC-05; 2) Accommodation for participants-32 (3 bad in each room) ; 3) Class Room for 60 participants; 4) Discussion Room for 30 participants-01; 5) Library-01; 6) Dining Room-01 (60 participants at a time);  6) 24 hours electricity ; 7) Multi Media-1; 8) Recreation facility for participants; 9) Computer Service . Total Floor Area: 5,000 square feet for training center.

Total Floor Area 12,000 square feet: Training Centre 5,000 square feet, Office space for AID-COMILLA  7,000  square feet

Effects: (a) Every year AID-COMILLA’s 4000 partner group members/leaders, 500 other stakeholders and 2000 participants of the other NGOs effectively trained on poverty alleviation and environmental issue and they all act upon it  (b) Partner group members of AID-COMILLA practice Integrated Pest Management (IPM) in Rice and vegetable cultivation, create gender awareness, initiate vegetable gardening, plant trees, culture fish, make profit and create employment/self employment out of micro credit, form strong micro-institution at village level and group federation at union level.  (c) The Project is expected to directly benefit 6,500 people per year and indirectly benefit 30,000 per year.

Future Perspectives: AID-COMILLA has approximately, a total of 30,000 Project participants.  Thus, it is expected that the Training and Resource Development Center shall be serving such huge number or even more as it will open its services to other partner NGOs and their beneficiaries.  AID-COMILLA has already accommodated grassroots partners in its Training Center for conducting large group meetings and training.  It is expected that more training courses and other capacity building activities shall be conducted on a yearly basis, which shall maximize the use of the Training Center, thereby maximizing its benefits as a result.  

Training Courses Offered by AID-COMILLA:

AID Comilla offers training courses on Integrated Pest Management, Leaf Color Chart, Rodent Management, Livestock rearing & production, Vegetable Cultivation, Credit Union Formation, Aquaculture, Gender Relations, Good Governance, Human Rights & Legal Awareness, etc.Our Clients: Social Marketing Company (SMC) Dhaka University, BRAC, Plan-Bangladesh, Grameen Shakti, DISA, Novarties, Rahim Afroz, Syngenta, National Polimar, Atlas Bangladesh, Local NGOs, etc.

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Promoting Peace and Justice

Promoting Peace & Justice (PPJ) Cumilla, Kurigram & Lakshmipur

Snap Shot: Funded by : Democracy International –USA (USAID’ PPJ Activity) ; Project Period : May 2019 to April 2021, ; Geographical Location : Cumilla District (5 Upazila, 42 UP), Kurigram District (5 Upazila, 41 UP), Lakshmipur District (5 Upazila, 55 UP)

Background and Justification : Legal aid–a means to promote access to justice–still remains a far cry for the citizens of Bangladesh, especially for women. Bangladesh’s formal justice system remains relatively inaccessible for the vast majority of the public. Vulnerable groups, including women and children, ethnic minorities, the poor, and people with disabilities face particular difficulty in accessing timely and affordable justice. The lack of access to justice and basic justice for all is a defining characteristic of human poverty. In Bangladesh, despite impressive achievements towards a number of Millennium Development Goals, it is widely acknowledged that many continue to suffer from challenges against the rule of law, limited justice options, as well as the lack of knowledge and protection of justice for all. Legal aid is the assistance given to people otherwise unable to afford legal representation or access to the court. It is neither charity nor mercy, it is a right of the poor and underprivileged section of the society.  Article 27 of the Constitution of the People’s Republic of Bangladesh guarantees that “all citizens are equal before law and are entitled to equal protection of law.” Despite such provisions, many people are deprived of their constitutional rights to access justice due to poverty. The state legal Aid Program is administered within the legal framework of the Legal Aid Services Act, 2000 (LASA). In terms of LASA, National Legal Aid Services Organization (NLASO) has been established by the government. NLASO is a statutory body working under Ministry of Law, Justice & Parliamentary Affairs to adopt policies and principles for making legal services available under the Act. NLASO is responsible for implementing government legal aid across the country. Management authority of NLASO is vested in a National Board of Management chaired by the minister, Ministry of Law, Justice & Parliamentary Affairs.

Peace and Justice in Bangladesh is mediated by expensive, time consuming and complex procedures in the legal system. Most vulnerable groups in society are disadvantaged in using the formal justice system because of poverty and lack of knowledge. In other words, barriers to access to justice are both external in that they are located in the structure and culture of institutions and entities that are entrusted with the delivery of justice as well as intrinsic to the circumstances of individuals seeking justice.

Access to justice has been defined by UNDP as the “ability of people from disadvantaged groups to prevent and overcome human poverty by seeking and obtaining a remedy, through the justice system, for grievance in accordance with human rights principles and standards” UNDP promotes a two-fold mission in this area; (i) to secure that the law, irrespective of wealth, race or creed, treats all men and women equally, and (ii) to secure that all, including the poorest and those without skills, knowledge or resources of their own, have access to and trust in law and the legal system. People who are poor or belong to socially disadvantaged groups are particularly vulnerable to human rights violations and abuses by both state and non-state actors. The most important defence they can have against such abuses is the protection that the justice system can offer. Poor and socially disadvantaged people usually lack the capability to obtain court protection for a number of reasons, not least because of the high costs involved. Even when provision for free legal aid exists, they may lack the necessary information and self-confidence to seek redress through the courts. Thus, States have a positive obligation to facilitate the access of poor people to courts, tribunals and other dispute resolution mechanisms as a remedy against human rights violations.

According to High Court, there is more than 500,000 case for trial in their hands for judgment and it will take 30 years if they do not allow a single case further (Source: Daily Ittefaq, February 1, 2019 , front page news article). Weak court performance which derives from a poorly capacitated and outdated court case management system as well as poorly trained judges in lower courts and inadequate number of judicial staff. In general the system is characterised by weak court administration; including poor case management and a poor filing system. The judicial system is apparently insensitive to gender, poverty and human rights. There is weak oversight and guidance by higher judicial institutions. The system faces interference and manipulation aggravated by the judiciary being subject to executive control and administration. Public prosecution services suffer because of insufficient evidence and lack of independence. Disadvantaged groups, especially women, children and indigenous peoples, have limited access to government legal assistance funds. Procedures for obtaining these funds are cumbersome and the information about the existence of these funds is also not widely known. Moreover the government provision is limited and cannot possibly meet the needs of the poor and disadvantaged.

The mandate of NLASO is to provide legal aid services especially for the poor free of cost. Our experience shows that some of the UZLAC & UPLAC was not formed even the Union Parishad Chairman /Members are not well aware about the National Legal Aid Act-2000 and the role of UPLAC in Cumilla, Laxmipur & Kurigram District. Main risk and challenges of the project is making active UZLAC and UPLAC. By providing training and awareness to the both committee is the way to mitigation of the risk and challenges.

