rural livelihood project - asian development bank · i. project description 1 ii. evaluation of...

Completion Report

Project Number: 26624 Loan Number: 1634 December 2008

Bangladesh: Rural Livelihood Project

CURRENCY EQUIVALENTS

Currency Unit – Taka (Tk)

At Appraisal At Project Completion 31 July 1998 22 November 2007

Tk1.00 = $0.02 $0.01 $1.00 = Tk47.05 Tk68.59

ABBREVIATIONS

ADB – Asian Development Bank BME – benefit monitoring and evaluation BMFI – bank microfinance institution BRDB – Bangladesh Rural Development Board BSS – Bittaheen Samabaya Samity (Landless Men’s Cooperative) DBB – District Bittaheen Bank (Landless People’s District Bank) DBBC – District Bittaheen Bank committee DOE – Department of Environment EIA – environmental impact assessment FY – fiscal year IEE – initial environmental examination LA – Loan Agreement MBSS – Mohila Bittaheen Samabaya Samity (Landless Women’s

Cooperative) MFI – microfinance institutions MIS – management information system MLGRDC – Ministry of Local Government, Rural Development and

Cooperatives NGO – nongovernment organization PCC – project coordination committee PMO – project management office PMU – project management unit RLP – Rural Livelihood Project RPCP – Rural Poor Cooperative Project RPMO – regional project management office TA – technical assistance UBCCA – upazila bittaheen central cooperative association UCCA – upazila central cooperative association

NOTES

(i) The fiscal year (FY) of the Government ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2008 ends on 30 June 2008.

(ii) In this report, "$" refers to US dollars.

Vice President X. Zhao, Operations 1 Director General K. Senga, South Asia Department (SARD) Director A. Sharma, Governance, Finance and Trade Division, SARD Team leader M. Ozaki, Finance Specialist (Rural and Microfinance), SARD Team members N. Alam, Assistant Project Analyst, SARD A. Alipio, Associate Project Analyst, SARD R. Fontejon, Administrative Assistant, SARD

CONTENTS Page BASIC DATA i

MAP vi

I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2

A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 7 D. Disbursements 8 E. Project Schedule 8 F. Implementation Arrangements 9 G. Conditions and Covenants 10 H. Related Technical Assistance 10 I. Consultant Recruitment and Procurement 11 J. Performance of Consultants, Contractors, and Suppliers 11 K. Performance of the Borrower and the Executing Agency 12 L. Performance of the Asian Development Bank 12

III. EVALUATION OF PERFORMANCE 12 A. Relevance 12 B. Effectiveness in Achieving Outcome 13 C. Efficiency in Achieving Outcome and Outputs 13 D. Preliminary Assessment of Sustainability 13 E. Impact 13

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14 A. Overall Assessment 14 B. Lessons Learned 14 C. Recommendations 15

APPENDIXES 1. Project Framework 16 2. Status of Compliance with Loan Covenants 19

BASIC DATA A. Loan Identification 1. Country Bangladesh 2. Loan Number 1634 3. Project Title Rural Livelihood Project 4. Borrower People’s Republic of Bangladesh 5. Executing Agency Bangladesh Rural Development Board 6. Amount of Loan SDR 32,130,000 7. Project Completion Report Number 1086 B. Loan Data 1. Appraisal – Date Started 30 May 1998 – Date Completed 8 June 1998 2. Loan Negotiations – Date Started 27 August 1998

– Date Completed 28 August 1998 3. Date of Board Approval 29 September 1998 4. Date of Loan Agreement 19 November 1998 5. Date of Loan Effectiveness – In Loan Agreement 19 February 1999 – Actual 22 March 1999 – Number of Extensions 2 6. Closing Date – In Loan Agreement 30 June 2005 – Actual 22 November 2007 – Number of Extensions 1 7. Terms of Loan – Service Charge 1% per annum – Maturity (number of years) 40 – Grace Period (number of years) 10

8. Terms of Relending (from Sonali Bank to Upazila Bittaheen Central Cooperative Association [UBCCA])

– Interest Rate 6.25% – Maturity (number of years) 1 year – Grace Period (number of years) n.a. – Second-Step Borrower UBCCA

9. Terms of Relending (from UBCCA to an individual or group of primary cooperative society)

– Interest Rate 20% – Maturity (number of years) 1 year – Grace Period (number of years) n.a.

