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MESSAGE FROM THE CHAIR

Integrated Development Foundation (IDF), from the very beginning, has been working with the hilly but poor people of the Chittagong Hill Tract districts and focused its activities primarily on microfinance. The purpose is to bring about an improvement in the overall socio-economic conditions of these disadvantaged people. It was initially a difficult task working with almost un-covered and un-served population living in such remote and difficult areas. IDF feels proud for successfully overcoming all challenges and difficulties and go ahead with its declared vision and mission.

Over the years, along with microfinance, IDF pursued the policy of integrated approach of rural development and encompassed the areas of other aspects like health, education, agriculture, renewable energy, housing, human rights/democracy & governance, disaster management and so on. IDF, along with gradual expansion of program activities, also expanded its area of operation and started serving now the rural poor of seven districts in Bangladesh. IDF is considered as one of the largest MFIs in the south-eastern part of the country in terms of both membership and geographical coverage.

The performance of the dedicated staff, supports of all donors, assistance by executive & general bodies and cooperation of the well wishers of IDF have significantly contributed towards this achievement.

It is heartening to note that the present status of the details of these activities with the growth trends in the past years have been reflected in the IDF Annual Report 2007. I congratulate those who had done the hard work of preparing the report. I do believe that the readers will get an insight of IDF activities through this report. However, any suggestions from the readers will enable us to enrich the quality of the report in future.

A. K. Fazlul Bari
Chairperson, IDF


IDF Mission

Combating poverty in the Impassable Hilly Region and other un-served areas of Bangladesh in order to create a poverty free Bangladesh.


NOTE FROM THE EXECUTIVE DIRECTOR

IDF completed 14 years in 2007. The experience of 2007 is mixed. It is our pride that US based Forbes magazine rated IDF in 2007 as one of the top 50 MFIs of the world and 6th in Bangladesh. In 2007, CIDA enriched the list of IDF Development partners to work with birth and marriage registration in CHT-a new dimension for IDF. NGO Foundation joined us to improve the water and sanitation condition of the poor people of CHT.

However, 2007 was not pleasant year for Bangladesh in General and microfinance sector in particular. The natural calamities, rat floods, price-hike and eviction brought more people under poverty in 2007.

IDF faced added problem as it works in remote, difficult, hilly and poor areas. IDF experienced severe problem in two upazilas of CHT region in 2007 due to poor law and order situation there. Despite this adverse situation, IDF maintained a steady sustainable growth in 2007. The total increase in membership. Loan portfolio and members savings in 2007 were respectively 5,412 (8.62% increase on 2006), Tk.85.44 million (26.09% increase on 2006) and Tk.27.67 million (16.84% increase on 2006). The repayment rate dropped slightly from 99.98% to 99.92% in 2007 because of problems mentioned above.

The steady sustainable growth as well as recognition by internationally reputed Forbes magazine was possible because of commitment and hard work of all IDF staff members and sincere cooperation of our development partners and local social leaders of our working areas. We are very grateful to Grameen Trust, Sida, Helen Keller International, PKSF, GF USA, CowBank (Australia), Basic Bank, Sonali Bank, BRAC Bank, Government of Bangladesh, IDCOL, CHT Regional Council, NGO Affairs Bureau, CHT District Councils, Deputy Commissioners, Upazila Nirbahi Officers and low Enforcing Bodies for their supports and cooperation.

We are also grateful to our Board Members for their active support in implementing various programs. We cordially thanks our founder and life members for their active and positive role in policy making.

We hope continuous support from our friends, partners and well wishers to our endeavors of fighting against poverty.

Zahirul Alam
Executive Director, IDF


Microcredit Summit Champaign's Goal

• 175 million of the worlds poorest families, especially the women of those families, are receiving credit for    self-employment and other financial and business services by the end of 2015; and

• 100 million of the Worlds poorest families move from below US$ 1.00 a day adjusted for purchasing power    purity (PPP) to above US$ 1.00 a day adjusted from PPP, by the end of 2015.

INTRODUCTION

Integrated Development Foundation (IDF) is a non-profit, non-political and a non-government organization established in December 1992 by Mr. Zahirul Alam, a former ILO staff member; and founder member-secretary of the Rural Economics Program of the Department of Economics in the University of Chittagong from where Grameen Bank Microfinance Model was developed by Nobel Laureate Prof. Professor Muhammad Yunus in the 1970s.