Results, outputs and outcomes, and Impact

Results:

  • Justice for rural poor women, men, adolescents and children ensured ;
  • People’s confidence in government institutions of Bangladesh – especially on judicial institutions improved
  • Access and Referral system and services for poor and marginalized people especially for women and children improved
  • Government legal aid service delivery efficiency, visibility and use at local level improved to ensure justice for citizens living in the project area
  • Collaboration and networks of government judicial departments with different organization, institutions and other stakeholders enhanced and gender friendly laws improved.

Outputs and Outcomes, and Impact:

  • Early marriage, dowry, trafficking and domestic violence reduced by 40%.
  • Poor and marginalized people seeks justice from Legal Aid Committees at Union/Upazila /District levels without any fear by 50%
  • Poor and marginalized people especially for women and children gained easy access to Union Legal Aid Committees and their unresolved cases are referred to District Legal Aid Committee (DALC) through UZLAC or directly by 30%
  • Legal Aid Committees at Union/Upazila /District levels became pro-active and friendly to poor and marginalized people with successful mediation by 50%.
  • Increased participation in local govt. power structure by 20% (Union Parishad, CSOs, CBOs, religious committee, legal aid committee)

Activities:
1) Festoon / Banner on govt. legal aid ; 2) Digital Sign Board ; 3) Printing of posters; 4) Reprint of NLASO Law book printing; 5) Note Book Printing  ; 6) Folder Printing  ; 7) Leaflets distribution during Miking Campaign at community level; 8) Sticker Printing; 9) Bill Board Fixation; 10) Miking campaign at community level covered all villages under 02 Unions at a time; 11) Folk Song , at Upazila; 12) Rickshow Plate fixing behind the Rickshow; 13) Half yearly meeting in between DLAC, UZLAC, UPLAC; 14) Orientation for UZLAC members at Upazila level; 15) Orientation for UPLAC members at Union level; 16) Sensitization session for DLAC including issue areas such as TIP, GBV, VE etc. at District HQ; 17) Sensitization session for UZLAC including issue areas such as TIP, GBV, VE etc.; 18) Public hearing event; 19) School Debate; 20) Observation of National Legal Aid Day on April 28 at District and Upazila level; 21) Facilitation of bi-monthly Union Legal Aid Committee (UPLAC) meeting  at Union level for; 22) Facilitation of bi-monthly Upazila Legal Aid Committee (UZLAC) meeting at Upazila level; 23) Quarterly  Fund for DLAC; 24) Courtyard meeting at ward level involving all citizens (male, female) ; 25) Printing of various forms for DLAC, UZLAC & UPLAC

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IDR-2 Project

Building Preparedness of Vulnerable Communities through Inclusive Disaster Risk Reduction Initiatives

Snap Shot: Funded by : HelpAge International ; Project Period     : July 2017 to March 2020, ; Geographical Location : Kurigram District, Rowmari Upazila

Desired Impact: The goal of the project is to contribute to preparing communities to better withstand reoccurring natural disasters. The project will build on learning from the existing project to focus on basic disaster preparedness techniques as well as encouraging community structures and livelihoods which contribute to building disaster ready communities. In doing so communities will be able to better anticipate, respond to and recover from the negative impact of recurrent natural hazards.

Outcomes, Objectives and Activities: High-level summary of progress made toward achieving the overall outcome(s) of the project during the reporting period.

Outcome 1: The capacity of 104 targeted communities including older women and men and people with disabilities have been strengthened to reduce the negative impact of disasters caused by natural hazards ensuring their capacities and needs are reflected and addressed in disaster prepared livelihoods, inclusive disaster risk reduction plans, and disaster response actions in Bangladesh by the end of the project. The project has been able to develop or re-establish 24 OP inclusive Community Disaster Management Committees (CDMC), 2 Union Disaster Management Committee (UDMC), in Bangladesh. These local bodies are inclusive and have representation from all religion, castes, ethnic group or vulnerable groups, present in the community. These committees are organizing monthly meetings on a regular basis with a clear agenda, and also documenting the minutes of meeting. Most of them have conducted or revised the PVCA and has also prepared the risk reduction plans. They are submitted to the local government for endorsement. The local government has taken up activities from the previously developed plan and also completed few of them. Government in Nepal provides DRR fund for use during emergencies on annual basis which is a good recognition of the committees created. Sub-committees have been formed on early warning system, search and rescue and first aid in both the countries, as per the government guidelines. For provision of OP inclusive disaster preparedness and response materials, Bangladesh team has identified 356 most vulnerable older people whose vulnerability can be reduced by provision of aid-assistive devices. About 3,000 OP have been able to benefit through livelihood seed grants and strengthen their livelihoods. The activities for further strengthening the committees and training of sub-committees is planned in the second year of the project.

Outcome 2: Humanitarian actors including local, national and international NGOs, UN agencies, government and donors have knowledge, capacity and appropriate tools and plans to ensure age inclusive humanitarian responses in Bangladesh and Nepal by end of project. A google survey of likeminded and humanitarian orgnizations (both at local and country level) is planned to be conducted to understand current understanding of the organization and their interest in age and disability inclusion. The questionnaires in both the countries have been finalized and are expected to be launched in August 2018. Based on the results of the survey, the organizations will be asked to nominate a focal person in organization. A training of inclusion standards will be organized in September 2018 in Bangladesh; and in October 2018 in Nepal. Following the completion of these trainings, we expect about 25 percent participants to prepare a personal/organisational action plan, which will then be given specific technical assistance on age and disability-inclusive CBDRM planning. HelpAge local partners in Nepal have implemented HOPE trainings at local level for awareness of stakeholders on inclusion and they also plan to implement trainings on inclusion standards also in November and December 2018.

Outcome 3: Disaster affected older women and men meet their age inclusive crucial needs, and also reduce lives lost by lower profile South Asian natural disasters during the project period. During the project period, four emergencies have been responded through REF, two in Bangladesh and two in SriLanka. Through REF, HelpAge has been able to provide initial response for floods, landslides and severe cold wave. The fund mobilized for the four emergency responses is USD 73,049 which has benefited 15,282 older people and their family members directly with provision of cash grants, blankets, drinking water, non-food items, supplementary food, and outreach health services. The beneficiaries for ongoing SriLanka response are not yet reported as HelpAge is still responding to the emergency. To set a good example on data collection and its use during emergencies, HelpAge in Bangladesh responded to emergencies in the areas of MACF project presence. The targeted older people households have been selected from the list which was prepared during the PVCA exercise conducted in the target communities under MACF IDR phase-1. This helped in quick identification of target beneficiaries and helped in timely response to the emergencies.

