CARB has been focused agricultural credit disbursement to the small and marginal farmers for enhancing agricultural production than its other microfinance products from its inception. To bring the small & marginal farmers and rural poor women into mainstream development, CARB focuses on institution building as a strategy. Organization believes that a common platform that is created and owned by the beneficiaries is a prerequisite through which the members can make themselves count in the development process. The group is an association of the small & marginal farmers and poor women, who come together with the help of CARB to try and improve their socio economic position. CARB’s approach to economic and social development of the poor, especially small & marginal farmers, involves three interrelated strategies: service delivery, institution building and wider social mobilization.

With regard to institution building, the groups are the primary organizations that CARB seeks to help establish and strengthen. Each group is constituted of several small groups that vet applications and provide group guarantee for CARB loans. The group members will meet regularly (weekly, biweekly and monthly). During those meetings the proposed loan used of new borrowers will be screened and it will be decided in group whether the proposal are acceptable. Once the loan has been given to borrower, the group will follow up the profit of the investment made, repayment are collected individually, but per group. If one borrower can’t pay, the group has to take care of the repayment by dividing the debt among the group members. New loans depend on good repayment rates for the entire group, so that there is an incentive to timely reimburse installments of all group members. This leads to social pressure between group members and functions as social collateral. In many cases prospective members are asked to form groups by themselves. By making their own selection of trustworthy individuals, the chances of having contribute for other group members diminishes and repayment rates increase.

CARB offers various types of credits and savings to its members in the rural as well as urban areas. About 16367 members are enjoying CARB’s flexible financial services for 25 years. CARB’s tailor made credit support to the specific target group help them to increase their production and buildup confidence for sustainable development. Lack of access to the formal banking system, CARB provides micro-finance support services to the small & marginal farmers for increasing agricultural production. Through this process CARB’s microfinance programme works to create a self-sustaining and reliable financial service program for the poor. CARB microfinance program has some key features which assist its program beneficiaries in their efforts to come out of poverty. The features include the provision of the savings, loan, death benefits, management information system, and administrative efficiency. Let us briefly see the first six features below.

1. Savings

            The Integration of a saving component in microfinance program has different functions:

• By linking a savings product to microfinance program, people learn the principles of savings and money management, and acquire the habit of savings. Savings are a safe guard for households recovering from poverty to face unexpected events and dramas.
• Savings are a relatively cheap source of funds for microfinance program, as the interest rates to attract savings are usually less than those that have to be paid to borrow funds commercially. With these extra funds, new borrower can be attracted, who in their turn generate capital by depositing savings. The accumulation of capital for loans is of major importance for the sustainability of a program. There is danger that introducing a credit model without a saving mechanism may induce undesirable dependency on external funds.
• Since there is a higher motivation of the borrowers to pay back loans that are partly financed by the savings of the people of community, a bigger involvement and as a consequence, a higher repayment rate can be expected.
• Savings contribute to the accumulation of capital in community.
• All beneficiaries have the opportunity to save with CARB, which will give them 6% benefit at the end of the year. This savings fund will act as a security fund for the beneficiaries during the time of their needs. CARB has given special emphasis on the member savings as it will raise their self-esteem and empower them. At the same time, there is a better opportunity for getting a larger amount of loan if the member has much more amount of savings.
• CARB has two types of savings for its beneficiaries that are regular savings and voluntary savings. The amount of savings deposit varies from 50.00 to 300.00 tk. in different loan product. Usually members deposit their savings in the meeting day.

2. Loan:

         The general objective of CARB microfinance programs is to tackle poverty but every programs has its specific objective(s). CARB is implementing 6 (Six) types of microfinance programs which are 2.1. Jagoron, 2.2. Agrosor, 2.3. Agriculture, 2.4. Sufolon, 2.5. Housing & 2.6. Farm and Irrigation Equipment Loan to cater to the needs of poor people with different occupations. Credit services offered in these six loan products differ in terms of employment opportunities, and certain conditions apply during loan applications.