– Second-Step Borrower Individual or group of primary cooperative society

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C. Disbursements

a. Dates

Initial Disbursement Final Disbursement Time Interval 24 June 1999 1 February 2007 8 years, 5 months

Effective Date Original Closing Date Time Interval 22 March 1999 30 June 2005 6 years, 3 months

b. Amounts in SDR

Category or Subloan Original

Allocation Last Revised

Allocation Partial

Cancellationsa

Amount

Disbursed

01 Civil Works 297,000 245,605 51,395 245,605

02A Vehicles 545,000 476,480 68,520 476,480

02B Equipment 585,000 170,010 414,990 170,010

03 Training 2,731,000 1,431,694 1,299,306 1,431,694

04 Consulting Services 465,000 259,637 205,363 259,637

05 Incremental Staff Costs 6,141,000 4,629,429 1,511,571 4,629,429

06 Rural Credit 19,059,000 15,924,593 3,134,407 15,924,593

07 Capital Support to DBB 755,000 0 755,000

08 Service Charge 1,014,000 848,991 165,009 848,991

09 Unallocated 538,000 0 538,000

99 Imprest Account 0 0 0

Total (SDR) 32,130,000 23,986,439 8,143,561 23,986,439

Total (US Dollar Equivalent) 42,600,000 33,418,716 12,500,382b 33,418,716

DBB = District Bittaheen Bank (Landless People’s District Bank). a The cancellation by category includes actual loan cancellation and fluctuation of the category allocation as a result

of reallocation due to a change in scope and implementation arrangement. b Cumulative US dollar equivalent of loan cancellation at the time of approval of cancellation. Source: Asian Development Bank.

c. Local Costs (Financed) – Amount (US Dollars) 10.3 million

– Percent of Maximum Provision For Local Costs 24.0 %

– Percent of Total Cost 31.0 %

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D. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 5.0 23.1 Local Currency Cost 37.6 10.3

Total 42.6 33.4

Source: Asian Development Bank.

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual

Implementation Costs

Borrower-Financed 25.20 18.20 ADB-Financed 42.60 33.41 Other External Financing

6.90 0.00

Total

74.70 51.61

IDC Costs Borrower-Financed 0.0 0.0 ADB-Financed 0.0 0.0 Other External Financing 0.0 0.0

Total 0.0 0.0

ADB = Asian Development Bank, IDC = interest during construction. Source: Asian Development Bank.

3. Cost Breakdown by Category ($ million)

Component Appraisal Estimate Actual

Civil Works 0.89 0.81 Vehicles 1.02 0.72 Equipment 1.59 0.28 Training 3.88 1.96 Consultant 0.67 0.36 Incremental Staff Costs 32.15 23.81 Rural Credit 31.15 22.44 Capital Support to DBB 1.12 0.00 Service Charge and Unallocated 2.23 1.23

Total 74.70 51.61

DBB = District Bittaheen Bank. Source: Asian Development Bank.

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4. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

Landless Poor Societies 38.20 32.00 Project Management 3.50 2.10 Declining Support to RPCP 23.10 16.20 Support to Pilot DBB 2.00 0.00 Contingency 6.60 0.00 Service Charge and Unallocated 1.30 1.30

Total 74.70 51.61

DBB = District Bittaheen Bank, RPCP = Rural Poor Cooperative Project. Source: Asian Development Bank.