Outcome 4: Knowledge management and systematic learning and sharing of age and gender Inclusive Community Based Disaster Risk Reduction (CBDRR) has been improved for ensuring better quality of CBDRR programming within HelpAge and its network Under this outcome, HelpAge is working on development of age-inclusive DRR strategy. The focus is on digging down to the specific actions needed for older people in disaster mitigation, preparedness and response.

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Combat Child Marriage through Massive Awareness

Coordinated Effort to Combat Child Marriage through Massive Awareness

Snap Shot: Duration : January 2020 to August 2020; Funded by : Winrock-International-USA  ;  Geographical Location : Chapainowabgonj, Noagaon, Rangpur, Kurigram, Tangail & Coxs Bazar District

Goal: Support girls in Bangladesh to realize their rights to protection and education through reduction of child marriage.

Objective: To reduce incidence of child marriage among girls in 12 Upazilas (sub-districts) of 06 districts in Bangladesh through mass awareness raising and strengthening child protection mechanism against child marriage in order to support girls, right to an education.

Bangladesh committed to? Bangladesh has committed to eliminate child, early and forced marriage by 2030 in line with target 5.3 of the Sustainable Development Goals. During its Voluntary National Review at the 2017 High Level Political Forum, the government noted that women’s empowerment plays a prominent role in the Constitution of Bangladesh, the National Women Development Policy and the Child Marriage Restraint Act. Bangladesh ratified the Convention on the Rights of the Child in 1990 which sets a minimum age of marriage of 18, and acceded to the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW) in 1984, which obligates states to ensure free and full consent to marriage. Bangladesh is a focus country of the UNICEF-UNFPA Global Programme to Accelerate Action to End Child Marriage, a multi-donor, multi-stakeholder programme working across 12 countries over four years. Bangladesh is a member of the South Asian Initiative to End Violence against Children (SAIEVAC) which adopted a regional action plan to end child marriage from 2015-2018. Representatives of the South Asia Association for Regional Cooperation (SAARC), including Bangladesh, asserted the Kathmandu Call to Action to End Child Marriage in Asia in 2014. As part of its commitment, Bangladesh will ensure access to legal remedies for child brides and establish a uniform minimum legal age of marriage of 18. During its 2013 Universal Periodic Review, Bangladesh supported recommendations to improve efforts to protect children from forced marriage, and to more effectively implement the Child Marriage Restraint act and the Dowry Prohibition Act. At the 2014 Girl Summit, the government signed a charter committing to end child marriage by 2020.

What is the government doing to address this at the national level? Bangladesh has made it compulsory to present a birth certificate at the time of marriage. Child Marriage Free Unions are movements led by local government and facilitated by Plan Bangladesh with the aim of enforcing existing law more effectively. In February 2017, Parliament adopted the Child Marriage Restraint Act despite widespread concerns over a special provision allowing child marriage in ‘special cases’. The Act does not define what constitutes a special case. There are fears that such a provision will legitimize statutory rape and encourage child marriage. The President signed the bill into law on 11 March 2017. The government has also begun developing, under the leadership of the Ministry of Women and Children Affairs, a National Action Plan to Eliminate Child Marriage 2015-2021. Progress on adopting and implementing the plan has stalled in the face of backlash against recent regressive legal proposals.

What is the minimum legal framework around marriage? The minimum legal age for marriage in Bangladesh is 18 years for girls and 21 for boys. However, the Child Marriage Restraint Act 2017 includes a loophole where a court can allow child marriage in “special cases”. The act does not explicitly define what those “special cases” might be.

Project indicators and targets

  • the prevalence of child marriage in the working area reduced by 35 % at the end of project period;
  • at-risk persons and victims of child marriage identified by targeted communities and referred to support services 100% at the end of project;
  • community leaders, including parents, grandparents, local leaders, elected representatives, youth (peer leaders) duty bearers and different committee trained to reduce the prevalence of child marriage 100 % of the project area ;
  • targeted communities reached with child marriage prevention-related information 75% at the end of the project period
  • knowledge and skills of duty bearers (Marriage Registrars and UP members), targeted groups and community members improved on prevention of child marriage, Child Marriage Restraint Act, 2017 and redress mechanisms 80 % at the end of the project period at project locations;
  • access to direct services for At-risks and victim of child marriage enhanced 100 % at project locations ;
  • responsibilities of UP, VAW prevention committee and child marriage prevention committee well-defined 90 % at project locations at the end of project period;
  • Functioning of local administration and other duty bearers according to Rules of Child Marriage Restraint Act, 2017 ensured 90 % at project locations at the end of project period.

Project Activities and Implementation Strategy

Sl # Particulars Planned Units
1 District Level Workshop with for 5 District on Combating Child Marriage 5
2 District Level Workshop for Cox’s Bazar District on combating child marriage 1
3 Upazila Level Workshop for 5 district (10 Upazila) on combating child marriage 10
4 Upazila Level Workshop for Cox’s Bazar District on combating child marriage 2
5 Community Meeting 360
6 School/Madrasa/Collage students orientation on CM issue 120
7 Train Marriage Registrar (Muslim & Hindu) on Child Marriage issue at Total Upazila 10 = 12 person+  project staff-2+ support staff -1= 15 person 10
8 Train Marriage Registrar (Muslim & Hindu) on Child Marriage issue at Cox’s Bazar   District Total Upazila 2 = 12 person+  project staff-2+ support staff -1= 15 person person 2
9 Orientation for UP Members, Union VAW prevention Committee Members, standing committee of UP Trafficking Committee on Child Marriage 50
10 Orientation for UP Members, Union VAW prevention Committee Members, standing committee of UP Trafficking Committee  Child Marriage at Cox’s Bazar 2
11 Orientation for other stack holders (SMC, Local Leaders, CBOs, CSO, Media on child marriage issue at District Level 12
12 Door-to-door NO CHILD Marriage campaign at 600 HH 15
13 Mobilization / Sensitization sessions for parents, grandparents etc , Per Upazila 1 events at high school 12
14 Mobilization / Sensitization sessions for religious leaders, teachers, political leaders, journalist on child marriage issue at Upazila Level 12
15 Student Council at District against Child Marriage with high school female student 6
16 Digital Sign Board at UP Office 30
17 Bill Board at District/upazila 2
18 Materials Development 2
19 Education Support to victim of child marriage 4
20 Peer leader group formation (Meeting with potential peer leaders) 12
21 Training with peer leaders on CM issue 2 days 2 at 5 districts 2
22 Training with peer leaders on CM issue 2 days 2 at Cox’s Bazar 1
23 Staff capacity building training 1
24 Training with peer leaders on CM issue 2 days 2 at Cox’s Bazar 1
25 Cluster wise BC/TIP sub grantee sharing meeting. Participants 17 1
26 Staff coordination bi-monthly meeting 60
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BRAC Supported Pre Primary School

