Project Proposal

on

Poverty Reduction of Vulnerable Households through Small Scale Enterprise

Development (PROVED) project

Project Duration:
18 Months

Location
Rangpur District in Bangladesh

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Table of Contents

1. Problem statement..................................................................................................................................3
2. Objective and result description..................................................................................................................4
3. Description of the interventions..................................................................................................................4
2.6. Activities for result-1;.............................................................................................................................4
2.7. Activities for result-2;.............................................................................................................................5
2.8. Activities for result-3;.............................................................................................................................6
2.9. General activities....................................................................................................................................6
4. Implementation strategy..............................................................................................................................8
5. Project Management...................................................................................................................................9
6. Risk and assumption.................................................................................................................................10
7. Sustainability.............................................................................................................................................10
8. Budget of the project.................................................................................................................................11

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Problem statement

With 142.3 million populations (Population Census 2011), Bangladesh is one of the world's most
densely populated and 8th populous among countries in the world. According to Human
Development Index (HDI) 2011, Bangladesh ranked 146th out of 187 countries. Bangladesh
Statistical Bureau, (BSS, 2009) shows that 41.2% of people are living below poverty line. Among
this, 31.9% are poor and 9.3% are ultra-poor. Poverty and food insecurity of Bangladesh has been
significantly and adversely influenced by various factors. North-west part of Bangladesh is one of
the poorest regions among other areas of Bangladesh. In 2010, Bangladesh Bureau of Statistic (BBS)
estimated poverty rate in north-west in Bangladesh - 30.1% (lower poverty line) and 46.2% (upper
poverty line). Seasonal unemployment is common phenomena in this area. Consequently,
unemployment creates monga (‘Monga’ is a Bangla word, means seasonal food crisis) in every year
during a particular period.

The major problems of the households are poverty and livelihood insecurity. Targeted poor
households face lack of capital and productive assets; do not have required skills and capacity to
involve with framing and non-farming activities. They do not have access on cultivable land. High
levels of inequity and social marginalization exacerbate overall poverty and livelihood insecurity,
denying access to natural resources and services. Patriarchal system and gender inequity results in
further marginalization of women. Lack of demand for agricultural labor in the monsoon and drought
season, combined with extremely limited access to land and to markets severely limits employment
and income generating opportunities. Male members migrate to urban areas for temporary work,
which makes the life and livelihood of the poor women in the areas dependent and vulnerable.
Women have limited mobility and traditionally not been engaged in commercial or trading activities.
Women are further constrained by their lack of awareness, social isolation and lack of decision-
making power. Weak government and limited local capacity perpetuates the above issues.

Recognising these issues and learning from its global experience, Islamic Relief aims to explore
sustainable solutions for underserved rural households as part of a capacity building programme
funded through IRW’s Programme Partnership Agreement (PPA) with DFID. Such a sustainable
livelihoods approach, based on an Islamic microfinance model requires a concerted effort and
collaboration from all stakeholders including the government, the private sector and civil society
organisation and individuals.

Description of project participants, their needs and how the needs will be addressed:

The direct project participants will be 4500 poor and marginalized women (age – 18-50 years) in
targeted areas. In wealth ranking, they will be bottom line households in community. They do not
have significant productive assets; income level is low and irregular (average $ 05 - 20 USD per
week); no scope of savings and limited access on traditional micro credit; day laboring is the main
occupation; majority of them are land-less or limited access to land; they do not have potential
livelihood options; face food crisis round the year or in particular period; do not have adequate skills
and capital to improve livelihood; and are not united to build networks and attend rights.

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 The project will facilitate women to organize themselves in self-help group. Regular meeting and
consultation will be continuing to strengthen the groups. Based on need assessment, productive
assets and skills will transfer among the selected group members. Self-help financing will be
continuing within the groups. The project will facilitate to promote women’s accessibility and
empowering them for assessing their rights.

The project will also facilitate to develop unique model of Islamic microfinance to expanding
alternative approach of microfinance other than conventional microfinance.