5. Project Schedule

Item Appraisal Estimate Actual

Audit firm n.a. April 2003

Civil work n.a. September 2003

Audit firm n.a. June 2004

Audit firm n.a May 2004

Consulting firm n.a November 2004

Audit firm n.a July 2005

n.a. = not available. 6. Project Performance Report Ratings

Ratings

Implementation Period Development Implementation

Objectives Progress

(i) From 31 Dec 99 to 31 Oct 01 Satisfactory Satisfactory

(ii) From 1 Nov 01 to 30 Nov 01 Satisfactory Highly Satisfactory

(iii) From 1 Dec 01 to 31 Dec 07 Satisfactory Satisfactory

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E. Data on Asian Development Bank Missions

Name of Mission

Date

No. of

Persons

No. of

Person-days

Specialization of

Members

Fact-finding Mission 1–19 Dec 1996

Appraisal Mission 30 May–8 Jun 1998

Loan Inception Missiona 9–16 Feb 1999 2 16.0 Sr. Financial Analyst, Project Analyst

Review Mission 1 27 Sep–6 Oct 1999 2 20.0 Sr. Financial Analyst, Project Analyst

Special Loan Administration Mission

6–11 Feb 2000 1 6.0 Sr. Project Economist

Review Mission 2 28 Nov–12 Dec 2000 2 15.0 Sr. Project Economist, Project Analyst

Review Mission 3 12–27 Nov 2001 3 41.0 Lead Rural Finance Specialist, Project Officer, Project Analyst

Review Mission 4 27 May–1 Jun 2002 2 12.0 Sr. Financial Economist, Project Analyst

Mid-term Review 6–14 Jun 2003 2 18.0 Rural Finance Specialist

Review Mission 5 13–19 Dec 2003 1 7.0 Rural Finance Specialist

Review Mission 6 20–23 Feb 2004 1 4.0 Finance Specialist (Rural and Microfinance)

Review Mission 7 27 Nov–2 Dec 2004 1 6.0 Finance Specialist (Rural and Microfinance)

Review Mission 8 15–21 Apr 2005 1 7.0 Finance Specialist (Rural and Microfinance)

Review Mission 9 22–26 Jan 2006 1 5.0 Finance Specialist (Rural and Microfinance)

Review Mission 10 7–15 Feb 2007 1 9.0 Finance Specialist (Rural and Microfinance)

Project Completion Review 12–15 Oct 2008 1 4.0 Finance Specialist (Rural and Microfinance)

a The inception mission was fielded after the Loan Agreement signing but before the loan effectiveness to discuss with the Government the progress on the conditions to the effectiveness of the Loan Agreement.

I. PROJECT DESCRIPTION

1. In the mid-1990s, despite the steady improvements of key economic and social indicators, rural poverty in Bangladesh remained pervasive because of rapid population growth, high population density, limited growth potential in the agriculture sector, widespread landlessness, and inadequate provision of social services. Since the early 1990s, microfinance has become a focus in development, especially as an effective means of encouraging the productivity of the poor by enabling the establishment of income-generating activities and microenterprises. However, it has generally been recognized that inadequate access to financial services has been a major constraint to the establishment and expansion of viable microenterprises for the poor in Bangladesh. 2. The Asian Development Bank (ADB) approved the Rural Livelihood Project (RLP) on 29 September 1998 to support the Government’s poverty reduction efforts through the creation of sustainable farm and nonfarm employment.1 The Project was designed to build on the Rural Poor Cooperative Project (RPCP), approved in 1992.2 The RLP aimed to (i) raise the awareness and rebuild the confidence of the poor, especially women; (ii) impart skills to equip the poor to undertake income-generating activities and develop microenterprises; (iii) provide microcredit to enable the poor to own resources and undertake income-generating activities; (iv) facilitate access to markets and provide marketing support to rural entrepreneurs; and (v) support the operations of a District Bittaheen Bank (DBB), a landless people’s district bank, to be created as a pilot operation under the attached advisory technical assistance (TA).3 The project framework is in Appendix 1. 3. The Project had four components: (i) establishment of landless poor societies, (ii) project management, (iii) declining support to the RPCP, and (iv) support for a pilot DBB. 4. The component to establish landless poor societies was intended to carry out social mobilization and delivery of microcredit for income-generating activities to the rural poor, with a particular focus on women. The societies were organized through upazila bittaheen central cooperative associations (UBCCAs). 4 The activities under the component included (i) the formation of village primary cooperative societies (primary societies) consisting of landless men’s cooperatives (BSS) and landless women’s cooperatives (MBSS), registered at and federated under UBCCAs, (ii) social development and credit awareness training of primary society members, and (iii) provision of microcredit by the RLP through UBCCAs to BSSs and MBSSs for income-generating and microenterprise activities. 5. The project management component was to provide support to the project management office (PMO), regional project management offices (RPMOs), and the impact assessment and training unit to be established within the RPMOs. The component was to support regular project data collection and analysis for early identification of potential problems, and to ensure quality control of social mobilization and training activities.

