Islamic Relief, Bangladesh

Project Proposal

on

Poverty Reduction of Vulnerable Households through Small Scale Enterprise Development (PROVED) project

Project Duration:18 Months

Location Rangpur District in Bangladesh

Submitted byIslamic Relief, Bangladesh House-10, Road-10, Block-KBaridhara, Dhaka, Bangladesh

Submitted toIslamic Relief Worldwide

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Table of Contents

1. Summary of the project..............................................................................................................3

2. Relevance of the project............................................................................................................4

2.1. Problem statement................................................................................................................. 4

2.2. Project Strategy:.................................................................................................................... 5

2.3. Rational of financial services through Islamic principles:.......................................................5

2.4. Islamic micro-financing through self-help group:....................................................................6

2.5. Description of project participants, their needs and how the needs will be addressed:..........7

3. Objective and result description.................................................................................................8

4. Description of the interventions................................................................................................10

2.6. Activities for result-1;............................................................................................................10

2.7. Activities for result-2;............................................................................................................14

2.8. Activities for result-3;............................................................................................................16

2.9. General activities................................................................................................................. 18

5. Implementation strategy...........................................................................................................21

6. Project Management................................................................................................................22

7. Gantt chart............................................................................................................................... 23

8. Risk and assumption................................................................................................................24

9. Sustainability............................................................................................................................ 25

10. Logical framework matrix.........................................................................................................26

11. Budget of the project................................................................................................................28

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1. Summary of the projectTitle of the project Poverty Reduction of Vulnerable Households through Small Scale Enterprise

Development (PROVED) projectObjective of the action

Overall objective: To contribute towards achieving MDG1 (reduction of poverty and hunger) through improving livelihoods of the rural poor people in North-West part of Bangladesh.

Specific objective: 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 programmes.

Project Location Rangpur District in BangladeshProject participants 4500 poor households in Rangpur district of Bangladesh.Proposed results 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 lesson learning to strengthen Islamic Relief, Bangladesh’s small scale enterprise financing initiatives and influence policies related to Islamic micro-finance.

Key activities Key activities for achieving result 1: - Community consultation, need assessment, project participants identification.- Formation and strengthening Self-Help Group (SHG).- Awareness building of Self-Help Groups.- Capacity building of SHG members/leaders. - Institutionalization of SHG.

Key activities for achieving result 2: - Conduct livelihood assessment to identify locally available and feasible farm,

nonfarm IGAs (NOTE: this baseline will be used to measure programme impacts).

- Develop household level business plan.- Conduct skill transfer training based on TNA.- Livelihood assets support on revolving basis for SHG members. - SHG-led Islamic micro-financing. - Conduct regular monitoring and follow-up.

Key activities for achieving result 3: - Organize training on Islamic microfinance for staff/practitioners (IRB and outside) - Organize seminar on Islamic microfinance (regional and national level). - Update Islamic Relief Bangladesh’s microfinance manual. - National level policy dialogue and advocacy on Islamic microfinance issue. - Conduct Shariah Audit.- Develop MIS software. - Pilot for creating online lending platform on microfinance. - IEC materials development and publication.- Lesson learning documentation.- Conduct research work and publish working paper on Islamic micro-finance.

General activities: - Staff recruitment and capacity building.- Office set-up- Conduct baseline survey. - Conduct midterm review and final evaluation. - Coordination, communication and visibility activities.

Project Duration October 2012 to March 2014 (18 Months)Expected Budget 260,000 GBP

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Donor DFID through PPA

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2. Relevance of the project

2.1. 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.

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2.2. Project Strategy:

In addressing the key challenges identified in the PPA Islamic Micro Finance strategy (Draft March 2012), this project will seek to provide a pathway to facilitate the development of IRW’s capacity, through its Bangaldesh field office, to conceptualise, deliver and assess the impact of innovative microfinance programmes that demonstrably reduce poverty, are sustainable, replicable, coherent and Shari’ah compliant within the context of IRW’s sustainable livelihoods approach.

A particular problem that this strategic intervention seeks to address is the sustainability of microfinancing, where institutional models with a welfarist approach have led to a rapid erosion of the revolving fund due to high operational costs. In this context the PPA Islamic Micro Finance strategy offers three models that seek to address this challenge and here in particular the village banking or self-help group approach will be piloted.

Islamic Relief Bangladesh started microfinance programme in 2001. Gradually small scale microfinance programme expanded. Since 2005, the programme has been operating through institutional microfinance approach with Islamic Microfinance principles. In 2011 IRB changed its microfinance operational strategies and is trying to experiment on Self Help Group based Islamic Microfinance approach side by side to have a good idea about which approach is effective for IMF. IRB applied for its microfinance business license to Microcredit Regulatory Authority (MRA). This license will allow IRB to continue its microfinance business and at the same time will give opportunity to# inject new funding. If IRB is not secure MRA license then SHG model would be best option of IRB to operate Islamic Microfinance in Bangladesh.