BRAC Education Programme (BEP)

Snap Shot: Duration:  January 2013 to December 2020 ; Funded by:   BRAC-ESP/BEP;  Geographical Location:   Nageshwari Upazila under Kurigram District, Number of School: 16, Student enrolled: 480

Background Information: In 1984 Bangladesh’s literacy rate was just 24%.The world’s largest non governmental organization, BRAC, founded in Bangladesh in 1972, ran a functional education program for adults. One woman participating in the program asked the chairperson, Sir Fazle Hasan Abed , “But what about our children? Must they grow up illiterate and wait until they are old enough to come to your program ?” The following year, BRAC launched a non-formal primary education program. The first year there were 22 schools. BRAC’s primary schools were created to reach the 40% of school -aged children who were not enrolled in government schools. Some children lived too far to walk to the existing schools, and others had dropped out or never enrolled and were now too old to enter the formal system. The core components of the BRAC school model are that it is free for all, the teacher is a woman from the community, the hours of instruction are flexible and determined by the community, and the curriculum is engaging, including many songs and physical exercise. The school accepts only poor students, and usually enrolled more girls than boys. In addition to standard school subjects, the curriculum included life skills, touching on subjects like health, social issues such as early marriage, and human rights. The school buildings are structurally simple. There is no homework, as school children do not have the time to complete it and their parents will most likely not be able to assist them with it. Teachers were closely supported and monitored, receiving regular visits from their program organizers and monthly trainings. BRAC helped organize parent committees to help parents understand and value the students’ education and keep the school accountable to the communities . Through continuous contact with the community, BRAC was able to prevent two major issues troubling the public system: teacher absenteeism and extortion of informal school fees. Early results were promising.

After a few years , word spread throughout Bangladesh about BRAC’s school model. External organizations were intrigued, and approached BRAC to purchase their books and other materials. It wasn’t long before BRAC began to ask these organizations how they were using the materials. This led to BRAC organizing trainings for external organizations on the curriculum . But BRAC’s leadership recognized that the curriculum was only one component of the model’s effectiveness. Abed’s early investments in systems, such as monitoring, training, and accounts, were also critical to achieving and maintaining good performance. Could small NGOs be expected to develop these types of systems on their own? The commitment from the leaders of local organizations was inspiring . It was clear that they were excited to create high quality schools in their communities. BRAC saw an opportunity for change beyond what it could do by itself. In many areas, BRAC had not yet established a local field office to manage local operations, without which the education program could not be implemented by BRAC  directly. There was also a strong sense that it was better, in some way, for the non formal primary school to transcend BRAC’s own efforts. Abed often quoted the African proverb, “To go fast, go alone. To go far, go with others.” Through other NGOs, the model could be more widely implemented; BRAC could contribute to a growing civil society across the country, and help support local NGOs, particularly those with women leaders. BRAC could provide its system, experience, and proven tools.

Project Area Description: Nageshwari Upazila under Kurigram District is located in North-West part of Bangladesh, whose 60% area is surrounded by the mighty rivers like Jamuna and Brahmaputra and their tributaries. There are some Islands within the river estuaries and tributaries – locally known as ‘Char’; which are disconnected from the main-land. Chars are low lying flood and erosion prone islands adjacent to major rivers. These are formed by the constant deposition of sand and silt and fragmentation. Many vulnerable, poor and landless families including victims of river erosion live in those Char areas. The educational scope for the children of those families is very limited. There are only one   government run high schools out of 27.

Bangladesh secondary school system remains poorly managed; centralized and lacks good governance. The consequences of all these include marginalization, poor quality teaching and learning, high dropout rates of children with little community participation and lack of accountability of the people running the system. GoB spending on education is one of the highest for the region. In real terms, funding for secondary education has reduced from 60% of the total educational budget with 98% of the budget spent on salaries and allowances. Therefore, only a fraction of funding remains at the disposal of schools for essential expenses or extra-curricular activities, leaving them to raise funds for repairs and maintenance, equipment purchase, etc. mobilized through teacher contributions, community collections and indirect student fees. However, these local resource mobilization efforts often happened unplanned and schools and local authorities lack specific skills to mobilize local resources to support school operation and improvement activities sustainably. There also still remains around 18% of children who fail to come into contact with the school system in Bangladesh as “opportunities are very limited for some specific groups, such as working children, children with disability, indigenous children and those in remote areas or living in extreme poverty”. However, many of these children could attend if schools were more inclusive and child-friendly. Inadequate knowledge and attention of parents and school authority on specific issues remains to keep these vulnerable groups of children out of schools. Poverty is identified as the overarching factor that also prevents children from enrolling and leads to children dropping-out, and is difficult to isolate from other issues that result from poverty. In the context of Nageshwari  poverty is most visible in the prevalence is trough parent’s lack of Education;  Inability to cover indirect costs of education; Seasonal child labour; Seasonal family migration.

This project is not a targeted poverty intervention, but a participatory method of systemic reform that allows communities, schools and local authorities to overcome the constraints in the local secondary education system of Nageshwari Upazila so that schools are better adapted at promoting the inclusion of all children including the most marginalized. It will directly improve each learner’s achievement level by enhancing the way curriculum is delivered, creating a positive environment for learning through the establishment of an effective school management system and increasing the degree to which parents and community members are involved. Participation is assured through a micro-level planning process which allows for the visioning of the requirements to improve the school, and creating accountabilities between different stakeholders for effective delivery. This planning process paves the way for an effective School Improvement Program (SIP)  which provides a range of classroom and extra-curricular inputs that address the challenges that are common within the Bangladesh secondary School education system to challenge the stagnant enrollment rate and high drop-out figure. In summary, a School Improvement Program provides a road map that sets out the changes a school needs to go through to improve the level of student achievement, show how and when these changes will be made, and provides the inputs through which they can be achieved.

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Micro Credit Program

Micro Credit Program (Revolving Credit Fund)

Snap Shot: Duration :June 1995 to Present; Source of Fund: Loan from BASIC Bank, AB Bank , MISEREOR (Donation) , AusAid (Donation) , DPS, Special Deposit, Beneficiaries Savings ; Geographical Location:  Comilla, Feni, Gazipur, Brahman Baria

ASSOCIATION FOR INTEGRATED DEVELOPMENT-COMILLA (AID- COMILLA)
(Non-profit Organization)

Date of Declaration   Valid Till Long Term Rating Short Term Rating   Outlook
22 December, 2018 21 December, 2019   BBB   ST-3   Stable

Year of Establishment : 21 June, 1995
Type of Organization : Foundation (Non-profit) N
General Secretary : Mrs. Rokeya Begum Shafali
Total Asset : BDT 206.19 million (as on 30 June, 2018)
Banks : AB Bank Limited

Basic Bank Limited
Mercantile Bank Limited R
Bank Loan Limit : BDT 90.00 Million
Bank Loan Outstanding : BDT 74.49 million
Contact Analysts : Imtiaz Ahammad imtiaz@alpharating.com.bd Syed Tamjid Al Naim tamjid@alpharating.com.bd

RATING RATIONALE:

Alpha Credit Rating Limited (AlphaRating) affirms long term of “BBB” (pronounced as ‘triple B’) and short term rating of “ST-3” in favor of Association for Integrated Development-Comilla (AID- Comilla). The outlook for the rating is Stable.

