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Poverty defined by United NationsLack of basic capacity to participate effectively in society

Not having enough to feed and clothe a family

Not having a school or clinic to go to

Not having the land to grow food or a job to earn living

Not having access to credit

Insecurity, powerlessness and exclusion

Susceptibility to violence, living in marginal or fragile environments

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Poverty defined by World Bank

Low income and inability to acquire the basic goods and services:

low levels of health and education,

poor access to clean water and sanitation,

inadequate physical security,

lack of voice, and

insufficient capacity and opportunity to better one’s life.

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Poverty Dimensions

Shaky livelihoodsExcluded locationsPhysical limitationsGender relationshipsProblems in social relationshipsLack of securityAbuse by those in powerDis-empowering institutionsLimited capabilitiesWeak community organizations

Source: Voice for the Poor: World

Bank

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Poverty statistics : 925 Million hungry people in 2010

Regions People

Asia and the Pacific - 578 Million Sub-Saharan Africa - 239 Million Latin America & Caribbean - 53 Million Near East and North Africa - 37 Million Developed Countries -19 Million

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Banks

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Public Sector Private Sector

PRSP : IMF & World Bank NGOs

• Country-driven,

• Result-oriented,

• Comprehensive,

• Partnership-oriented, and

• Based on a long-term perspective.

• Charitable orientation

• Service orientation

• Participatory

• Empowering orientation

MDGs: United Nations and Others Banks

Goals agreed to achieve by 2015:

• Eradicating extreme poverty,

• Reducing child mortality rates,

• Fighting disease epidemics

• Partnership for development

• Financial Inclusion

• Priority based finance

• Need based finance

• Micro Finance

Trickledown Approach

Assumptions/Features Riches are the driving force behind economic growth. Wealth will naturally trickle down and benefit everyone. Ensuring the right environment for the rich and the larger companies

Strategies :◦ Market Mechanism◦ Growth promotion

Result : Benefits hardly reached the poor

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Cooperative MovementFeatures :

Persons voluntarily cooperate for mutual social, economic, and cultural benefit

An expansion of decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders.

◦ Occupied by the well-to-do farmers

Result : Failed to benefit the Small Farmers and Landless

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Target Group Approach

Strategies/InstrumentsMicrofinance, Credit Entitlement, Group replaces collaterals

Results/Outcomes:

Could not reach the Extreme PoorSlow graduation process High interest rate

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Parameters Status

Access to Finance Pricing Basis Non financial wants Ignored Repayment Mandatory Maturity extension Excluded Fellow feelings No Provisions

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Maslow’s Shatibi’s Need

Need Hierarchy Pyramid

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1. Jaruriah(Essentials)

2. Hajiah (Complementary)

3. Tahsaniah (Beautification)

Universal brotherhood

Distributive justice

Circulation of wealth

Transfer payment

Financial inclusion

Filter mechanism

Fellow feelings

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Benevolent loan (Qardul Hasan)

Zakah

Awqaf

Fidiyah (Compensation for non fasting)

Mohor (Dowry paid to women while married)

Micro Finance

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A tool of satisfying the financial needs of the poor following Shariah principles

A form of socially responsible investment.

A target group approach under Islamic financing modes.

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Particulars 2011 National Rank

No of Village 12,857

4th

position Out of

1500 MFI

of the Country

No. of Member 608703

Disbursement (Million BDT)

10,438

Outstanding (Million BDT)

7072

% of total investment 2.18%

Rate of Recovery 99.58%

Members Savings (Million BDT)

2402.13

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Introducing Integrated (microfinance, Zakah and Awqaf) model

Targeting the extreme poor

Portfolio diversification

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