Objective and result description

The overall objective of the project is “ To contribute towards achieving MDG1 (reduction of
poverty and hunger) through improving livelihoods of the rural poor people in North-West part of
Bangladesh” and the specific objective is “to sustainably increase incomes of 4500 poor households
in Rangpur district of Bangladesh through self-help group approach to small scale enterprise
financing using Islamic finance principles and strengthen Islamic Relief Bangladesh’s capacity for
enterprise financing programs

Result-1: Formation and strengthened functions of 225 self-help groups to develop a model of
enterprise financing based on Islamic finance principles and on a revolving fund basis.

Result-2: Enhanced potential livelihood options of targeted households for increasing income and
assets.

Result-3: Developed, documented and disseminated learning to strengthen Islamic Relief

Bangladesh’s small scale enterprise financing initiatives and influence policies related to Islamic
micro-finance.

Description of the interventions

 Activities for result 1; Formation and strengthened functions of 225 self-help groups to develop a
model of enterprise financing based on Islamic finance principles and on a revolving fund basis


Formation and strengthening Self-Help Group (SHG)

Self Help Group: It has been realized in many parts of the world that an effective way to tackle
poverty and to enable communities to improve the quality of life is through social mobilization of
disadvantaged people, especially into Self Help Groups (SHGs). The concept of Self Help Groups is
based on the idea of community participation, as sustainable community development requires the

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active participation of the entire community. Peoples’ participation ensures that the benefits of
development are equitably distributed. To further this, focus of self-help groups is to develop the
capacity of the disadvantaged, particularly women, and to organize them, so that they can deal with
socio-political and socio-economic issues that affect their lives. The women mobilize in small groups
for savings & credit for improving the economic conditions of the individual women. Inter-loaning
meetings increase their confidence in themselves. Micro-capital assistances raise their hopes for
starting small enterprises for generating more money thus improving their overall economic
condition. Apart from IGA the groups are instrumental in tackling the village issues such as water
problem/social issues, violence against women, family crisis and negotiating with the local leader for
getting their rights within the village. The primary focus of self-help groups is to provide emotional
and practical support and an exchange of information. Such groups use participatory processes to
provide opportunities for people to share knowledge, common experiences, and problems. Through
their participation, members help themselves and others by gaining knowledge and information, and
by obtaining and providing emotional and practical support. Self-help groups are voluntary and are
led by members. Generally, groups meet on a regular basis, are open to new members, and do not
cost money to join. Traditionally, self-help groups have been in-person meetings. self-help group,
nonprofessional organization formed by people with a common problem or situation, for the purpose
of developing their living standards, livelihood options, gathering information, and offering mutual
support, services, or care. The group should maintain simple basic records such as Minutes book,
Attendance register, Loan ledger, General ledger, Cash book, Bank passbook and individual
passbooks.

 Activities for result 2; Enhanced potential livelihood options of targeted households for increasing
income and assets.

Conduct livelihood assessment to identify locally available and feasible farm, nonfarm IGAs
In this respect, respective IR Bangladesh staff will develop a structured questionnaire with some
specific criteria, informed by IRW’s SFA2 key performance indicators, the PPA Islamic
Microfinance Strategy and IR Bangladesh’s strategy. To identify livelihood as well as income
generating options of selected villages and targeted households, the project team will conduct in-
depth analysis of livelihood addressing the issues of seasonality, experiences, potentialities, risk,
opportunities, markets, cost benefits, acceptances, environment etc. In the process of household level
livelihood analysis, project staff will follow structural format and tools to measure livelihood
opportunities for next course of actions and support. In this process, participation and opinions of all
level should effectively be addressed.

Develop household level business plan

The project officer will facilitate the development of a business plan for each targeted household. It
will be a tentative roadmap for advancing livelihoods options as well as increasing income for next
years. The business plan will be developed based on household livelihood analysis. Through
effective participation of all household members, a realistic business plan will be developed
considering strengths, scopes/opportunities, risks, financing, and other factors.

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  Activities for result 3; Developed, documented and disseminated lesson learning to strengthen Islamic
Relief, Bangladesh’s small scale enterprise financing initiatives and influence policies related to
Islamic micro-finance.

