Abstract
People in northwest Bangladesh face triple handicaps, i.e., floods, an agricultural lean season, and cold waves. The seasonal deprivation caused by the handicaps, called monga in Bengali, might be attenuated by microfinance if it reached people in need and supplied liquidity to ease their budget constraints. However, the prototype microfinance invented by Grameen Bank included a package of rules that are inharmonious with conditions in northwest Bangladesh. For instance, weekly repayments and attendance at weekly meetings are among the rules of the prototype microfinance. Seasonal floods and resulting seasonal deprivation make these conditions unrealistic. This chapter shows how Grameen Bank, PKSF and other microfinance institutions are attempting to address the rigidity of the prototype microfinance by adding various forms of flexibility in their contracts.
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Notes
- 1.
Rangpur Division was part of the Rajshahi Division before it separated in 2010 to form a new regional division. According to the terminology of geographical hierarchy with respect to local administration in Bangladesh, a division is a higher level of classification containing several districts. As of 2013, Bangladesh had seven divisions and 64 districts.
- 2.
The Jamuna River is a major tributary of the Brahmaputra River.
- 3.
Because of this “no man’s land” nature, illegitimate occupation of certain parts and conflicts among occupants frequently occur on newly created chars. As for laws and institutional settings concerning chars and some case studies of livelihood, local administration, violence and political disputes, see Barkat et al. (2007). The same authors collected household data of people living in chars in five districts in Bangladesh: Noakhali, Pabna, Rajbari, Rajshahi, and Tangail. Noakhali is a district along the Bay of Bengal, whose seashore suffers from ocean erosion. Pabna, Rajbari, and Rajshahi face the Padma River, which is one of the three greatest rivers flowing into Bangladesh and which is the main branch of the Ganges River within Bangladesh. Tangail, which faces the Jamuna River on its western side, is a few hours’ drive from Dhaka. None of the districts studied by Barkat et al. (2007) are affected by monga, which is seasonal deprivation, as described later.
- 4.
Rangpur neighbors both Gaibandha and Kurigram.
- 5.
- 6.
- 7.
In his terminology, the “greater Rangpur region” comprises four districts: Gaibandha, Kurigram, Lalmonirhat, and Nilphamari.
- 8.
- 9.
Some information derived from the Household Income and Expenditure Survey (HIES) in 2010 appears in Bangladesh Bureau of Statistics (2011; BBS). Though the poverty gap ratio and squared poverty gap ratio by division derived from HIES 2010 are exhibited in BBS (2011), the head count ratio from HIES 2010 is not shown. Therefore, only the poverty gap ratio and squared poverty gap ratio in 2010 are given in this chapter.
- 10.
According to an investigation by Morduch (1999b), subsidies play a great role in Grameen Bank. The same is true for most microfinance institutions. From this viewpoint, they are not pure commercial banks. However, as long as fund raisers consider their activities meaningful and are willing to continuously provide subsidies, the microfinance institution can be operated stably and soundly.
- 11.
Specifically, the Government of Bangladesh provides part of the capital (6 %, according to Grameen Bank’s website), which caused Yunus’ forced retirement by the government in 2011.
- 12.
According to the 2011 annual reports of BRAC and Grameen Bank, BRAC had 5.2 million active borrowers (BRAC 2011: 28), while Grameen Bank had 6.58 million. For the figure for Grameen Bank, see the following website: http://www.grameen-info.org/index.php?option=com_content&task=view&id=632&Itemid=664.
- 13.
Palli Karma-Sahayak Foundation means “Rural Activity Helping Foundation” in Bengali. There is no formal name of PKSF in English, though.
- 14.
TMSS does not have any formal name in English. The name means “Thengamara Women-Youth Society.” Thengamara is the village in which TMSS initiated its activity.
- 15.
Union is an administrative unit under Upazila, which is under district (alias, Zila). For example, Gaibandha District has 7 Upazilas, 82 Unions and 1,244 villages.
- 16.
This organization does not seem to have any formal name in English. The name means “Village Development Service.”
- 17.
The name of this organization may be translated as “People’s Health Center.”
- 18.
This may be translated as “Community Welfare Organization.”
- 19.
This may be translated as “Contemporary Community Development Organization.”
- 20.
This may be translated as “Village Development Center.”
- 21.
Jagoroni may mean “awakening,” while chakra means “wheel.” Chakra has multiple connotations such as a spinning wheel, which Mahatma Gandhi used as a symbol of the Indian independence movement, and a center of vital energy in yoga terminology.
- 22.
- 23.
Gram Unnayan Karma, which is a partner organization of PRIME and which has its headquarters in Bogra District, also uses GUK as its acronym. In addition, another NGO named Gram Unnayan Kendra, meaning “Village Development Center,” also uses the same acronym. Gram Unnayan Kendra’s headquarters are located in Chilmari, Kurigram, and it is a partner organization of PKSF. However, throughout this book, GUK is used as an acronym for Gana Unnayan Kendra.
- 24.
No formal English name is given. The name may be translated as “Law and Arbitration Center.”
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Yamagata, T. (2014). Seasonal Deprivation and Microcredit in Northern Bangladesh. In: Shonchoy, A. (eds) Seasonality and Microcredit. SpringerBriefs in Economics. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55010-5_3
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