2.3. Rational of financial services through Islamic principles:

Islamic financing is an emerging concept in Bangladesh, although Bangladesh is the home of microcredit and it has been started in 1970s; at present there are thousands of active Microfinance Institutions (MFIs) working for poverty eradication but unfortunately still poverty is a central ailment for over all development and it has not been declined significantly. MFIs role in poverty reduction in Bangladesh is debatable, it is because of they are still charging high interest and aggressively increase their commercial mentality for profit making rather holistic approach for improvement of poor lives. The interest rate still very high, they are hardly care about the spiritual, moral and ethical dimension of the rural/urban poor but it is the important issues in the all aspects of human life.

As Islam has a complete code for all mankind, it might be applicable in every sphere of life whether business, service or any other parts of human life. It has also placed central focus on poverty alleviation to establish dignity and self-reliance through a consciously participatory development agenda. But still Islamic microfinance initiatives in Bangladesh are very few. Further, these few institutions are not integrated into the formal financial systems. Islamic microfinance initiative can display wide variations in the models, instruments and operational mechanisms. While, in terms of reach, penetration and financial ability, Islamic microfinance institutions lag far behind their conventional counterparts they certainly have potential to score better in terms of richness and variety.

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Islamic microfinance institutions similar to conventional microfinance institutions, use group financing as a substitute to collateral, have a high concentration of women beneficiaries and aim at alleviation of poverty in all its forms (Obaidullah, 2008).

In considering the above issues, Islamic micro-financing is an opportunity for Muslim countries especially in Bangladesh, where a good number of Bangladeshi citizens like to practice in their economic activities through “Shariah” based Islamic financial system. Islam has prohibited riba but encourages trade for profit. According to Al-Quran “Allah (SWT) will deprive riba of all blessing, but will give increase for deeds of charity: and Allah (SWT) does not love the ungrateful and unjust. The Holy Quran declares trade to be lawful means of livelihood and riba is forbidden (Al Baqarah, Part of Ayah 275) for being oppressive and exploitative. The Islamic Microfinance models have been formed through the concept of shariah based Islamic finance i.e. Mudaraba, Bai- Muajjal, Murabah, Ijara & Bai-Salam. All these models have so far been proved as feasible way of financing in the Bangladeshi context at the micro level.

2.4. Islamic micro-financing through self-help group:

IRB has been working in Bangladesh since 1991 and has also promoted sustainable livelihood for the most vulnerable sections of society in the Rangpur District of Bangladesh through promoting small self-help groups that are either linked to other local financial institutions or are working on their own wherein the group members work in a spirit of cooperation and mutual support in times of distress. However the experience shows that access to any productive resources and/or assets is very limited for the poorest households. Since they are not able to earn regularly, they struggle to maintain the regular instalments required for debt-servicing of any micro-loan. As a result, they remain out of the reach of microfinance initiatives (MFI) or are actively pushed out from MFI by the others who might be relatively alright financially. Their plight is more serious during the lean season, any health emergency, any social commitments/events of the rites of passage or any natural hazards; they are often forced to borrow from local money lenders – or mohajan – on punitive rates of interest. There are times when many such households have to even borrow for their basic needs of food and thus they remain in the vicious-cycle of chronic indebtedness and remain poor.

IRB has been providing financial services to self-help group through Islamic micro-financing. The members of self-help groups are excluded from conventional commercial financial services since most are too poor to offer much - or anything - in the way of collateral. IRB extends financial services (through self-help group) to people who are otherwise very poor to qualify for conventional bank loans. Islamic Relief Bangladesh (IRB) provides financial services according to the Islamic financing principles. Group members of self-help group are provided financial support on Islamic sharia trade approach Murabaha, which is a cost plus mark-up and Qard al Hassanah (Free of profit) and a general savings product in the form of Mudaraba.

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2.5. 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.

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.

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3. 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 programmes.”

The objectives will be sought to be addressed through achieving the following results:

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

The poorest households are isolated from social networks or groups in community. They are being neglected by influential peoples within social power structure. They have less capacity to be involved in decision-making and leadership process. The targeted households are socially, economically, and politically neglected. They have very little awareness and confidence in raising their voice and access to their rights. More critically, elderly single women and persons with disability are struggling with severe hardship and are excluded by mainstream society. The poorest groups of peoples are deprived from govt. and other services because of lack in transparency in the process of service delivery.