IDF started its journey with micro-finance program in Chittagong Hill Tracts (CHT) in a small para (sub-village) of Shoalok mouza of Bandarban Hill District in 1993 with a seed capital loan of US$ 7,500.00 from Grameen Trust. The people found IDF’s micro loans very useful within one year. Thus the seed capital received from Grameen Trust was very small to meet the growing demand of micro-loans of the area. As a result, IDF approached various donors for support to meet this demand as advised by Prof. Muhammad Yunus. Swedish International Development Co-operation Agency (Sida) responded immediately and supported IDF for the experiment and expansion of Grameen Bank Model in the whole of the CHTs area in the framework of a long-term (8 years) sustainable plan. IDF implemented the project successfully, which subsequently attracted other donors and partners including various ministries of the Government, PKSF, ILO, Helen Keller International (HKI), UNICEF, CARE, AusAID, IDCOL, Grameen Foundation USA, Deutsche Bank, CowBank (Australia), Basic Bank, Sonali Bank and Bangladesh Krishi Bank and others.

VISION

To make Bangladesh poverty free.

MISSION

Combating poverty in the impassable hilly regions and other un-served areas of Bangladesh in order to create a poverty free Bangladesh.

OBJECTIVE

The main objective of IDF is to assist the poor, the landless, the destitute women and children, small farmers and disabled persons in order to enable them to gain access to resources and undertake various income-generating and other activities for poverty alleviation and to enhance their quality of life in terms of health, nutrition, sanitation, education, safe water, housing and the environment through building effective institutions of their own, which they can understand and operate and can find socio-economic strength in it through mutual support.

GOVERNANCE

The supreme authority of IDF is General Body. It is composed of 18 members from different professions. A Governing Body consisting of 7 members is elected from amongst the General Body of the Foundation. The General Body is the highest policy and decision making body of IDF. The Governing Body is responsible for the formulation of plan and budget for the programs and projects to be implemented by the organization. The Governing Body evaluates and monitors the implementation of policies, programmes and projects through various monitoring tools and visits to the project areas. A Chairman elected by the General Body heads both General and Governing Body.

The Executive Director works as Member-Secretary of both the Bodies.The Executive Director is the Chief Executive of the Foundation and responsible for the smooth implementation of all activities of the Foundation. He implements the activities through the appointed professionals and support staff of the Foundation.

THE OPERATIONAL AREA

The present operational area of IDF is Chittagong Hill Tracts, Chittagong, Cox’s Bazar, Dhaka and Rajshahi. A brief description of the operational area is presented below.

Chittagong Hill Tracts

The Chittagong Hill Tracts (CHT) is a beautiful and strange piece of land with rocks, hills, lakes and sea. These are very difficult and remote areas, inhabited by about thirteen very poor tribes with different languages and cultures. The area is wedged between the Bay of Bengal and the hills of Mizoram of India.

The CHT is a 13,295 sq. km. region of hills consisting of Bandarban, Rangamati and Khagrachari districts located in the south-east of Bangladesh. As per the preliminary result of the Population Census 2001, the total population of CHT is 1.325 million; of which 52 percent are tribal people. Historically, Chittagong Hill Tracts enjoyed the status of a self-governing territory and administered by Hill King which continued until the British East India Company annexed Bengal in 1787. The Chakma Raja (King) then signed an agreement after a long armed conflict, under which Chakma territory became a British tributary on the payment of 20 tons of cotton. This was later extended to other parts of CHT. In 1860, the British formally annexed CHT and upgraded its status to a full-fledged district. The people of Chittagong Hill Tracts are very poor and they live mainly on Jhum cultivation and bamboo and wood collection from forests, which are major causes of deforestation and soil erosion in the area. Most people of this area live in absolute poverty. Despite of all the efforts of the government, the people of the Chittagong Hill Tracts still lack access to various services such as credit, agricultural inputs and extension services, medical facilities, sanitation and safe drinking water. This is mainly because of i) scattered population, ii) poor communication system, iii) remoteness of the area and iv) political problem. The language barrier further aggravates the situation.

The sentiment of the people of CHT was hurt when the construction of 666 meters long and 43 meters high hydroelectric dam at Kaptai started in 1957. The immediate impact of dam was the submergence of a vast area of natural forests and 54,000 acres of arable land (40% of total cultivable lands in CHT) of the area. It also made about 1,800 families homeless. The displaced people were not properly rehabilitated. As a result, their settlement and construction of new houses in the inaccessible regions led to rampant deforestation. It is also said that some families crossed the border and migrated.

Adverse economic impacts created by Kaptai Dam on displaced people gradually resulted in armed insurgency in CHT. The counter-insurgency measures by the then Pakistan Government through military action worsened the situation. The increased military presence in CHT and search for insurgents created unsettled situation among CHT inhabitants. It was a very tense situation when IDF started its micro-finance program in CHT in 1993.