1 ADB. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

People’s Republic of Bangladesh for the Rural Livelihood Project. Manila. 2 ADB. 1992. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

People’s Republic of Bangladesh for the Rural Poor Cooperative Project. Manila. 3 ADB. 1998. Technical Assistance to Bangladesh for Establishment of a Framework for Sustainable Microfinance.

Manila. 4 The term “thana bittaheen central cooperative association” was used in the Report and Recommendation of the

President (footnote 1). During 1982–1990, thana (districts) were changed to upazila (subdistricts) and since then “upazila bittaheen central cooperative association” (UBCCA) has been used in the Project. These are subdistrict associations of landless people’s cooperatives.

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6. The component covering declining support to the RPCP was designed to provide continued support for the operation and maintenance costs of UBCCAs established under the RPCP on a declining scale, starting from 60% of the total operation and maintenance costs of UBCCAs. It was intended that this support would be phased out over the period of the RLP to reduce UBCCAs’ dependency on external funding and ensure their microcredit operations are sustainable. 7. The component for the support to a pilot DBB was to finance the initial investment and operation costs of a pilot DBB, which will be established by consolidating viable UBCCAs into a formal microfinance bank. 8. The Bangladesh Rural Development Board (BRDB) of the Ministry of Local Government, Rural Development and Cooperatives (MLGRDC) was the Executing Agency and was responsible for overall coordination and monitoring of the RLP. BRDB was in charge of (i) establishing the PMO and two RPMOs; (ii) appointing project staff to be posted at UBCCAs; (iii) conducting training for staff and primary society members, ensuring smooth and sustainable microfinance operations; and (iv) establishing a pilot DBB. Sonali Bank, a state-owned commercial bank, was the Implementing Agency and, in support of BRDB, responsible for channeling funds for microcredit to UBCCAs. 9. The original project completion date was 31 December 2004, but was extended to 31 December 2006. Accordingly, the project closing date was extended from 30 June 2005 to 30 June 2007.

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

10. Since the late 1980s, the Government has continuously advocated poverty reduction, especially for the landless, assetless, poor women and unskilled laborers. The Government’s Fifth Five-year Plan for fiscal year (FY)1998–FY2002 emphasized the need to create productive employment, including self-employment, for the rural poor, and the development of rural infrastructure as a means to reduce poverty. The Fifth Five-year Plan envisaged that an estimated 2.2 million poor people would be raised above the poverty line by the end of FY2002 through the provision of basic social and economic services for the poor, including microcredit. 11. ADB’s Country Operational Strategy for Bangladesh (1998)5 focused on accelerating gross domestic product growth in an equitable and sustainable manner to increase productive employment opportunities and meet the overriding poverty reduction objective of the Government’s Fifth Five-year Plan. ADB’s strategy recommended that higher priority be given to improving social services, especially for women, and infrastructure, together with other basic services to the poor to improve living conditions and increase their capacity to respond to the income-earning opportunities that result from economic growth. 12. The design of the RLP adequately addressed the specific strategies of the Government’s Fifth Plan. The RLP was aligned with ADB’s country strategy for Bangladesh and was relevant. Formulation of the Project included a socioeconomic survey of potential beneficiaries to identify the needs of rural poor households. This revealed that access to credit was regarded by respondents as the biggest constraint to undertaking microenterprise and income-generating activities. Only 27% of surveyed households received institutional credit. The design also 5 ADB. 1998. Country Operational Strategy for Bangladesh. Manila.

