BRAC Microfinance has grown to become one of the largest providers of financial services for the poor. It currently serves 4.4 million clients spread across the country. And this includes one of the most hard-to-reach areas – the chars.
Chars, or riverine islands, are low-lying regions formedfrom the deposits of silt. The inhabitants encounter drastic changes in their environment throughout the seasons. In January 2012, BRAC partnered with the Char Development and Settlement Project IV to tackle poverty on newer grounds.
The four chars in Noakhali distict, situated along the south-eastern coastline, are home to 12,741households. Cut off from the mainland, communities here lack access to formal government and basic services like education and healthcare. They are also the ‘unbanked’- meaning they do not have a bank account, and all transactions are carried out in cash.
For microfinance to be a successful tool for poverty alleviation, there must be a holistic and coordinated approach. BRAC’s integrated development interventions targeting the char areas hence, combine microfinance with programmes like health, education and climate change adaptation, among others.
Before the arrival of microfinance, people in the chars resorted to informal financial services- making use of local moneylenders or having asset-based savings in the form of jewellery or livestock. Operating from six branches, today BRAC’s microfinance programme in these chars serves 10,687 households, covering 84 per cent of the population.
In the two years since its advent, BRAC has faced challenges unique to the particular surrounding. In the very first few months, it saw a high dropout rate among its field staff- difficulty in working amidst the adverse climate conditions being the main reason. BRAC decided to work with the locals- thereon recruiting only members from the region, those who were familiar with its environment and knew every detail of its terrains.
As a learning organisation, BRAC takes lessons from its failures and starts anew. Projects are piloted and if successful, are scaled radically through detailed monitoring. Innovative solutions are a central part of its strategic intervention in the chars. The char community although illiterate, is numerate, and has access to mobile devices. With mobile money providing an accessible alternative to brick-and-mortar branches for financial services, BRAC has recently started implementing its mobile financial service, bKash, in these regions. At present, 220 clients have so far been trained to use the service. BRAC staff visits the households to provide motivation and support.
The presence of only one government-owned bank in the entire region goes to show the limited access to formal financial services. For BRAC staff, this means travelling distances of up to 50 km every day to reach the bank. The only modes of travel are by cycle or foot, and by boat during the monsoon.
Muhammad Kamruzzaman, senior manager of BRAC’s integrated development programme says, “High risks include cash getting lost or damaged in the water. BRAC is now setting up cashless branches to minimise the risks and costs of branch security, transport,etc.” Starting this year, clients will have the options to pay their instalments and build savings via mobile money.
Mobile money can be the most efficient tool for financial inclusion of the char populace. About 76 per cent Bangladeshis remain unbanked. Enabling people to take control of their own economic decisions could change the well-being of these remote communities across the country.
Sameeha Suraiya is the deputy manager of the writing team in BRAC Communications.