AlphaRating considered business sector characteristics and outlook, competitive position of the foundation, operational activities, demand growth, entry barrier, market position, financial performance, quality of audited financial statements and management reports, management’s relationship with different stakeholders and their experience while  deriving the rating. The above rating is based on the audited financial statements for the year ended 30 June 2016, 2017 and 2018 and other qualitative factors. AlphaRating also considered the loan facilities availed by the organization from AB Bank Limited, Basic Bank Limited and Mercantile Bank Limited, Comilla Branch while assigning the above rating.

Association for Integrated Development-Comilla (AID- Comilla) (here in after referred to as “AID’s” or “the organization”), a nonprofit and non-government organization (NGO) and working in the rural & slum areas of Comilla, Feni, Gazipur, Brahmanbaria and northern part of Bangladesh. The AID-Comilla improving people’s socioeconomic status of underprivileged men, women, & children in urban & rural areas through motivation, organizing of people, non-formal education, training, resource mobilization etc. AlphaRating considered surplus, increasing total assets, strong capital adequacy, and so on while assigning the above rating. AID’s having higher liquid fund and lower defensive interval which means the capacity to operate without any further external fund is much higher than previous years. AlphaRating also considered area coverage, high organizational risk, loan growth to members and all these issues have prevented us from assigning more than the above mentioned rating.

AID’s has been enjoying financing facility from AB Bank Limited, Basic Bank Limited and Mercantile Bank Limited, Comilla Branch. The purpose of the loan was to expand the micro finance program. As per information, total limit of the facilities are BDT 90.00 million and outstanding was BDT 74.49 million. As per information from banks, payment behavior of the organization has been satisfactory. AlphaRating could not find overall payment behavior of the organization. AlphaRating only considered above mentioned banking facilities availed by the organization.

ORGANIZATION PROFILE:
Background

Association for the Integrated Development-Comilla (AID-Comilla) is a Non-Government Organization. The NGO working in the rural & slum areas of Comilla, Feni, Gazipur, Brahmanbaria and northern part of Bangladesh. The AID-Comilla improving people’s socioeconomic status of underprivileged men, women, & children in urban & rural areas through motivation, organizing of people, non-formal education, training, resource mobilization etc. AID-Comilla established in December 1992 and start formal operation in June 1995. NGO operate by the active co-operation of some social workers who have long involvement in the field of development. The organization registered with the department of Social Service of the Government of the People’s Republic of Bangladesh  in 1995 vide registration # Comi – 583/95. According to the regulation act 1978 of the Government AID-Comilla has duly been obtained the registration # from the NGO Affairs Bureau of the Government of the Peoples Republic of Bangladesh, vide registration # FDR 1145 in 1997. Location of the organization at Village: Raghupur, PO: Rajapara, Union: Jagannathpur, Upazila: Comilla Sadar, Comilla-3500.

Working Area

As on 30 June, 2018 the organization has carried on its activities within 09 upazila under 4 districts. The organization has spread its activity with 505 samities. The organization reported 9,958 members and extended its lending service to 7,566 borrowers.

MICRO CREDIT IN BANGLADESH:

The social development scene in Bangladesh is characterized by a strong presence of non-governmental organizations (NGOs). The NGOs emerged following the war of liberation to help the communities in distress as part of post-war rehabilitation. Afterwards, with assistance from foreign donor agencies, they expanded their activities to deliver a variety of services including microcredit, essential healthcare, informal education, women empowerment and rights advocacy. In some exceptional cases, an NGO may the identification of ‘NGO sector’ as a separate entity primarily register itself with the registrar of joint stock societies Acts as a non – refers to an institutional space. During early inception years it was purely work as nonprofit organization currently NGO’s has to have own source of income for-profit side by side contribution. Since the formation of the NGO Affairs functional space, where government agencies were substituted, Bureau (NAB) in 1990, the NGOs have to register with the bureau was important. Functional domains have in order to avail of foreign funds. For the purpose of our exercise, expanded into areas where there are other actors as well. Thus, we consider as NGOs all such organizations, which are outside NGOs do not anymore refer to a single work (function) space. The direct control of the government or semi- government agencies Instead, it is the participatory nature of their work with Pilot experiments into the provision of micro credit to small groups was made only towards  the end of the 1970s. With the success of the Grameen Bank, the 1980s experienced a gradual acceptance of micro credit activities by NGOs. Temperature

The NGO Affairs Bureau (NAB) of the government ownership of collateral was a prerequisite for having access to organization of Bangladesh (GOB), which has to approve all foreign bank credit. One corollary of collateral -based lending practices  grants to NGOs working in Bangladesh, released grants worth was that the poor were not bankable. The NGOs in Bangladesh about US$  250  million  in  FY  1996-97  to  1,132 NGOs, of which and the Grameen Bank, established, to the contrary, that it is very 997 are local and 135 are foreign [NGO Affairs Bureau 1998]. As per NGO Affairs Bureau (NAB) dated November 30, 2014, currently 2,351 NGO’s are active in a different district of the country.

Microcredit services in Bangladesh are provided mainly by non-governmental organizations (NGOs) and microfinance institutions (MFIs), microfinance banks, government programs, nationalized commercial banks, and private commercial banks. According to Bangladesh Bank estimates, NGO-MFIs (estimated at 5,000 in number) are the largest providers of microcredit services in the country— serving 61 percent of all borrowers. 90 percent of microcredit clients are women and the average loan size is about BDT 4,000. The average interest rate on savings is 6 percent; the service charges on credit range from 10 to 12.50 percent for flat collection. The four main players in Bangladesh in terms of MFI members and market share are Grameen Bank, BRAC, ASA, and Proshika. However, the historically strong portfolio quality of these four MFIs declined in FY08 due to the effects of two floods and a cyclone.