It can be argued that women’s economic empowerment is a precondition for sustainable development and pro-poor economic growth due to their dual reproductive and productive role in society. But their contribution unrecognized in society. Women often have very little control over income and expenditure at household level. Access to and control over productive resources is unequal between women and men. This project seeks to target women as the key project participants, as they are underprivileged in the family and society as well. Due to traditional power structures and gender discrimination, they are deprived and neglected socially, economically and politically. Women participation in formal economic activities is very little recognized at grass-root level. Women don’t know about their rights; they are voiceless and not organized in a common platform. Their skills level is also inadequate to engage themselves in formal productive and income generating activities.

This project expects to unite 4500 poorest households in collective participation and action, raising voice, social inclusion, and enabling them to claim their rights. This result will be achieved by creating a platform of poorest households in the community through self-help groups, building their capacity, and institutionalizing the groups. Also their awareness of different right based issues will be raised. Besides, linkage and coordination with different service providers will be established by which entitlements and engagement will be enhanced. The proposed project expects to advance women’s rights and empowerment through their capacity and unity building. Moreover, the proposed project expects to enhance knowledge and skill of the project participants.

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

Household’s income and livelihood means of the poorest households in the proposed areas is very limited because of their lack of capacity for purchasing productive asset, limited capital for investment etc. Gender inequality, lack of awareness & knowledge, little access to services and resources, absence of collective economic activities, backwardness in technologies and techniques etc. are, amongst others, the factors for their low income.

The proposed project expects to create new income sources for targeted households. For achieving this result, the project will assess and analyze possible livelihood options of the targeted households. Based on household’s needs skills, assets and extension support will be provided among the households through Self-help groups (SHG). The SHG will be the common platform for the households to enhance their economic activities and diversify options of income generation. The capital amount of distributed assets will be realized in installments and will be revolving at self-help group fund. Self-help micro-financing at group level will support them to create their own capital and increase income.

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.

Islamic microfinance is an emerging issue in Bangladesh while the impact of interest-based conventional microfinance has increasingly been debated in terms of poverty reduction. High rates of loan interest, commercial objectives of microfinance institutions (MFI) and other issues like pressure for repayment in abnormal conditions of beneficiaries, profit mode of micro-financing and fund transfer to other profit making projects potentially make conventional microfinance less pro-poor. Islamic microfinance can be an alternative model of poverty reduction financing. Commercial banks are expanding their Islamic banking operations but still there is limited scope of Islamic microfinance in the overall microfinance market in Bangladesh. More action research and learning are required for modeling Islamic microfinance in the Bangladesh context. The project will initiate a participatory learning process so that critical issues of programming will be identified and can be shared with a wide range of stakeholders. The process will also advocate to promote Islamic microfinance in Bangladesh as an alternative development finance approach at the grassroots level. As an overall result, the project expects to strengthen the Islamic microfinance program of Islamic Relief Bangladesh.

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4. Description of the interventions

2.6. 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

4.1.1. Community consultation, need assessment, project participants identificationCommunity consultation will be the entry strategy to mobilize community and create common interest to move forward for their self-development. The trained project-staff will facilitate community consultation using PRA tools (transect walk, community meeting, key informant interview, social mapping, focus group discussion, wellbeing analysis, consensus building meeting, community planning). Participation of all level of peoples will be ensured in PRA. In the process of PRA, the community’s problems will be identified and aid them to articulate priorities. Wealth ranking will facilitate the identification of the poorest group of households who may be included as project participants. Generally, following criteria will be followed to select project participants:

- Poor and marginalized women (age – 18-50 years) who are active in economic activities, who are landless or own 05-50 decimal cultivable land.

- Bottom-line households in the targeted community.(who are under upper poverty line)

- Do not have significant productive (cattle, cultivable land) assets.- Income level is low and irregular (less than 1 US$ per person per day - PPP)- No scope of savings and limited access to traditional micro credit- Day laboring is the main occupation.- Do not have sustainable livelihood options (irregular daily labourer or

seasonal agricultural labourer)- Face food crisis round the year or in particular period- Do not have adequate skills and capital to improve livelihood; (no capital to

start petty business and are unskilled laborer)- Are not united to build networks and attend rights. (they are unaware of their

entitlements)

4.1.2. 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 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

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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.

