Iain Guest

Iain founded AP in 2001 after many years of writing about and working with civil society in countries in conflict. He was a Geneva-based correspondent for the London-based Guardian and International Herald Tribune (1976-1987); authored a book on the disappearances in Argentina; fronted several BBC documentaries; served as spokesperson for the UNHCR operation in Cambodia (1992) and the UN humanitarian operation in Haiti (2004); served as a Senior Fellow at the US Institute of Peace (1996-7); and conducted missions to Rwanda and Bosnia for the UN, USAID and UNHCR. Iain recently stepped down as an adjunct professor at Georgetown’s School of Foreign Service, where he taught human rights.

BERDO’s Micro-credit Model

13 Aug

Barisal, August 13, 2008: Our boat arrives at the port of Barisal with a thud, in the pouring rain. Small children – waste-pickers – scurry in and out of cabins collecting empty bottles, which are piled up on the jetty for recycling. We stumble off the boat, bleary-eyed and short of sleep.

It’s a short car-ride to the BERDO office, where the staff is waiting. The wood fire is soon blazing and filling the office with acrid smoke. Sweet milky tea is offered. Outside, the rain has stopped and the streets are suddenly full of people running down the streets and chanting slogans. Local elections are in full swing. They will shortly be electing a new mayor.

Barisal is one of three BERDO microcredit centers. The model works as follows. Responding to requests, BERDO will establish a group of between 20 and 25 individuals, who will then qualify for a loan. Throughout the country, BERDO currently gives out loans through 136 different groups. There are 59 groups in the Barisal region, with about 800 members. Around 550 people are currently receiving loans.

Observing our meeting

When the program started, in 1995, BERDO decided to lend only to disabled people. But it was only able to find two or three beneficiaries in each village, and almost no-one turned up for meetings. Based on this, it was decided to extend the program to poor women, regardless of any disability. In any one group, about a quarter of the beneficiaries are likely to be disabled. Children qualify, although their loan is managed by their parents or guardians.

The aim is to help disabled people invest in something that will bring them a regular income – a cow, a rickshaw, or a small shop. But in the process, says Saidul Huq, they should acquire confidence and turn away from begging.

As the program has expanded to poor women, its goals have become more ambitious. By encouraging these women to work alongside disabled people, BERDO hopes to make them more accepting of disability. Disabled people live in the shadows, says Saidul. Many are afraid even to leave their homes. “Society is ashamed of disabled people and feels they are cursed. But everyone knows someone with disability, or has some disability in their family.”

Neither of these two goals is easy, but a third aim seems positively utopian. BERDO hopes that its micro-credit program will serve as a tool for development. It’s hard to see how this could happen, in a country of such overwhelming needs.


The money for loans comes from banks. BERDO borrows at 10% and lend at 12.5%, to cover the administrative costs. Last year BERDO disbursed 280,000 taka ($4,059) in Barisal.

Once a beneficiary is chosen, he or she signs a single piece of paper. But the terms are quite tough. Repayments begin with two weeks, unless the loan is for a longer-term agricultural loan, in which case it can be repaid at the end of the harvest. Joining a group is a precondition for receiving a loan, and the groups meet every week with a BERDO staffer in attendance. The groups select their own leader, who serves for a year.

BERDO offers four days of “motivational training” when a group is formed. Motivation means that beneficiaries are encouraged to invest wisely and save; mothers are encouraged to send a disabled child to school; husbands are encouraged to support their wives (who received the actual loan); teachers from the local school are encouraged to accept disabled children into school. Group leaders are also given leadership training.

It is now well established that women can make good use of micro-credit, but some of this is quite bold. I’m interested in how their husbands respond.

Measured by repayments alone, the program is a striking success. Ninety-nine per cent of the loans are repaid, and on time. The rate has fallen to below 90% in the areas affected by last year’s typhoon, and BERDO has postponed the collection for a year. But overall, it is working. And there is no difference at all between the disabled and others – at least in terms of repayments.

As a result, the program is attracting growing support. It has received a series of one-off grants to help cover costs, from the Rabbo Bank in Holland, Cordaid (the Dutch agency), OPEC in Austria, and the Danish embassy in Dhaka. The latest to come on board has been the World Bank, through a foundation, which has given 100,000 taka. If the Bank comes through with a second grant, it will enable BERDO to lend at a much lower interest rate.

All of this suggests that the first big question has been answered: disabled people can use micro-credit as effectively as the next. But what of the other members of the groups? Are they more accepting of disability? And can this program make inroads into some of the larger development challenges?

We hope to put these questions directly to some beneficiaries here in Barisal and in the neighboring district of Banari Para.

Filed under: Bangladesh | Tagged: Advocacy Project, Bangladesh, BERDO, blind, micro-credit | Leave a comment »

Posted By Iain Guest

Posted Aug 13th, 2008

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