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followed the preceding RPCP,6 which attained substantial microcredit outreach by mobilizing landless poor people into primary cooperative societies. B. Project Outputs

1. Landless Poor Societies

13. Under this component, expected outputs included: (i) formation of BSSs and MBSSs in new 72 upazilas (subdistricts), (ii) social development and credit awareness training of primary society members, (iii) training of primary society members to undertake income-generating activities, and (iv) extension of microcredit to primary society members for income-generating and microenterprise activities. It was envisaged that the RLP would extend microcredit to 246,000 poor landless households in addition to the 260,000 households reached under the RPCP. Approximately 210,000 primary society members were to be given training in social preparation, specific skills, and use of credit. 14. By June 2007, the RLP had formed 6,938 primary societies consisting of 787 BSSs and 6,151 MBSSs in 72 upazilas (Table 1) with a total of 192,987 members (20,720 male and 172,267 female). When this total is added to the 314,971 primary society members reached under the RPCP, over half million primary society members have been reached.

Table 1: Number of Primary Societies and Members

Item RLP UBCCAs RPCP UBCCAs Total Primary Societies BSS 787 6,151 6,938 MBSS 1,633 7,786 9,419 Total 2,420 13,937 16,357 Primary Society Members Male 20,720 52,839 73,559 Female 172,267 262,132 434,399 Total 192,987 314,971 507,958

Note: As of 30 June 2007. BSS = Bittaheen Samabaya Samity (landless men’s cooperative), MBSS = Mohila Bittaheen Samabaya Samity (landless women’s cooperative), RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board. 15. The delivery of training programs was satisfactory. Over 330,000 primary society members received training on cooperative management, book keeping, specific skills, and income generation (Table 2). However, the level of the impact of the skills and income generation training was moderate as the training programs provided only a narrow range of skills set. The cooperative management and booking keeping training had a limited impact and many primary societies are not properly keeping their books of accounts (para. 23). The

6 A loan of $30 million for the Rural Poor Cooperative Project (RPCP) was approved on 17 December 1992 to assist

the Government’s poverty reduction efforts through the creation of income-generating and sustainable employment opportunities for the rural poor (footnote 2). By November 1997, the RPCP had mobilized and provided social preparation training to 248,633 poor people and organized them into 8,507 primary societies within 82 UBCCAs. Seventy-eight percent of these members were women. In total Tk620 million was disbursed to approximately 150,000 primary society members. A concern over sustainability was raised during the project mid-term review. As of November 1997, RPCP UBCCAs were able to recover 50% of their total operating costs.

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information dissemination on credit operations and the rights of the shareholders was not sufficient and many primary society members were unaware of their voting rights as shareholders of cooperatives.

Table 2: Primary Society Member Training

Item RLP UBCCAs RPCP UBCCAs Total Training Cooperative Management 46,375 59,733 106,108 Record/Book Keeping 28,948 8,550 37,498 Skills Training 57,501 39,225 96,726 IGA and Management Training 93,818 235 94,053 Total 226,642 107,743 334,385

Note: As of 30 June 2007. IGA = income-generating activities, RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board.

16. Under the RLP, loans were provided to eligible primary society members who (i) owned less than 0.5 acres of land, or (ii) depended on earnings from day labor or had no regular source of income. The loans were for a period of 1 year for various types of income-generating activities. The loan ceilings were Tk5,000 for the first loan and Tk15,000 for subsequent loans. 17. While the outreach of primary society membership has nearly achieved the target, the performances of the microcredit operations of UBCCAs are alarmingly poor, especially with respect to their sustainability. Many primary societies are already inactive and no longer provide credit to their members. Of the total number of primary societies, 9% in the RLP area and 40% in the RPCP area have become dormant and ceased microcredit operations. As of December 2007, nearly one third of the total of 16,357 primary societies has already been inactive (Table 3).

Table 3: Status of Primary Societies Primary Societies Area/Region Active Inactive Total

Number Percent

(%) Number Percent

(%) Number

Percent

(%) RLP UBCCAs 6,314 91 624 9 6,938 100 RPCP UBCCAs 5,557 59 3,862 41 9,419 100 Total 11,871 73 4,486 27 16,357 100