Chittagong

Chittagong district is quite different from other districts in its unique natural beauty characterized by hills, rivers, sea, forests, and valleys. The greater Chittagong district was established in 1666 including the present Chittagong, Cox’s Bazar and the three hill districts. The district of Chittagong Hill Tracts was established in 1,860 with the hill regions of the district. Later, Chittagong district was further divided into Chittagong and Cox’s Bazar districts. The district consists of one City Corporation, 7 municipalities, 20 upazilas, 197 union parishads and 1,319 villages.

Cox’s Bazar

The area of Cox’s Bazar district is 2,491.86 sq. km. It is bounded by Chittagong district on the north, Bay of Bengal on the south, Bandarban district, Arakan (Myanmar) and the Naf River on the east, and the Bay of Bengal on the west. Cox’s Bazar thana was established in 1854. Cox’s Bazar subdivision was formed comprising of Cox’s Bazar Sadar, Chakoria, Maheshkhali, and Teknaf thanas. Afterwards, three new thanas (Ukhia, Kutubdia, and Ramu) were created under this subdivision. In 1984, the thanas were transformed into upazilas and Cox’s Bazar subdivision was elevated to a district under the decentralization scheme. It consists of 7 upazilas, 2 municipalities, 60 union parishads, 199 mouzas and 966 villages.

Rajshahi

The area of Rajshahi district is 2,407 sq. km. It is bounded by Naogaon district on the north; West Bengal of India, Kushtia district and the Ganges on the south; Natore district on the east and the Nawabgonj district on the west. Rajshahi district was established in 1772. It has one City Corporation with 4 thanas, 7 municipalities, 93 wards, 297 mahallas, 9 upazilas, 70 union parishads, 1,678 mouzas and 1,858 villages. Rajshahi town stands on the bank of the river Padma. It is both district and divisional town.

THE ORGANIZATIONAL STRUCTURE

The programs and projects are implemented at a number of levels including head office, area office, branch, centre and group. The head office and coordination offices provide guidance, and supervise and monitor the activities of branch offices. The branch offices work directly with the poor people in their area, organizing them with a view to building a receiving mechanism and implementing various socio-economic programs for them. The institutional structure of IDF is shown in Figure-1.

2007

Cum.

2007

Cum.

2007

Cum.

Beggars

60

196

0.04m

0.157m

0.0123m

0.0144m

Poor & Ultra Poor

5,135

67,161

81.87m

387.096m

25.5m

185.031m

Macro-enterprise

217

836

5.43m

25.656m

2.59m

6.862m

541

68,193

85.44m

412,909m

27.67m

191.907m

No. of Branch

12

12

24

No. of Member

60

136

196

Loan disbursed

0.06m

0.179m

0.239m

Loan outstanding

0.04m

0.111m

1.57m

Repayment Rate

100%

100%

100%

Amount savings

.0020m

0.0123m

0.0143m

No. of Branch

49

2

51

No. of Member

62,104

5057

67161

Loan disbursed

2640.81m

223.54m

2864.35m

Loan outstanding

305.22m

81.87m

387.09m

Repayment Rate

99.95%

99.92%

99.92 %

Amount savings

159.53m

25.5m

185.03m

Loan ceiling for

Ultra poor : Up to Tk.8,000
Poor : Tk 8,001 - 30,000

Ultra Poor with PKSF Assistance

The program covered 1,291 ultra poor families of 18 branches with seed capital from PKSF since November 2005. The particulars of the operation of PKSF funded ultra poor as of 31 December 2007 are presented below:

• No. of member : 1,291
• Loan disbursed : 14.03m
• Loan outstanding : 4.31m
• Rate of repayment : 100 %
• Amount of savings : 1.03m

8.1.3 MICRO-ENTERPRISE

IDF started this product for its graduate members who developed capacity to invest and manage bigger scale of income-generating activity (micro-enterprise) in 2002-03. The criteria of electing a member for this product are as follows;Criteria of micro-entrepreneur

• Graduate members who developed capacity to undertake enterprise;
• Received Enterprise Development and Business Management (EDBM) Training
• 90% attendance in the weekly/ fortnightly meeting
• Proper utilization of previous loan (100%)
• Good track record of business
• 10% of the proposed loan are accumulated in her savings account
• Willing to participate at least 10% of the investment in the enterprise
• Cooperation and involvement of family members in the enterprise
• Regular deposit in savings account
• Willingness to attend monthly cluster (20 members) meeting

Loan terms

• Working Capital : 01 year
• Fixed Capital : 02 years

Loan repayment conditions

• 1 month grace period
• Weekly installment
• Fortnightly installment
• Monthly installment

Risk Insurance

• Premium: 1% of the disbursed amount
• Risk coverage: 20% of the disbursed loan in case of the damage of the activity due to natural disaster.