Organize training on Islamic microfinance for staff/practitioners (IRB and outside)

Islamic microfinance is an emerging market in the field of Islamic finance, hence there is a need to
train and raise awareness campaigns on this subject, given its potential to provide a viable alternative
to conventional interest-baring microfinance products. The aim of this training is to orient about
importance of Islamic microfinance and differentiate between conventional and Islamic microfinance
for microfinance professionals. The training course will introduce Islamic finance; the Shari'ah
foundation and applications of Islamic microfinance; microfinance and its product mechanism;
Islamic microfinance products; different models and deposit management in Islamic microfinance
etc. Participants of this training course will be microfinance professionals and experts, development
activists, NGOs/INGOs professionals. External expert trainer(s) on Islamic microfinance will be
hired for conducting the training course.

Organize seminar on Islamic microfinance (regional and national level)

Day-long seminar on Islamic microfinance will be held on national and regional level to disseminate
knowledge of Islamic microfinance. The seminar participations will be different level stakeholders
like microfinance practitioners (conventional and Islamic), NGO/INGO, Govt. officers of line
department, Bankers, Donor agencies, civil society members etc. Through the seminar, participates
will have scope to learn about principles and operational aspects of Islamic microfinance. Islamic
microfinance scholar or specialist will present key paper on the seminar.

General activities

. Staff recruitment and capacity building

A total 17 fulltime (Microfinance Expert/Project Manger-1, Brach Manager-2, Monitoring
Assistant-1, Internal Audit Assistant-1, Project Assistant-1, Procurement Assistant- 2,
Community Organizer- 5, Intern-1, Messenger cum Cleaner-3) and 2 part-time (Program
Manager-20%, Accountant-50%) staff will be recruited for the implementation of the project.
Islamic Relief, Bangladesh will recruit project staff through the recruitment circulation (need
base) in the daily newspaper/web-based sources. Existing experienced and committed staff can be
deployed to the project for full time engagement through the competitive process. Apart from the
direct project staff, senior management staff (sharing) of IRB will provide need base assistance to
the project. The human resources of the project will function according to project organogram.
Job description of each staff will be provided during offering to select staff. Working station of
each staff will be segregated basis on her/his duties and responsibilities. To develop the capacity
of the staff and smooth implementation of the proposed activities there will be a process of
capacity building through training, coaching, mentoring, orientation, etc. At the first quarter, the

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IRB will arrange 5 days long residential foundation training for all staff of the project to enrich
their understanding on the project, and implementation methodologies and Islamic micro-
financing. In the 2nd year, the project will organize 3 days refresher training on above mentioned
course.

Office set-up
There will be one project office to coordinate all project activities. Necessary furniture & logistic
support will be purchased by IRB for the office. Table, chairs, shelf/storage unit, computer with
internet facility, scanner, generator, fan, photocopier, etc will be provided to the office as per
necessity. Apart from that, a mobile phone set with connection, rental vehicle, motorcycles,
bicycles, etc. will be available for the project staff for proper communication and smooth
implementation of the project. Within 1 st quarter, targeted office set up and necessary logistic will
be ensured. In this regard, IRB will use existing office equipment’s and logistics considering
availability.

Conduct baseline survey

A participatory baseline survey will be undertaken at the very beginning of the project which can
allow us to determine the present status of the proposed project areas. The evidence so generated
shall not only be the benchmarks for our on-going monitoring processes but shall also be used for
identifying issues for advocacy with the duty-bearers of the region and/or country. Both
qualitative and quantitative methods shall be used for this purpose. In this respect, respective
project M&E staff will develop a structured questionnaire, checklist and conduct field tests. After
incorporating the field test information, PDMER unit will finalize the questionnaire consultation
with project staff. IRW universally baseline instruments will also follow in conducting this
baseline. An orientation session on the questionnaire will be conducted for clear understanding
of the data collector/field facilitator who will be recruited only for the data collection, editing &
coding purposes. The Monitoring Officer will supervise the data collection process and provide
regular feedback to the concerned authority. Baseline data collection process will be completed
within 1st quarter. The survey will be done through both internally and/or externally. IR-B will
be responsible for the overall process of baseline survey, guided by the impact assessment system
that IRW’s Global Microfinance Advisor is currently developing.

Develop M&E plan for the project

To keep the project activities on track and assess the progress, effectiveness, impact of the
project, the project manager will develop a well-defined monitoring & evaluation plan. There will
be clear indication for implementation methodologies of the overall MIS, monitoring and
evaluation activities of the project. It is envisaged that M&E and social performance management
will be integrated into the MF MIS to ensure that impact assessment becomes an integral part of
project management.