SHG dynamics: The proposed project will form the SHGs with targeted project participant households (existing 3000 HH and new 1500 HH). A SHG group will consist of between 20-30 members. A committee will be formed with four persons among the SHG members in a transparent process by an election process democratic manner which will be called as managing committee, who are responsible for group activities (group meeting, group activities, organizing weekly meeting etc.). Around 225 groups will be formed or rearranged to include 4500 women representatives from poor households. Although members are self-selected but must fulfill the selection criteria, particularly targeting disadvantaged groups as identified above. Community Organizers of IRB will play key role in selection process. Once SHG members are selected by themselves through a consultative process based on selection criteria, then the CO/Project Officer will approve the newly- formed groups. Household’s profile form will be filled up which contains economic/ wealth information with other information and preserve it for further evaluation purposes. The group completes an orientation on group procedures, savings & credit policies of Islamic Relief (use of group fund) in the first 4 weeks of the formation of the group. During the orientation sessions the group completes organizing small groups and determines the management committee and thus a process of institutional building will be happened. In the four weeks meeting time group members will contribute savings to their SHG account. In the first four weeks meeting time, comprehensive works need to be completed and project staff will simultaneously complete the process of project participants training needs assessment, be informed whether they have skills in particular IGAs. Selected group members will be provided training and orientation on different IGAs. SHG members will be taught technical skills and business development plan skills in the training sessions and also CO will guide to develop their management skills during four weeks orientation time. The group dynamics of SHG will be:

- Islamic values of brother/sister-hood improve cooperation among the group members.

- Proper IGA for the individuals. - Social Development Program(s) integrated with the livelihood support in the

same geo-cultural area.

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- Behavioral, ethical, and social aspects are addressed in light of Islamic teachings.

- Benefitting the whole family through women.- Dealing with Arrears/Default is less aggressive and use Islamic teachings to

recover the money of loans.

Number of Self-Help Group members: The project will cover total 4500 group members under around 225 Self-Help Groups. The coverage of group members under this project will be-

Particulars of SHG members Numbers of SHG members New SHG members 1500Community Action Project (CAP) group members 1200Middle East funded SHG 900FISCAL’s SHG 400SAFOLLO project’s SHG 500

Total: 4500

Functioning Self Help Groups: Three representatives have to be selected from each SHGs for mere guiding purpose. They will be elected to serve for a one-year period. A proper financial record of each group has to be kept and maintained by the SHG’s members. They have to maintain a joint account in the name of their group in any of the banks/MFIs nearby (preference to the Shariah based financial institution, where available). The main focus of this project is that they develop and flourish by making other sub units under them and taking up its administration all by themselves. The major duties of the group members will be:

- As the representatives they have to guide their SHG members and motivate them to participate actively in the program.

- The representative should take care that all the members’ opinions are taken or given consideration during their meetings.

- They have to keep a proper record of all the programs done and planned by the team. They also have to check the accounts and other records are kept by the team regularly.

- The representatives should take part in the meetings held in project office. They should convey to team members about the new ideas discussed and adopted there.

- They are to act as the intermediate between the teams and other external bodies like government, bank & etc.

Livelihoods and financial services for Self Help Groups (SHGs): The IR Bangladesh Project implementation team will work closely with the SHGs from the beginning of group formation; will arrange orientation for group members; facilitate for preparing group’s policy and bi-laws; conduct training need assessment; impart need based training etc.

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IR Bangladesh Community Organizer (CO) will present of each SHGs in weekly meeting and observe the process and activities, however s/he will not interfere the process and will not influence in any decision making. In every month at the project office there will be a review meeting where all findings of the SHGs will be discussed and make new guidelines if there is any need to change policy and procedures. This guideline will be discussed with SHGs members of each group in need basis.

After a four-week orientation session of the SHG meeting, group members can apply for assets/goods which they intend to do business with, members of the group who apply for goods/assets must be present in the consecutive 4 weeks meeting to fulfill the criteria of qualifying for loans. Community Organizer will be responsible for preparing appraisals and project officer will verify and after verification PM/MF Expert will approve to procure income generating assets for the members. Goods with the approved amount will be purchased through a “Goods purchase Committee” comprising with community organizer, group member herself and one group leader of the SHG. CO/PO will take initiative to give them information regarding market facilitate and other information. Livelihood assets support fund will be given to the group as following conditions and processes:

- Initially, income generating asset will transfer instead of cash amount.- All the members will be given the same amount for IGAs.- In generally, the support will provide for investing income generating activities

such as cow rearing, goat rearing, vegetables cultivation, rice cultivation, rural transport (rickshaw and van pulling), small trading, paddy husking, rural handicrafts, tailoring, food processing etc.

- Funds will be provided to SHGs without any profit requirement, although the SHG in turn will finance in the murabaha mode (mark-up sale).

- Group members will repay the amount in weekly basis in the meeting and deposit to the SHG account nearby bank/MFI.