Status as on 31 December 2007

No. of Branch

28

15

43

No. of Member

617

219

836

Loan disbursed

80.60m

61.69m

142.29m

Loan outstanding

20.22m

5.43m

25.65m

Repayment Rate

100%

100%

100%

Amount savings

4.27m

2.59m

6.86m

Sl. No.

01.

Member (by year)

26,411

6,581

61,06

6,196

7,722

9,765

5412

02.

Member (cum.)

26,411

32,992

39,098

45,294

53016

62,781

68,193

03.

Group (cum.)

5,626

7,099

8,425

10,048

11,874

13,842

16957

04.

Centre (cum.)

1,113

1,386

1,640

1,935

2,273

2,668

3016

05.

Branch (cum.)

25

27

31

37

43

49

51

06.

Union (cum.)

111

115

120

125

135

140

142

07.

Upazila (cum.)

28

33

33

34

34

34

36

08.

District (cum.)

5

5

5

5

6

7

7

09.

Savings (by year)*

12.26

18.14

20.76

27.30

26.16

40.08

27.67

10.

Savings (cum)*

31.79

49.93

70.69

97.99

124.15

164.23

191.90

11.

Average Savings (cum.)

1,204

1,513

1,808

2,163

2342

2792

2814

               Chart 1: Growth of members and borrowers by year        Chart 2: Growth of savings by year

Sl. No.

01.

30,100

31,491

40,470

49,897

56329

64,423

35649

02.

104,186

135,677

176,147

226,044

282,737

347,160

382809

03.

24,619

31,003

36,580

42,144

49,854

58,445

63176

04.

146.84

202.54

248.50

337.52

433.02

561.79

763.89

05.

398.87

601.41

849.91

1187.42

1620.44

2202.23

2966.12

06.

125.41

174.02

212.56

303.61

385.26

485.85

680.45

07.

313.94

487.96

700.52

1004.13

1388.99

1874.84

2555.29

08.

125.27

174.02

212.41

303.56

384.77

486.27

678.44

09.

313.75

487.77

700.17

1003.73

1388.50

1874.77

2553.21

10.

21.56

28.52

36.10

33.96

48.24

95.52

85.44

11.

85.12

113.64

149.74

183.70

231.94

327.46

412.90

12.

138,000

4,300

155,800

50,300

80,600

43,800

16,36,500

13.

193,900

198,200

354,100

404,400

485,000

441,200

20,77,700

14.

4,878

5,837

6,140

6,764

7,687

6,343

7748

15.

3,458

3,665

4,093

4,359

4,653

5,837

6,535

16.

99.87%

99.99%

99.93%

99.96%

99.96%

99.98%

99.92

17.

99.94%

99.96%

99.95%

99.96%

99.96%

99.98%

99.92

                     Chart 3: Growth of loan disbursement by year     Chart 4: Growth of loan outstanding by year

                     Chart 5: Growth of Capital Fund by Year     Chart 6: Growth of Income & Non financial Expenses

Chart 7: Self Sufficiency status by year

Sl. No.

Purposes

01.

Farming

17.18

19.84

16.85

12.05

14.41

15.21

9.64

02.

Cow rearing

16.19

15.60

13.83

11.75

10.05

7.92

9.80

03.

Goat rearing

2.67

2.54

2.37

2.22

1.00

1.08

1.95

04.

Beef fattening

3.68

6.28

5.23

5.81

8.26

7.55

7.03

05.

Pig rearing

1.54

1.28

1.53

2.12

1.22

1.46

1.48

06.

Poultry

2.49

3.95

3.99

4.82

4.31

3.67

5.12

07.

Home Gardening

1.40

0.48

0.69

0.87

0.91

1.09

1.35

08.

Fruit gardening

1.62

1.02

1.73

1.80

2.05

1.15

1.49

09.

Nursery

1.68

0.83

1.96

1.32

1.11

1.02

1.47

10.

Handicrafts

3.50

1.90

3.25

3.17

3.98

3.14

3.36

11.

Garments/Tailoring

3.86

3.41

4.21

4.50

3.19

2.47

3.51

12.

Fisheries

0.78

2.60

3.06

3.07

3.65

3.75

9.43

13.

Housing

1.13

1.22

0.98

0.68

0.61

1.66

1.23

14.

Water Sanitation

0.83

0.58

0.98

0.71

0.82

.80

1.77

15.

Local transport

5.62

8.75

7.98

12.31

9.40

7.66

9.28

16.

Small Business

35.83

29.74

29.18

28.48

29.21

37.36

27.60

17.

Micro Enterprise

-

-

2.18

4.32

5.82

3.00

4.50

100.00

100.00

100.00

100.00

100.00

100.00

100.00

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