Note: As of December 2007. RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board. 18. In terms of the portfolio quality at UBCCAs, a total of Tk3.7 billion was disbursed and Tk3.1 billion was repaid. However, the PMO does not collect information on the portfolio at risk at UBCCAs. Unrecoverable loans are covered by the bad debt reserve at Sonali Bank (para. 33) and the cumulative loan repayment includes the amount of the adjustment made from the bad debt reserve. Thus, the exact information on portfolio at risk and the on-time repayment rate is not available. However, the PMO reports that nearly half of the borrowers at the primary societies are delinquent (Table 4). A consultant who conducted a portfolio audit of the RLP in

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December 2004 reported that one fifth of the loan amount outstanding at UBCCAs consists of delinquent payments of varying ages. About 61% of the payments are in arrears and about 13% of the total loan portfolio outstanding is already at very serious risk of loss as repayments are more than 1 year in arrears.7 The project completion review mission estimated that about 30% of loans by RLP UBCCAs and 60% of loans by RPCP UBCCAs to primary society members are more than 3 months overdue and are nonperforming. This indicates serious financial inefficiencies and limited prospects for the sustainability of UBCCAs.

Table 4: Selected Indicators of UBCCA Microcredit Operation

Item RLP Area RPCP Area Total Cumulative Amount Disbursed (Tk million) 3,758.032 9,035.472 12,793.504 Cumulative Amount Due for Recovery (Tk million) 3,309.492 8,434.840 11,744.332 Cumulative Amount Recovered (Tk million) 3,090.622 8,191.620 11,282.242 Loans Outstanding (Tk million) 667.410 843.852 1,511.262 Societies with delinquent members (%) 35 45 41 Delinquent Primary Society Members (%) 36 11 ─

Note: As of June 2007. ─ = information not available, RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board. 19. The sustainability of UBCCAs’ microcredit operations was also assessed by their yield gaps. The yield gap is an indicator that measures actual interest income against expected interest income from microcredit. It demonstrates the efficiency of a microfinance institution (MFI) in loan recovery and is an indicator of its profitability. During June–December 2007, UBCCAs received in total only 37.6% of the expected interest income of Tk97 million. Since more than half the expected interest income was not received, UBCCAs can continue microcredit operations only if there is external funding for new loans (Table 5). The limited sustainability of UBCCAs can attributed to the BRDB’s lack of commitment and incentives to viable microcredit operations. Despite repeated attempts by ADB missions to address the issue of sustainability, BRDB took few initiatives to improve the situation (para. 44).

Table 5: UBCCA Interest Income Yield Gap

Item RLP UBCCAs RPCP UBCCAs Total 2006 Average Outstanding Loans—June to December 2006 (Tk million) 671.94 860.17 1532.11 Expected Interest Collection—July to December 2006 (Tk million) 73.52 267.38 340.90 Actual Interest Collected—July to December 2006 (Tk million) 42.67 54.64 97.32 Yield Gap (%) 58.04 20.44 28.55 2007 Average Outstanding Loans—June to December 2007 (Tk million) 664.11 855.98 1520.09

7 Final Report by the Microfinance Cooperative Specialist. Rural Livelihood Project. March 2005.

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Item RLP UBCCAs RPCP UBCCAs Total Expected Interest Collection—July to December 2007 (Tk million) 72.71 197.27 269.27 Actual Interest Collected—July to December 2003 (Tk million) 39.99 61.32 101.32 Yield Gap (%) 55.55 31.09 37.63

RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board. 20. Primary society members are required to purchase a share deposit to be a member of the society. In addition, primary societies accept savings deposits from members. By June 2007, member share deposits amounted to Tk202 million, and savings deposits to Tk906 million, respectively (Table 6). With the limited loan recovery, there is a concern that the savings of the primary society members are eroding rapidly.

Table 6: Primary Society Share Deposits and Savings Deposits (Tk million)

Item RLP UBCCAs RPCP UBCCAs Total Share Deposits BSS 5 29 34 MBSS 40 128 168 Total 45 157 202 Savings Deposits BSS 31 93 124 MBSS 268 514 782 Total 299 607 906

Note As of June 2007. BSS = Bittaheen Samabaya Samity, MBSS = Mohila Bittaheen Samabaya Samity, RLP = Rural Livelihood Project, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association. Source: Bangladesh Rural Development Board.