- No arrears would be allowed. - Project management will determine the additional fund whether required or

not.- All the collection money should be deposited into the bank on the same day.- Record should be kept for all the payments by the group ledger book- CO will verify the accuracy of the repayment and bank deposit in every week- Permission will be sought from the project management if there is any need to

withdraw any amount from group account.- An agreement will be signed between the project management and every

SHGs separately which contains the details how to use the fund and when the group will be owner of this fund.

4.1.3. Awareness building of Self-Help GroupsAwareness sessions would be organized with the participation of the targeted community. SHG members will attend each session which will be conducted on a weekly basis at group level. A session module will be developed on need-based issues for conducting awareness session. Project staff will conduct the session and

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will continue household follow-up on the discussed issue in session, so that the discussions can taken into practice level.

4.1.4. Capacity building of SHG members/leadersThe project team will arrange capacity building training for the SHG leaders to make them self-reliant in terms of running the SHG functions. Separate training courses on leadership, SHG management and financial management will be organized from time to time. A three-day long training on SHG’s operational and financial management a will be conducted every year. Three members from each SHG from each course will receive the training. The project staff will be mentoring the trained leaders/members to utilize their knowledge in a practical way for the betterment of the groups.

4.1.5. Institutionalization of SHG The formation and capacity building of SHGs will be facilitated at each community level. Various capacity building and hands-on supports will be provided to build SHG’s institutionalization as well as self-functioning to mobilize and manage resources, improve livelihoods of poor and extremely poor households and link them with relevant public and private service providers. The process will be facilitated to establish a formal relationship with registration authorities so that the SHG can function independently after the ending of facilitation cycle. The target group especially women and socially marginalized people will be empowered through building capacity and awareness. Social acceptance and dignity of the participants will also improve by ensuring community participation and enhancing leadership capacity. Community-led savings and credit will help individual household’s easy access to financial capital to scale up income generating activities and coping with/managing shocks and disaster.

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

4.2.1. Conduct livelihood assessment to identify locally available and feasible farm, nonfarm IGAsIn 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.

4.2.2. Develop household level business planThe 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

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household’s livelihood’s analysis. Through effective participation of all household members, a realistic business plan will be developed considering strengths, scopes/opportunities, risks, financing and other factors.

4.2.3. Conduct skill transfer training based on TNAThe project team will arrange a 3-day long training for 1500 SHG members to transfer technology, skill and knowledge on IGA management issues to the targeted project participants. Respective technical personnel and trained staff will facilitate the training and arrange demonstration session along with the visual materials to make the session attractive and participants receptive.

4.2.3. Livelihood assets support on revolving basis for SGH members The project will finance the procurement and disbursement of productive assets among to the selected households (1500 HH) based on the household’s livelihood analysis carried out and business plan developed to increase access to productive assets and create livelihood options. Their own choice (in the business plan) will be given priority considering availability of resources and other risk factors. Alternatively second choice may consider as per their interest. The amount for purchasing assets can be varying based on the nature of different IGA. The project will ensure group and SHG’s participation in all stages and maintain relevant documentation. The SHG should procure the assets through a systematic mechanism where IRB’s procurement team will provide facilitation support. Each of the asset recipients will have to repay the total amount of asset cost at procurement to the SHG account in installments within a specific period. The repaid schedule can be flexible, which will be determined by SHG members. The flexibility will be fixed based on the nature of IGA proposed by the particular recipient. The repaid amount will be deposited in SHG’s bank account and will be recycled as capital of the SHG for running self-help micro-finance with Islamic principles in future lending operations.

4.2.4. SHG-led Islamic micro-financing SHG-managed savings will be initiated among the members for building unity promoting community coherence and creating ownership of the microfinancing project. It also improves the saving management capacities which help to minimize the risk of health hazards, shocks and any other unforeseen situation. This is a very important activity for raising savings tendency among the poor people for building a better future. There will have a SHG based savings management mechanism. SHG members will deposit their saving during weekly meeting of every week. There will be a separate bank account for each SHG for saving will deposit. Passbook, register, etc will be provided to each group to maintain their account. Financial management training will also help community leaders to manage saving by themselves. Each of SHG will develop savings rules based on their need and allowing flexibility.

The project will facilitate the initiation of self-help Islamic microfinance at each SHG level. Self-help group members will be provided self-help financing in Murabaha financing mode. Murabaha loans are the most popular example of a trade-based loan. In Murabaha a financier (in this case the SHG), is contracted by a “client” (in this case the individual SHG members) to purchase an asset and which the financier then sells to the client-purchaser, the “on credit with a specified markup. The lender

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must clearly identify the cost at which he bought the item, and fully disclose the profit margin. This is the financial contract commonly used in Islamic microfinance today. Murabaha contracts require the IMFI to take an active role in the purchase and sale of assets, which causes operating costs and justifies the IMFI to charge profit. The project will facilitate to develop a loan product based on the needs of SHG members. The SHG will utilse the profit to run itself. The project will develop self profit making mechanism within SHG so that they maintain their operational cost (including cost of defaults) from their self-financing profit.

