The First Loan of My Life

Improving Livelihoods among Marginalized Bangladeshis

"Please make me a member, give me a loan. I will pay it back at any cost," says Salma Begum, recalling her plea eight years ago to join a micro-credit group in her village. And, she received "the first loan of my life" - 2,000 taka (around USD 29.00) which she used to buy dried fish and other goods that her husband Tafsir Ali sold locally. Gradually, he managed to invest in a small shop, while Salma, with careful management of their income, bought livestock to start her own business.She borrowed a further 8,000 taka (USD 116.00), with which she bought a rickshaw that she hired out, bringing in additional income.

With time, she could take more loans, which saw her expand her family farm to include several pigeons, ducks, chickens, six goats and two cows. No matter how meager the profits, Salma says she has made it a rule to always save something from each project.She explains confidently the remarkable progress she has made since joining the micro-credit group, one of many in the Saidpur area in Bangladesh's northwestern district of Nilphamari. "Just from selling pigeons, I earn 1,500 taka (USD 22.00) per month which I deposit in the bank for loan repayments. The money from our small shop caters for household expenses and our savings." She bought 90 decimals (0.36 hectares) of land which provides the family with "enough rice to eat, unless there’s calamity, like floods," she adds.

LWF Bangladesh Program

Industrious, ambitious and respected in her village, Salma is also a committee member of a local federation supported by one of Bangladesh's largest non-governmental organizations operating in the northwest regions of Rangpur and Dinajpur. The Rangpur Dinajpur Rural Service (RDRS) provides support to 25,746 groups and over 310 federations that have in turn benefited over 2.7 million people or 485,127 households among the poorest people.

Established in 1971 following the war of independence, RDRS started as a country program of the Lutheran World Federation (LWF) Department for World Service, evolving into a DWS associate program, and a leading actor in rural development. Its programmatic approach has also changed from needs-based to rights-based, aimed at enabling the rural poor and their institutions achieve meaningful political, social and economic empowerment and a sustainable environment through individual and collective efforts.

Salma plans to stand for elections as a member of the Union Parishad (lowest tier of the local government) in order to represent the poor people in her village, a move she would not have contemplated in 2000. In fact, when she first applied to join an RDRS group, her neighbors were not supportive because they thought she would not be able to repay the loans. Until then, life for the couple had been a hand-to-mouth existence.

RDRS local branch manager Abdul Gafur describes Salma as enterprising and a role model for others. Her husband, rickshaw-puller Ali, just smiles at the mention of his wife's success. As a father he is pleased that his children go to school."I hope my son will pass [master's degree level] and my daughters are more qualified so that we can live better in the future," Salma adds. On her involvement in local politics, she says, "I’ll grow and grow; my projects will be bigger; I’ll be able to say goodbye to want; and I’ll help family members and neighbors."

Joss Stick Production

Like Salma and Ali, more than 70 percent of Bangladesh's 153 million people live in rural areas, where approaches to the problems faced by the poor are also changing. Where once a small plot of land was enough to pull a family out of poverty, nowadays there are different opportunities as technologies adapt and markets widen, a principle grasped by many of the households and groups with which RDRS works.

Roksana Begum is not only poor but also homeless in her country of birth. Like thousands of other Biharis, she lives in a camp of 280 households just outside Saidpur with her husband Mohammad Ibrahim and five children. For over 30 years, this community has lived outside mainstream society, ostracized because they supported the losing side in the 1971 war of independence.Despite some legal and political improvements for Biharis today, the couple still struggles to survive on Ibrahim's daily wage ranging from 150 to 300 taka (2.00 to 4.00 USD) as a casual laborer at the local railway station.

Until recently this was supplemented by Roksana’s 7.00 taka (around 10 cents) income earned from selling to a local businessman each bundle of 1,000 home-made joss sticks (a slender stick of incense burned in front of a deity).Since joining an RDRS group, Roksana realized that she could make more money by setting up her own joss stick business.

Supported by her friend Sabana, she applied for a loan of 5,000 taka (USD 73.00) to purchase the raw materials, and she gradually increased her profits. "Before," she says, as she works in her congested house, "I made joss sticks for others, but now I do it for myself and even employ three other people. I earn enough money so my family no longer suffers," she explains.Although Roksana now puts food on the table every day and pays the children's school fees, she wants to expand her business.

She plans to learn how to scent the sticks - the last part of the manufacturing process, done by the company marketing the commodity - so that she can sell them directly to the city traders without going through agents. Until then, she tries to save as much as she can for the future, confident that there will always be a market for her product.

"After all," she argues, "although I have a goat and I'm going to buy a cow soon to sell milk, they could die and I will be poor again. But people will always want joss sticks and I’ll always have an income."RDRS is one of the LWF/DWS field programs providing relief and development support to communities in 36 countries in Africa, Asia, Latin and Central America, and Europe.