After reviewing all the relevant documents (project proposal, logical frame work, action plan,
project participants selection guideline, etc.) of the project, a 2 days long workshop will be
arranged at 1st quarter with 20 participants involving project M&E staff and concerned project
staff lead by PDMER department. A draft M&E tools, techniques and guideline will be
developed from the workshop and after piloting and sharing, a final M&E plan will be developed.

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 Later on, the final Monitoring and Evaluation plan will be institutionalized through organizing an
orientation session for relevant staff of the project. The Project will follow the final monitoring
and evaluation for the project period.

Conduct midterm review and final evaluation

To assess efficiency, relevance, effectiveness impact and sustainability of the project, midterm
review and final evaluation will be conducted. A mid-tern review will be conducted by the
PDMER at 5th quarter of the project. A ToR will be developed for conducting the assignment in
consultation with the IRW Global Microfinance Advisor. Both qualitative and quantitative
methods shall be used for conducting midterm review. All the processes like develop data
collection tools, staff orientation, data collection, data analysis, draft report preparation, etc will
be done by the PDMER. Incorporation of feedback from different stakeholders, report will be
finalized. The same methodology will be followed for the final evaluation, and it will be
conducted at the last quarter of the project.

Coordination, communication and visibility

To keep the project on the right track, to assess the periodical progress, find out the drawback of
the project and preparation monthly & quarterly plan, a regular coordination meeting will be
conducted. At the project level, monthly coordination meetings will be held with the participation
of all field staff. In this meeting, all the participants will share the status of their targeted activities
which will be compiled for reporting/documentation. Apart from the above-mentioned
coordination meetings, quarterly Project Steering Committee meeting will be organized in every
quarter.

In order to ensure proper visibility of the project which is funded through IRW Partnership
Programme Agreement (PPA) with DFID, a visibility plan will be developed. For appropriate
communication with different stakeholders, there will be a communication plan also. There will be
clear indication for implementation methodologies of the overall guideline of visibility and
communication of the project. For the visibility purpose, several materials will be distributed to the
different stakeholders or participants of different events of the project. The project will maintain
communication with all the relevant stakeholders from time to time or as per the necessity of the
project. Strong communication will be held with the government officials, elected bodies of different
institutions, government & non-government service providers, NGOs, respective communities, local
leader/social elites, project participants, IRB as well as the donor

Implementation strategy

SHG-led approach: The group led approach is a process which is implemented by a group and
involves group members in a decision-making process. The group will be facilitated by the project
staff. The project will initiate group-led saving mobilization and financing and address other relevant
socioeconomic issues through groups. IRB will try to develop a unique model of SHG microfinance.

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 Internal control: IRB’s MF project has comprehensive system of monitoring at the field level to
ensure high quality and transparent services and also maintain Islamic Shari’ah Principles in every
step of operations. Branch management will visit each group at least once during the loan cycle and
generally more often to confirm repayment data and monitor group member’s businesses. Each of
the SHG will have internal checking mechanism to crosscheck their financial transaction and
banking. Centre level MIS software will use to organize financial operation of all SHG level.

Operational structure: IRB’s Livelihood Program will have the overall responsibility to operate this
microfinance program following IR rules, procedures and policies. Under the supervision of project
steering committee, IRB’s Microfinance Expert will be the responsible person for operating the MF
program and will provide technical, strategic, administration and other management guidance to run
the project smoothly at the field level and liaise with respective stakeholders.

Capacity Building: Capacity building is the key strategy for implementation of the project. The
project will enhance capacity of poor women in respect to economic, social, and rights issues
through training, orientation, meeting (group sharing), and mentoring.

Community Participation: Community participation is an essential approach which creates a

transparent and enabling environment for implementing project interventions. It also helps to be
accountable of implementing organization towards the targeted peoples. Apart from that, community
participation will be ensured in the process of target group selection, group formation, livelihood
support, and financial transaction so that community people can monitor the project activity at the
field level.

Advocacy and Networking: It will be an important method and the project will gradually develop an
advocacy strategy with relevant stakeholders and build networks with local administrations and
authority. The targeted households will link with local authorities and civil society to receive
services and improve access to rights and entitlements.