4.2.5. Conduct regular monitoring and follow-up. This is a very important and regular activity of this project. Field level staff are to ensure appropriate monitoring and follow-up support to the families, so that households can follow proper take care mechanism for their productive asset and run other economic activities. This process will start after transfer of the productive asset and continue till the end of the project period. The project staff will be trained on various technical issues related to live asset management and economic development issues to ensure appropriate support to the families.

2.8. 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.

4.3.1. 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 activist, NGOs/INGOs professionals. External expert trainer(s) on Islamic microfinance will be hired for conducting the training course.

4.3.2. 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. The seminar will promote awareness of Islamic Microfinance among the related government officials, NGOs,

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multilateral donor agencies, other stakeholders and impart knowledge to promote Islamic Microfinance as a sustainable system financing.

4.3.3. Update Islamic Relief Bangladesh’s Islamic microfinance manual From inception of the Islamic Microfinance program, Islamic Relief Bangladesh has been implementing programs by following the already established operational manual and Islamic principles. Meanwhile, the manual has been reviewed several times by internal human resources. Within the project cycle, IRB’s microfinance operational manual will be reviewed and updated with the critical analysis of maintaining proper Islamic Shari’ah principals provided by the Microfinance Manager as part of internal review. Additionally an Islamic Banking and Islamic Sharia expert will be engaged in upgrading the microfinance manual and providing ongoing Shari’ah auditing advice.

4.3.4. National level policy dialogue and advocacy on Islamic microfinance issue The microfinance sector in Bangladesh is now dominated by MFIs or NGOs, which offer financial services as so called ‘not for-profit businesses’ but strive to achieve institutional and financial viability as soon as possible. NGO-MFIs have now become a new class of financial institution in Bangladesh financial markets. Microcredit Regulatory Authority (MRA) of Bangladesh Bank is the controlling body for regulating the MFIs.

Islamic microfinance has become an increasingly popular mechanism for alleviating poverty, especially in developing countries with large Muslim populations such as Bangladesh, where interest charged might act as an additional access barrier that poor, yet observant Muslims experience. But the current rules of MRA are in favor of conventional microfinance, not considered Islamic microfinance in their model of operations. Although, few organizations/MFIs are trying to establish a system of an Islamic microfinance operation model in Bangladesh, but to fulfill the MRA requirements whilst maintaining Islamic Shari’ah principles by the IMFIs causes a number of operastional conundrums around, for example, reserve policies. To sensitize and demonstrating the need for Islamic MF to the Authority and other government stakeholders IRB will arrange policy dialogue sessions with respective authorities and stakeholders for formulating or including Islamic microfinance policy and procedures. 4.3.5. Conduct Shariah Audit To ensure transactions, operations policies and activities comply to Shariah principles, Shariah audit needs to be conduct periodically. Shari’ah auditors perform audits on both objective information (financial information/standard e.g. profit distribution) and subjective information (Shari’ah opinion/fatwa/standard) to ensure Shari’ah compliance. Shariah audit will be conduct by external Shariah auditors for review IRB’s microfinance program in Shariah point of view.

4.3.6. Develop MIS software Microfinance is a sector where MIS is a strategic need for up scaling to get both economic sustainability and social outreach and performance. It should help in lowering transaction costs and interest rates. IRB practices MS Excel for keeping

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calculation of regular financial trisection of its microfinance program. But, it can serve the very minimum requirement of management and cannot produce comprehensive analytical report of measuring trend of financing. In collaboration with Islamic Relief Worldwide, IRB will develop a standard MIS system for proper tracking of its program as well as control the management information system in customized manner.

4.3.7. Pilot for creating online lending platform on microfinance IRB will pilot an online lending platform on microfinance for capital accumulation and lending among poor borrowers. This online solution will be a peer-to peer lending platform where loans are made directly between persons (lender) and individuals. Lenders support micro-entrepreneurs living in challenging conditions that lack access to capital to launch or expand business activities. It will be first web-based micro-lending in Bangladesh. Interested persons can choose to lend to poor micro-entrepreneurs for supporting them to invest in productive purpose, getting more income and better livelihoods. This mechanism will help IRB to reach more beneficiaries and find new way of microfinance capitalization.