2. Project Management

21. The project management component was intended to establish the PMO and two RPMOs, one in a new subdistrict, and another in one of the subdistricts covered by the RPCP. The PMO and two RPMOs were established in Dhaka and Chittagong Division and became functional by March 1999. In September 2003, a change in implementation arrangements was approved by ADB to establish additional two RPMOs in Jessore and Sylhet to support the UBCCAs in those areas. The two additional RPMOs were opened in March 2004. The impact assessment and training units were established at the RPMOs and carried out training activities and project monitoring. However, data collection was limited to credit and training activities. Beneficiary impacts were not regularly monitored. While BRDB was aware of the requirement of the impact monitoring, it lacked necessary capacity and staff resource to conduct the monitoring. Insufficient guidance by ADB missions at the initial stage also contributed to this limitation.

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3. Declining Support to RPCP

22. Under this component, it was expected that 80% of the 82 RPCP UBCCAs would become financially self-sufficient and graduate from the financial and operational cost support from the RLP. UBCCAs do not produce income statements regularly, making it difficult to determine the financial and operational self-sufficiency of the RPCP UBCCAs. However, based on the available information on the status of the primary societies, portfolio quality, and the interest income yield (paras. 17-19), the operational self sufficiency of the UBCCAs is assessed to be extremely low. It appears that more than half of RPCP UBCCAs cannot cover their operating costs from their interest incomes. 23. Overall, in both the RLP and RPCP areas, the UBCCA credit operations do not follow fundamental practices of microfinance. The RPL microfinance program has no uniform accounting system, internal audit unit, management information system (MIS), credit operation manuals, adequate human resource policies, or staff training. The external audit8 of selected UBCCAs reported that the books of accounts of primary societies were not properly maintained and therefore the financial statements of the UBCCAs seem to be incorrect. However, no efforts have been made by the BRDB to rectify the accounting problems of the primary societies. UBCCAs have generally lacked the concept of delinquency management and portfolio quality. Delinquent loans were written off only after they had been overdue for 30 months.9 The MIS of the RLP is manual-based and mainly for monitoring achievements against project targets. Information essential for microcredit operations, such as on-time loan recovery and portfolio at risk, was not collected. The RLP had no specific qualification criteria for project management and UBCCA staff and positions were often filled by people with no finance or accounting qualifications. Training programs to upgrade skills of project staff were insufficient.

4. Support to Pilot District Bittaheen Bank (DBB)

24. This component had no output as the expected DBB never materialized. There was a lack of consensus over the proposed regulatory framework to establish the pilot DBB under the attached TA (para. 38). C. Project Costs

25. The total cost of the Project was estimated at $74.7 million equivalent. The foreign exchange cost was estimated at $5.0 million and the local currency cost at $69.7 million equivalent, including taxes and duties of $0.6 million. ADB was to provide a loan of $42.6 million from its Special Funds resources to finance about 57% of the total project cost comprising the entire foreign exchange cost of $5.0 million and $37.6 million of the local currency cost. The Government and UBCCAs were to contribute $25.2 million equivalent in local currency, inclusive of the equivalent of $0.6 million in taxes and duties, and the balance of $6.9 million from beneficiaries, which would mostly be in kind. In September 2003, a change in implementation arrangements was approved to reallocate $227,200 within the specialist support category from local currency to foreign currency to recruit international consultants to enhance UBCCA operations (para. 37). 26. The actual total cost amounted to $65.5 million. ADB funded $33.4 million, comprising all the foreign exchange cost and 24% of the local currency cost (Table 7).

8 By Ahmed Zaker & Co., Chartered Accountants. 9 Normally, loans that are overdue over 3 months are categorized as nonperforming, while loans that are overdue by

more than 12 months are considered unrecoverable and could be written off.