The average annual growth rate in the microcredit sector in Bangladesh over the five years 2003–2008 was 23 percent. It was estimated to reach 25 percent annually over  the next three years (2009–2012) as a result of growing demand for larger loan sizes. Despite its significant outreach—estimated at 60 percent of all Bangladeshi households microcredit assets are less than 2 percent of GDP, has increased only marginally relative to GDP since 2001. The total loan portfolio of the microcredit sector is estimated to exceed BDT 135.00 billion and total borrowers, to exceed 30 million. Although it is difficult to estimate the unique number of microcredit borrowers, taking into account their cross-indebtedness to different microcredit providers, they likely number 18 million. It is estimated that just over 60 percent of them have incomes below the poverty line. In the microcredit sector total loan outstanding is around BDT 200.00 billion (including Grameen Bank BDT 62.00 billion) and savings BDT 140.00 billion that have been rendering among 30 million (including 8 million clients from Grameen Bank) poor people which help them to be self-employed that accelerates overall economic development process of the country. Despite the fact that more than a thousand of institutions are operating microcredit programs, but only 10 large Microcredit Institutions (MFIs) and Grameen Bank represent 87% of total savings of the sector (around BDT 122.00 billion) and 81% of a total outstanding loan of the sector (around BDT 162.00 billion).

The State of Microcredit in Bangladesh

In the backdrop of global ‘double-dip’ recession and over-indebtedness crisis in microcredit sector in several countries, Bangladesh’s microfinance sector shows strong resilience and continues to contribute towards the enhancement of macroeconomic growth.

Table 1: Basic Statistics of NGO-MFIs in Bangladesh                                                                                                               

Particulars June, 2011 June, 2012 June, 2013 June, 2014 June, 2015
No. of Licensed NGO-MFIs 576 590 649 742 753
No. of Branches 18,066 17,977 14,674 14730 15609
No. of Employees 111,828 108,654 110,734 109628 110781
No. of Clients (Million) 26.08 24.64 24.60 25.11 26.00
No. of Borrowers (Million) 20.65 19.31 19.27 19.42 20.35
Amount of loan Outstanding (BDT in Million) 1,73,797.60 211,320 257,010 282200 352410
Amount of Savings (BDT in Million) 63,304.44 75,206 93,990 106990 135410

*Total Licensed NGO-MFIs was 697 but only 676 submitted MIS report Source: MRA-MIS Database-2014

The sector had outstanding loans of BDT 278 billion disbursed to 19.98 million  borrowers, and had accumulated BDT 112 billion as savings from around 25.17 million clients – over 93 percent of them are women – through more than 16,000 branches, by 676 NGO-MFIs licensed by MRA.

Table 2: Selected Indicators of NGO-MFIs in Bangladesh                                                                                                           

Particulars June, 2010 June, 2011 June, 2012 June, 2013 June, 2014
Savings per member (BDT) 2,097.83 2,494.49 3,052.18 3,820.73 4,489
Outstanding loan per borrower (BDT) 7,558.92 8,807.69 10,941.63 13,337.31 13,917
Borrower to client (member) ratio 78.00% 78.80% 78.37% 78.33% 79.00
Savings to outstanding loan ratio 35.60% 35.90% 35.59% 36.57% 41.00%
Borrower per branch 1,115 1,093.33 1,074.15 1,071.93 1,175
Member per branch 1,429 1,387.87 1,370.64 1,368.42 1,480
Outstanding loan per branch (BDT in Millions) 8.42 9.63 11.75 17.51 16.35
Savings per branch (BDT in Millions) 2.99 3.46 4.18 6.41 6.64
Fund Composition
Source  of Fund
June, 2015 BDT in Million
%
June, 2015 BDT in Million
%
June, 2015 BDT in Million
%
June, 2015 BDT in Million
%
June, 2015 BDT in Million
%
Clients’
63,295.5
34.4
74,989.36
32.6
91,178.01
32.9
1,06,999
34.4
135,410.40
33.
Savings
9
6
2
5
94
Loan from
31,767.
17.3
33,576.45
14.6
34,072.27
12.3
34,523.50
11.0
37,769.68
9.4
PKSF
8
1
1
4
7
Loan from
23,577.
12.8
32,652.41
14.2
42,699.37
15.4
51,495.90
16.4
68,574.20
17.
Commerci al banks
9
4
0
3
7
19
Donors’
7,008.3
3.82
7,061.28
3.07
7,104.57
2.57
6,855.04
2.19
5,218.45
1.3
Fund
7
1
Cumulativ
50,298.
27.3
65,437.78
28.4
83,262.38
30.0
1,00,943.9
32.2
137,706.30
34.
e Surplus
7
8
7
9
5
8
52
Other
7,727.3
4.21
16,167.91
7.03
18,390.89
6.65
11,914.58
3.62
14242.07
3.57
Funds
2
Total
183,67
100
229,885.2
100
276,707.4
100
312,731.9
100
398,921.1
100.0
 
6
0
8
7
0
0

Source: MRA-MIS Database-2015

Commercial banks are recently considered a potential source of fund of microfinance, their share of the total source increased over the last three years. MRA has been putting in efforts to increase loans from commercial banks to the sector by introducing the banks to the NGO-MFIs. However, borrowing cost from commercial banks is very high – due to the high interest rate charged and inflation – which discourages NGO-MFIs to avail this  as a source of fund. Previously donor driven NGOs are now trying to rely more and more on local sources of the fund with the decline in foreign funding, which stood at only 2.19 percent in June 2014.

ORGANIZATIONAL RISK ANALYSIS:
Credit Risk

AID’s is engaged in working in the rural & slum areas and offering improving people’s socioeconomic status of underprivileged men, women, & children in urban & rural areas through motivation, organizing of people, non-formal education, training, resource mobilization etc. One of the major risks of MF program is collection high frequency instalments ranging from week to months. The above risk is further fuelled by the loan default culture & overdue overlapping loans prevailing in the banking sector although the banking institutions are stronger entities to collect instalments due from clients through legal measures & selling collaterals. In contrast, the MF programs are being operated by the NGOs without collaterals and with high frequency of loan repayments. Normally, most MF organisers offer the incentive of further loan if there is no default in repaying the instalments. Despite no formal agreement, the above system works favourably in Bangladeshi context and assists those MFIs to maintain high recovery rate.

Operational Risk

Operational risk is the risk of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from external events or unforeseen catastrophes. Operational risk is inherent risk, which is particularly high for MFIs that handle high volume of small transactions daily such as AID’s. MFIs are usually not well controlled compared with traditional commercial banks issuing SME loans. Internal control & corporate governance here often inadequate & the professional qualification with analytical ability of staffs might not be equal to a standard of commercial banks due to lack of fund allocated to reach financial goals and improve organizational structure. This could result in theft of fund, loan disbursement to ineligible and all other sort of corruption. Moreover competition with other MFIs may affect the sustainability of the organization in financial term. Natural calamities like flood and cyclone could also wipe out total financial capability of those AID’s deal with such as poor & neglected people. Higher operational risk may damage reputation and give rise to legal risk.