4.3.8. IEC materials development and publication The project will facilitate the creation of public awareness on Islamic microfinance issue. IEC materials can be effective way to make easy for mass awareness creation on Islamic microfinance. IEC materials will develop basis on need-based or demandable topic and those will use as tools of communication.

4.3.9. Lesson learning documentation The project will build on a comprehensive learning, documentation and reflection system so that results are measured and best practices are documented and shared among communities and wider stakeholder groups. Documented evidence will be shared among strategic alliances and ongoing processes of policy dialogue. Community based learning, sharing and reflection will be organized in order empower the poorest communities and their SHG. During last year of the project phase, a lesson leaned document will published to allow the replication of best practices.

4.3.10. Conduct research work and publish working paper on Islamic micro-finance The working papers will present research and learning finding from the project, specifically focused on different aspect of Islamic microfinance. The issue based research will be conducted by external consultant or IRB’s PDMER unit. Findings of the research work will share at regional or national level for raising the issue in wider range. The research work should organize in coordination with IRW’s Global Microfinance Advisor.

2.9. General activities

4.4.1. Staff recruitment and capacity buildingA total 17 fulltime (Microfinance Expert/Project Manger-1, Brach Manager-2, Monitoring Assistant-1, Internal Audit Assistant-1, Project Assistant-1, Procurement

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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 implemention 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 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.

4.4.2. Office set-upThere 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 1st

quarter, targeted office set up and necessary logistic will be ensured. In this regards, IRB will use existing office equipments and logistics considering availability.

4.4.3. Conduct baseline surveyA 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 evidences 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 method shall be used for this purpose. In this respect, respective project M&E staff will develop a structured questionnaire, checklist and conduct field test. 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 concern 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 Micorfinance Advisor is currently developing.

4.4.4. Develop M&E plan for the project

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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. 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.

4.4.5. Conduct midterm review and final evaluationTo 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 process 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.

4.4.6. 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 have 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, a number of materials will be distributed to the different stakeholders or participant of different events of the project. The project will maintain communication with all the relevant stakeholders 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

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providers, NGOs, respective communities, local leader/social elites, project participants, IRB as well as the donor. All output will bear the ‘UK Aid’ logo.

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5. 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.

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 of project interventions. It also helps to be accountable of implementing organization towards the targeted peoples. Apart from, 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, project will conduct 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.

Exit/sustainability strategy: The project is expected to bring about positive changes in socioeconomic conditions of 90% of 4500 poor households in Rangpur district by improving the livelihood conditions of the rural poor people through group fund financed

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productive asset . These 4500 group members will be served for 18 months with livelihoods support to achieve the objective of the project. The project hopes to achieve its objective at the end of the project phase by having establish both sustainable livelihoods for the beneficiaries and an institutionally sutainable financing mechanism through the SHGs. The project will take either strategy option – seeking new fund for continued support for the same household or hand over all group funds to the SHGs. The project expects that at least the group can be able to manage their activities afterward, financing its operational costs through the murabah mark-up. It is thought in one and half years supervision of the project the group will gain the capacity to operate SHG’s activities without external support. In case of getting a MRA (Microcredit Regulatory Authority) license, Islamic Relief Bangladesh will have the entitlement to operate conventional microfinance. However, the local communities are the final owner of all microfinance capital and its profit. Islamic Relief Bangladesh will play a role as custodian to assist the delivery of financial services in systemic manner with Islamic financing principles.

6. 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 quarterly basis. The committee will be authority to provide directions for implementing the project in 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 national departments and/or donors concerned. Project Officer will conduct regular supervision and monitoring of the project. Project Officer as well as Program Manager/Microfinance Expert will produce project narrative and detailed reports in half-yearly and annually.

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7. Gantt chart

Activity Target TimelineY-1 Y-2

Community consultation, need assessment, project participants identification (for new SHG)

75 groups ●

Formation and strengthening SHG (75 new SHGs) 225 groups ● ●Awareness building of SHG 225 groups ● ● ● ● ● ●Capacity building of SHG members/leaders 225 persons ● ● ● ●Institutionalization of SHG 225 groups

Conduct livelihood assessment 1500 persons ●Develop household level business plan 1500 persons ●Conduct skill training based on TNA 1500 persons ● ● ● ●Livelihood assets support on revolving basis for SHG members

1500 persons ● ● ●

SHG-led micro-financing 4500 persons ● ● ● ● ● ●Conduct regular monitoring and follow-up 4500 persons ● ● ● ● ● ●

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

2 batches ● ●

Organize seminar on Islamic microfinance (regional and national level)