Awareness: Community awareness is an integral part of the implementation strategy. Initially, the
project will conduct a regular awareness session with group members. SHG members will be aware
on health, food and nutrition, WatSan, child rights, gender, rights, family planning through
conducting group meeting & information sharing meeting.

Project Management

A project steering committee will be formed including CD, HOP, LGI, community representative,
PDMER, finance rep. Program Manager, and Project manager. The committee will meet on a
quarterly basis. The committee will be authority to provide directions for putting the project on the
right track. The project would be executed by and under the technical and administrative supervision
of IR Livelihood Program following IR rules and procedures. In field level, one Community
Organizer will cover the total 300-350 group members under the close supervision of Project Officer.
The IRB Microfinance Expert will provide technical, strategic, administration and other management
guidance to run the project smoothly at the field level and liaise with all the international and

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 national departments and/or donors concerned. The Project Officer will conduct regular supervision
and monitoring of the project. The Project Officer as well as Program Manager/Microfinance Expert
will produce project narrative and detailed reports in half-yearly and annually.

Risk and assumption

A rapid appraisal and analysis by the technical team (headed by IRB Microfinance Expert) identified
the following distinguishing features as characterizing the rural areas of in Rangpur district. The
features may pose risks and challenges for the project intervention.

They constitute poverty of the project participants, seasonal migration, assets loss and natural
disaster. These often result in repayment default, limited opportunities for risk diversification which
may hinder achieving project objectives. Project management will take measures to mitigate
potential risks of the project. Project will select 100% women as project participants to avoid
seasonal migration as male bread winning members of families migrated to big cities in quest of job
during lean season/ Monga (seasonal food crisis) period of the year. Technical support service will
be provided to the enterprises of members. Project management will seek local technical persons for
the best services to produce high yield of the enterprises so that beneficiaries get maximum profit
from their investment.

Local government representatives and local political leaders can interfere in households/project
participants selection process. The project will follow a solid methodology from the beginning to end
of the whole selection process based on preset transparent selection criteria and participatory process.
The project management will maintain regular communication with relevant local stakeholders and
involve them in the whole selection process. Ensure appropriate verification from various levels
before finalization of the households list.

Political unrest like strikes, hartal etc. may limit staff movement and interrupt timely implementation
of project activities. In that case project people will work on the weekend and do extra work during
normal day to ensure smooth and timely accomplishment of project activities.

Sustainability
The project support will create impact significantly upon the target households, groups and communities
level. Capacity of target project participants will improve through providing skill training and intensive
hands-on support, which increase productivity of asset. The project is designed to impact on household’s
income and livelihood. Improving social coherence and social inclusion of target project participants
through involving with project interventions will reduce socio-economic inequality and injustice. An
increase in access to services of the project participants through creating linkages and networks with
private and public services providers. The target group, especially women and socially marginalized
people will be empowered through building capacity and awareness. Social acceptance and dignity of the
project participants will also improve by ensuring community participation and enhancing leadership
capacity.

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 Economic and Financial sustainability: The project will seek to facilitate financial sustainability
through 3 different aspects. The project will initiate a community-led savings mobilization process
just after formation of the SHGs. The project is expecting to raise the group savings amount to a
considerable amount so that after the end of the project, individual households can easily access
essential financial support to scale up IGA and coping and managing shocks and disasters. Each of
the asset recipient household will have to repay their asset cost as per repayment schedule. The
repayment amount will be deposited in the SHG account and will be utilize capital fund of self-help
financing capital fund in future. The capital will support them to scale up their IGA. Increase
households’ income and productive asset: The project is expecting to increase selected households’
skill, income and productive asset base in a considerable level which sustainably ensured households
livelihood and income security after end of project period through scale up and reproduction.

Financial sustainability of the project is sought through building the capacity of the SHGs to manage
the project financially in an independent and cost-effective manner. Given the revolving nature of
MF funds, ensuring high repayment rates through reducing moral hazard by using social collateral
will be an integral part of this project’s financial sustainability strategy. The mark-up will be utilized
to finance the fund management of re-lending the recoveries of previous loan cycles.

Budget of the project

The total budget of the project for two years is 300000 BDT

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