Legal Risk

Legal risk for non-profit organization arises out of lobbying by the foundation, self- dealing, foreign corrupt practices act, grants to individuals outside approved proposals, breach of fiduciary duty, jeopardizing investment, minimum distribution requirement etc. Failure to comply with governance or involvement with any illegitimate and irrational activities might expose the organization to the significant legal threat.

Industry Risk

The current challenge of MFI-NGOs is whether they could run the program without subsidy, because the flow of donor fund is declining over the years. Since the main objective of micro-finance is to alleviate poverty, the question is whether they would be able to charge real cost of service on the recipients. If it charges full cost, what would happen to the other objective of outreaching the poorest of the poor? On the other hand if full cost is not charged, would they be financially sustainable in the long run? And the challenge for the government is to bring this huge unorganized industry under a uniform umbrella where this industry would get proper direction and support to run the business and at the same time serve the people who are the target group in such a way that they would be benefited in the long run and would be able to overcome their financial backwardness. Ultimately these institutions would become autonomous players in the main-stream economy.

Resistance from the Society

As most of the AID’s participants are mainly working in the rural & slum areas and offering improving people’s socioeconomic status of underprivileged men, women, & children in urban & rural areas through motivation, organizing of people, non-formal education, training, resource mobilization etc. Moreover, in Bangladesh men dominate and make all the decision over women. The way AID’s works will definitely remove the financial barrier of its female borrowers over time which may not be accepted by the  men who rules the family hence it hurts their ego. As a result, they may take the money for their own use rather than letting it to invest for its intended purpose. Moreover religious fantasies and misinterpretation of religion in the society may work directly against women empowerment. If these social difficulties could not be removed to make the environment suitable for a significant portion of its borrower to remove their financial instability, AID’s mission will not succeed.

FINANCIAL RISK ANALYSIS:

While assessing the financial risk of the Organization, AlphaRating divided the financial portion into eight different criteria. Detailed analysis is presented below:

Uncovered Capital Ratio (Portfolio Quality and Vulnerability)

Exhibit 1: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June (BDT in millions) 2018 2017 2016
PAR>30 days 14.60 10.90 10.66
Less, Impairment allowances 11.44 9.56 10.23
Total Amount at Risk 3.16 1.34 0.43
Total Equity 21.18 17.33 8.30
Uncovered Capital Ratio (UCR) (%) 14.92 7.73 5.18
Data obtained from audited financial statements of 2016-2018

The uncovered Capital Ratio (UCR) provides a more detailed indication of an MFI’s portfolio quality. UCR is a more revealing ratio to assess vulnerability and potential loss. Uncovered Capital Ratio (UCR) is calculated by obtaining the Portfolio at Risk (PAR) greater than thirty days minus impairment loss allowance divided by total capital. When considered in conjunction capital adequacy ratio, UCR allows an additional dimension for understanding capital sufficiency. A low ratio suggests better risk management, indicating the MFI is less susceptible to losses above what is already provisioned. Good practice is to maintain the UCR as low as possible, certainly less than 25 percent. As more extensive comparative data is analyzed with the help of more revealing benchmarks, effective use of the rational decision can be made.

In FY 2018, AID-Comila Uncovered Capital Ratio was 14.92%. It appears that the organization had less than adequate impairment allowance compared with the PAR>30 days. The organization already in the risk which is seen the above table. The allowance  is quite insufficient that AID’s moderate ability to combat any classified loan. However, the ratio is based on the PAR>30 days which does not consider credit risk of those who have not made a scheduled payment for 30 days and no overdue. Positive balance of  this ratio implies that amount of lower provision against PAR>30 days has increased  over the years. Even though the MFI has been complying with MRA guideline for provision, there is a risk which is not to ensure the safety margin.

Income Analysis

Excess of income over expenditure is a calculation that measures the amount of total income that exceeds total expenses. In other words, it shows how much surplus operating income remaining in a particular year after covering all expenses incurred by a MFI.  This ratio is calculated by subtracting total expenses from total revenue.

Exhibit 2: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June 2018 2017 2016
Income (BDT in millions) 38.97 31.55 39.58
Income Growth (%) 23.52 20.29
Operating Expense (BDT in millions) 35.12 30.36 37.64
Operating Expense Growth (%) 15.68 19.34
Operating Expense to Income (%) 90.12 96.23 95.10
Excess of Income Over Expenditure (BDT in millions) 3.85 1.17 1.94
Data obtained from audited financial statements of 2016-2018

Income trend of AID’s reflects that total income has been increased each year. Each  year, total income has been increased significantly mainly significant increase in service charge 24.23%, interest received from FDR 61.54% and others income 814.41% compare to the previous year which is the main reason for higher income of the organization. It is mention that, income growth appears to be increased due to all main sources of income has been increased gradually compare to the previous year. Each year operating expense also increased with the line of revenue. The organization was able to manage income to be excess over its expenditure in the years of consideration and the trend of it is increasing.

Asset Quality & Composition

Exhibit 3: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June 2018 2017 2016
Total Asset (BDT in millions) 206.19 184.87 193.56
Asset Growth (%) 11.53 (4.49)
Loan & Advance (BDT in millions) 161.58 138.39 112.13
Growth of Loan & Advance (%) 16.76 23.42
Data obtained from audited financial statements of 2016 to 2018

From the financial statement, it is observed that total assets of Association for  Integrated Development-Comilla (AID- Comilla) have increased by 11.53% in FY 2018. A significant portion of total assets of the organization are Fixed Assets 12.41%, Loan to members 78.36%, Investment on FDR 5.49%, Cash & Cash Equivalent 2.91% and  others current assets 0.83%. A significant portion of total assets such as loan  to members of the organization has also increased 16.76% during the period which has an insignificant impact on total assets growth.

The organization exponentially increased its current assets but loan to members which is shown current assets are the main reason to increased growth rate of total assets. Current assets compromise the investment of FDR, loan to members, deposit and cash & cash equivalent. However, loan to members appears to be increased by 16.76% compared to the previous financial year which is the main drive of an increase in total assets. The organization disbursed loan under microfinance purpose. In 2018, disbursement of those loan was BDT 291.56 million whereas in 2017 disbursement of loan was BDT 236.22 million. The amount ultimately affects the operational performance which shows the organization concentrate more into its loan approval process.

Capital Adequacy Ratio (Institutional Solvency)

Capital Adequacy Ratio (CAR) measures an institution’s solvency. The indicator provides information about the ability to meet long-term expenses and obligations as well as absorb unanticipated future commitments. CAR measures an institution’s resiliency against both expected and unexpected losses, which may result from endogenous and exogenous causes. It is in line with Basel II calculations. CAR uses total capital in the numerator as a complete picture of the MFI/s resources. This includes supplementary capital sources, such as loan loss reserves, asset reserves and subordinated debt. It subtracts goodwill to gauge tangible capital. The denominator is a risk-weighted aggregate of assets as riskier assets require the institution to hold higher capital reserves, including those as a factor to provide more precise solvency than a simple liquid ratio, in which current assets are compared with current liabilities.