2 seminar ● ●

Update Islamic Relief Bangladesh’s Islamic microfinance manual

1 ●

National level policy dialogue and advocacy on Islamic microfinance issue

1 event ●

Conduct Shariah Audit 1 audit ●Develop MIS software 1 ●Pilot for creating online lending platform on microfinance

1 ● ● ● ● ●

IEC materials development and publication Need base ● ●Lesson learning documentation Yearly ● ●Conduct research and publish working paper on Islamic microfinance issue

2 ● ●

Staff recruitment and capacity building 20 ●Office set-up 1 ●Conduct baseline survey 1 ● ●Develop M&E plan 1 ● ●Conduct midterm review and final evaluation 2 ● ●Coordination, communication and visibility ● ● ● ● ● ●

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8. 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 to achieve 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 provide 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 ending of the whole selection process based on pre set 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 strike, hartal etc may limit staff movement and interrupt timely implementation of project activities. In that case project people will work in weekend and do extra work during normal day to ensure smooth and timely accomplishment of project activities.

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9. 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.

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 ending of the project, individual household can easily access essential financial support to scale up IGA and coping and managing shocks and disaster. Each of the asset recipient household will have to repay their asset cost as per repayment schedule. The repay amount will be deposited in the SHG account and will be utilize capital fund of self-help financing 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. Institutional sustainability: The project will facilitate formation and capacity building of Self Help Groups. The project will provide various capacity building support including training, orientation and hands-on support to build their capacity and organization sustainability through assisting to mobilize local resources, fund and account management and documentation. In addition, the project will initiate SHG to link with all local relevant stakeholders. NGO, MFI and LGI services and other facilities important for selected peoples and groups. The project will facilitate to establish formal informal relationship with them, so that after ending of project period SHG can independently communicate with them to access services. After IRB’s exit from the project SHG will independently manage groups, and various social activities and awareness endeavors. The project will ensure that after end of project period SHG will act as an influencing body at local level on behalf of the poor and marginal people.

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10. Logical framework matrix

Narrative Summary OVI MOV AssumptionOverall ObjectiveTo contribute towards achieving MDG1 (reduction of poverty and hunger) through improving livelihoods of the rural poor people in North-West part of Bangladesh.

Potential livelihood options created for 90% project participants by end of project.

- Baseline survey- Evaluation report

- No unfavorable natural calamity occurs.- Stable political/social environment

Specific ObjectiveTo 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 programmes.

Income of 80% targeted beneficiaries increased by 30% by the end of project.

- Baseline survey - Evaluation report,- Project monitoring report

- Overall country economy is stable. - Productive means are available in local market.

Expected Results- 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.

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

- 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.

- 90% self-help groups are well functional. - 100% selected households access to livelihood means90% of them successfully run IGA through livelihood means - 100% selected households adopted locally available and feasible livelihood option.- At least 90% trained group members increase knowledge and skill on managing IGA.- 100% selected women engage in household base economic activities.- Self-help Islamic microfinance issue focused in national level.

- Productive asset transfer record - IGA profitability analysis report - IGA management skill analysis- Households income expenditure analysis report. - Number of women engaged in IGA.

- No disaster - No social restriction - Effective participation of community peoples.

Major Activities: Key activities for achieving result 1: - Community consultation, need assessment, project

participants identification.- Formation and strengthening Self-Help Group (SHG).- Awareness building of Self-Help Groups.- Capacity building of SHG members/leaders.

Inputs Staff Fund Training Equipments

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Narrative Summary OVI MOV Assumption- Institutionalization of SHG.

Key activities for achieving result 2: - Conduct livelihood assessment to identify locally available

and feasible farm, nonfarm IGAs.- Develop household level business plan.- Conduct skill transfer training based on TNA.- Livelihood assets support on revolving basis for SHG

members. - SHG-led Islamic micro-financing. - Conduct regular monitoring and follow-up.

Key activities for achieving result 3: - Organize training on Islamic microfinance for

staff/practitioners (IRB and outside) - Organize seminar on Islamic microfinance (regional and

national level). - Update Islamic Relief Bangladesh’s microfinance manual. - National level policy dialogue and advocacy on Islamic

microfinance issue. - Conduct Shariah Audit.- Develop MIS software. - Pilot for creating online lending platform on microfinance. - IEC materials development and publication.- Lesson learning documentation.- Conduct research work and publish working paper on

Islamic micro-finance.

General activities: - Staff recruitment and capacity building.- Office set-up- Conduct baseline survey. - Conduct midterm review and final evaluation. - Coordination, communication and visibility activities.

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11. Budget of the project

The total budget of the project for two years is 260,000 GBP.

N.B: Detailed budget is annexed in ABC excel format which attached along with.

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