2.1.   Jagoron:

         Jagoron loan program is a tool for the alleviation of poverty and empowering the poor. Lack of access of the formal banking deprives them of the facilities to borrow, save, and invest in productive activities. Making credit available to the rural poor enables them to become involved in income generating activities, which in return, allows them to be economically self-reliant. Through this process CARB Jagoron program works to create a self-sustaining and reliable financial service program for the poor, especially women. CARB provides to its group members to initiate different income generation activities. While loans for individual do not require collateral, members must have some savings with CARB before they are eligible for loans. Credit operations are carried out through a revolving loan Fund (RLF). This RLF consists of loan from commercial bank, member’s savings, Palli Karma-Sahayak Foundation (PKSF) loan and other loans. Loans realized are credited to and form part of the RLF for extending further credit. Loan loss reserve is kept to cover the risk of bad debts and death risk. Regular borrowing and payments allow the borrower to take higher loans. It has Vision in the society where:

• The poor and the disadvantaged will be able to achieve sustainable improvement in their livelihoods,
• Attain a high degree of self-reliance and manage their own affairs with dignity and freedom.
• Target Group Selection:

         Field officer select the target group from the survey forms CARB has a set criteria as to who can be considered as a member for this program. The criteria for the proper target selection are:

• Should be aged between 18 – 60 years
• Hard day laborers, who rent manual labor (non-farm)
• Farmer laborers who have less than 100 decimal of land.
• Should not belong to any other NGO.
• Small businessmen and traders who run their own business on a daily basis to earn their daily livelihood.

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  • Member Selection:

           Member are selected according to the member selection criteria set by CARB. The MF staff must follow this guideline as the sustainability of the Program lies with the members and their repayment pattern. The member selection criteria set forth by CARB are:

  • Should be aged between 18 – 60 years
  • Only one member per household
  • Must be a resident of the village/area for at least for 5 years
  • Information about the prospect member’s past (behavior, law, Character, etc.)
  • Prospects with land area of 0 – 50 decimal are preferred.
  • Prospects must not belong to any other NGO(s).
  • Prospective members should be living within the 500 meter boundary of the groups.
  • Windows are encouraged to join a group.
  • Key Features of Jagoron Loan Program :

                 Loan range                  :      5,000/- to 99,000/- Tk.

                 Service Charge           :      12.80% (Flat rate)

                 Mode of Payment       :      Weekly

                 Repayment period      :      1 (One) Year (equal 45 instalments and no of 46 installment per thousand 5 tk. only as service charge).

                 Loan products            :      Mostly crop and non-crop agriculture, small trading, transport and other family-based small business.

                 Savings                       :      Weekly 50/- tk Monthly 200/- tk.

                 Death benefits            :      This provision states that when an existing member or key earning person in his/her family member passes away, then the organization will pay the deceased members family a some of amount which is equal to his/her present loan outstanding.

           Cumulative loan has been disbursed as of June 2024, number of loans 31196 and taka 108,30,15,000/-, against of this disbursement cumulative realization is number of loans 25239and taka 94,76,87,271/-. Loan outstanding as of June 2024, number of borrowers 5957 and taka 13,53,27,729/-.

   

  2.2    Agrosor

           Agrosor loan program was initiated to provide loans to small enterprises with growth potential. The program aims to generate income and create new employment through enterprise development in the rural and urban area. The working area of Agrosor program is usually 8 km. from branch office. With a 8 km. radius Field Officer has ground to cover in search for potential clients. Entrepreneur selection is very significant for this program to operate smoothly. The field officer has to conduct a survey in community to find out facts needed to run the program. At the same time, the Field Officer should make a list of all prospective clients and maintain a register. In this register, the names of potential clients, their address, name of the business, investment, and a probable amount of Agrosor loan needed are noted. The program extends loans on individual basis. In other words, the loan is given to business rather than an individuals the loan is for the individual for use in their specific business, like Stationary, Grocery, Metal works, Furniture etc.

  • Objectives of the program

  CARB has been started this program with the following aims and objectives:

  • Provide credit facilities and technical assistance to existing business whose access to formal financial institutions is limited.
  • Provide loan through a simple loaning process that encourage rural people to come forward and taka loan without delay.
  • Provide opportunity to the small and medium enterprise that fall within the working area of the CARB others microfinance loan products.
  • Motivate small and medium entrepreneurs in the rural and urban areas to do better, thus creating jobs opportunities.
  • Provide valuable information about production and marketing of products.
  • Motivate small and medium enterprises to produce better products that are of good quality.
  • Provide financial assistance to those individuals who do not fall in the Microfinance target group or do not have the access to the formal financial institutions.