Exhibit 4: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June (%) 2018 2017 2016
Capital Adequacy Ratio ( Equity / Risk Weighted Assets) 13.57 12.50 5.72
Capital Adequacy Ratio ( Equity / Total Assets) 10.27 9.37 4.28
Data obtained from audited financial statements of 2016-2018

In 2018, AID’s Capital Adequacy Ratio was 10.27 percent (using risk unadjusted assets). The ratio has been increased in FY 2018. However, using risk-weighted assets Capital Adequacy Ratio is found to be 13.57 in 2018 which is also found to be increasing compared to the previous year but the percentage can be considered to be very lower in terms of general practice. It is assumed that risk weight of 75%, according to Bangladesh bank guideline, has been applied considering all parties are unrated.

CAR is particularly informative when compared to regional benchmarks. An appropriate level often depends upon the size and maturity of an MFI, as well as differing socio- political or economic contexts. National authorities in each country set minimum levels of capital for regulated institutions. In most jurisdictions, it is around 8-9 percent. In Bangladesh, it is currently 10 percent for financial institutions, which is going to be 12.5 percent by 2018 in accordance with Basel III implementation plan. However,  AlphaRating did not found any benchmarks for MFI in Bangladesh context.

Sustainability

Operating self-sufficiency is a percentage (%), which indicates whether or not enough revenue has been earned to cover the Microfinance Institution’s (MFI’s) total costs which includes- operational expenses, loan loss provisions and financial costs. It is calculated  by obtaining all operating income (loan + investment) and divides them by total expenses incurred (financial expense + loan loss provision +operating expense). Excess of income over expenditure margins are expressed as a percentage and, in effect, measure how much out of every Taka income of a MFI actually keeps in earnings and it  is calculated by excess of income over expenditure divided by total income.

Exhibit 5: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June 2018 2017 2016
Operational Self Sufficiency (%) 110.96 103.85 105.07
Profit Margin (%) 9.88 3.71 4.90
Data obtained from audited financial statements of 2016-2018

Operational Self Sufficiency ratio of AID’s stood over 100% means that it had surplus operating revenue after covering its operating costs. However, the increasing trend of the percentage indicates that its operating surplus was sufficient for operational self- sufficiency which has been substantiated by increasing growth in profit margin trend. As a result profit margin has also increase in FY 2018 which is a sign of operational sufficiency.

Adequacy of Resources

The defensive interval (months) is a financial metric that indicates the number of months that a MFI can operate in term of meeting its monthly expenses without needing to access noncurrent assets whose full value cannot be obtained within the current accounting year and additional funds or donation from outside after paying all its short term obligation. To calculate the defensive interval ratio, aggregate the amounts of all liquid assets and then divide by the average amount of monthly expenditures. The liquid funds indicator is similar to the defensive interval in its use but is more conservative in removing assets with restrictions on them from the calculation. The savings indicator measures the increase or decrease in the ability of an organization to add to its net assets. Values greater than one hundred percent indicates an increase in savings. The savings indicator is a simple way to determine if an organization is adding to or using up its net asset base. Debt Ratio is a financial ratio that indicates the percentage of a company’s assets that are provided via debt. This ratio is calculated by total assets divided by total debt obligation amount.

Exhibit 6: Selected Indicators: Association for Integrated Development-Comilla (AID- Comilla)

FYE 30 June 2018 2017 2016
Defensive Interval (months) 61.64 62.90 57.06
Liquid Funds Indicator (months) (1.51) (3.32) (1.94)
Savings Indicator (%) 10.96 3.85 5.15
Data obtained from audited financial statements of 2016 to 2018

Defensive Interval Ratio measures the non-profit organization’s efficiency to operate if  no additional funds are received in a particular year. It determines the number of  months of the expense that can be covered by existing liquid assets. There is no correct answer to the number of months over which existing assets will provide sufficient funds to support MFIs operations. So we could get a better insight of this indicator by trend analysis.

Defensive interval ratio of FY 2018 reflects that the MFI will be able to continue its operation for more than 5 years if available reserves and securities fully support the average monthly expenditure. However, the defensive interval is currently appeared to be at slight decreasing trend but still it’s shows that, the organization has increased the proportionate level of current assets to support its increasing trend of average monthly expense. Liquid funds indicator ratio for FY 2018 denotes that AID’s is not capable to continue its operation for one month with all its liquid assets other than those has a restriction on them after paying all short-term obligations. However, increasing Savings Indicator of implies that MFIs ability to generate a surplus but still it is very low for the organization. Above ratios provide a true picture upon the availability of several years’ historic data. The output of above exhibit might vary upon expansion of organization’s operation further.

Foreign Currency Risk (Susceptibility to Shocks for Foreign Exchange)

The foreign currency risk ratio (Total Foreign Currency Assets- Total Foreign Currency Liabilities)/ Total Equity] measures the relationship between an MFI’s net foreign currency assets and its equity for each foreign currency on the statement of financial position. Foreign exchange risk exposure is more explicitly revealed when relative data is documented with due care and accuracy. Currently Association for Integrated Development-Comilla (AID- Comilla) has no foreign currency assets and is not involved with any foreign currency transaction except some of its donations.

The lower the foreign currency risk ratio a MFI maintains the more limited its vulnerability to changes in foreign currency values. The higher the foreign currency ratio is, the more risk the MFI faces, which may or may not lead to negative performance. Formal industry benchmark have yet to be established; however a rule of thumb of no more than 20% ceiling has been cited, although the amount will vary depending on currency stability and may be lower.

AAA Issuers  or  issues  rated  AAA  represents  the  strongest  credit  quality  relative    to  other Bangladeshi obligors
AA Issuers or issues rated AA represents very strong credit quality relative to  other Bangladeshi obligors
A Issuers  or  issues  rated  A  represents  above  average  credit  quality  relative      to  other Bangladeshi obligors
BBB  Issuers or issues rated BBB represents average credit quality of Bangladeshi obligors
BB Issuers or issues rated BB represents slightly below average credit quality relative to other Bangladeshi obligors
B Issuers or issues rated B represents weak credit quality relative to other Bangladeshi obligors
CCC Issuers or issues rated CCC represent very weak credit quality relative to   other Bangladeshi obligors
CC & C Issuers or issues rated CC and C both represent extremely weak credit quality relative to other Bangladeshi obligors. Rating of C will normally be assigned when an obligor is in technical default on certain commitments or obligations, but not yet in financial default.
D Issuers or issues rated D have failed to meet their rated financial commitment on time or when due
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