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Table 7: Financing Plan ($ million)

Original Revised

Source

Foreign Exchange

Local Currency

Total Cost

% Foreign Exchange

Local Currency

Total Cost

%

ADB 5.0 37.6 42.6 57 23.1 10.3 33.4 51Government 0.0 25.2 25.2 34 0.0 25.2 25.2 38LFIs 0.0 6.9 6.9 9 0.0 6.9 6.9 11Total 5.0 69.7 74.7 100 23.1 42.4 65.5 100

ADB = Asian Development Bank, LFI = licensed financial institution. Sources: Bangladesh Rural Development Board. D. Disbursements

27. The project loan proceeds were disbursed through two imprest accounts, one held by BRDB and the other by Sonali Bank. All the project expenditures except for microcredit were paid from the imprest account of BRDB. Under the subsidiary loan agreement, the Government relent to Sonali Bank at 1.25% per annum to finance microcredit for a period of 20 years with a grace period of 5 years. Sonai Bank then onlent to UBCCAs at the rate of 6.25% on the declining balance basis. Of the 6.25% margin, Sonali Bank retained 4% for a UBCCA bad debt reserve fund to reconcile losses arising from nonperforming loans. UBCCAs subsequently provided loans to individual primary society members at the rate of 20% per annum on the declining balance basis.10 The interest to the members is to cover (i) incentive payments to BSS and MBSS managers, (ii) incentive payments to field organizers, (iii) reimbursement of a proportion of the recurrent operating costs of UBCCA staff at the upazila level, and (iv) profits. The rules of the RLP credit operation were defined in the banking plans developed by Sonali Bank and BRDB in 2000. To ensure that the UBCCA credit operations would continue after project completion, a revolving fund was established at Sonali Bank. Sonali bank was required to deposit the principal repayments of subloans to UBCCAs in this fund. 28. At project completion, of the $42 million ADB loan, $33.4 million had been disbursed and the balance of approximately $12.5 million had been cancelled. This was due to the limited growth of the UBCCA microcredit and training activities and cancellation of the pilot DBB (para. 38). ADB’s Integrity Division investigated an alleged misuse of project resources but did not find substantial evidence to bring the case to the Integrity Oversight Committee. However, it referred the concerns to the Project Department and recommended strengthening controls over the issue. E. Project Schedule

29. The RLP became effective on 22 March 1999, 6 months after the project approval due to the delay in fulfilling the conditions for the loan effectiveness including the appointment of the project director and formulation of the project coordination committee by MLGRDC. The operation of UBCCAs in the 72 upazilas was delayed almost 2 years because of a disagreement between MLGRDC and ADB over the project implementation upazilas. The ADB project appraisal mission selected 72 out of 223 upazilas to be covered under the RLP, based on the level of poverty and the scarcity of other microfinance services. However, after project approval, the Government asked to replace 16 of the original upazilas with those affected by floods. However, ADB disagreed because of the presence of other microfinance nongovernment

10 In the declining balance method, interest is calculated on the remaining loan balances.

9

organizations (NGOs) in the flood-affected areas and the limited project management capacity of the PMO in these areas. The issue was resolved in January 2001 with the Government accepting the originally proposed upazilas. UBCCAs became fully operational in 72 upazilas by December 2001. 30. However, the RLP continued to experience delays because of frequent changes in the project director, a delay in appointing UBCCA staff, and slow progress in the attached TA implementation (para. 38). To compensate for the initial delay, in November 2004 the project completion date was extended for 2 years from 31 December 2004 to 31 December 2006. F. Implementation Arrangements

31. At the project level, the project coordination committee was chaired by the secretary of the Rural Development and Cooperatives Division of MLGRDC with representatives from the Project, BRDB, Sonali Bank, the Ministry of Women and Children’s Affairs, and the Ministry of Planning and Planning Commission. However, there was no indication that the committee actively monitored the RLP or provided guidance. It appears that the committee became nearly dormant after the second year of the RLP. 32. At the central level, the PMO was staffed by the project director and two deputy directors, with support staff from BRDB. At the regional level, regional directors and deputy regional directors were appointed for the RPMOs. In each UBCCA in both the RPCP and RLP upazilas, BRDB appointed an upazila project officer, a deputy project officer, and an accountant. These UBCCA staff were responsible for (i) undertaking social mobilization, (ii) organizing management and skills training for primary society leaders, (iii) ensuring that eligibility criteria for subborrowers were enforced and approving eligible credit applications, (iv) consolidating the applications on a regular and frequent basis for submission to Sonali Bank, (v) maintaining the records of individual members’ loans, and (vi) supervising field organizers and ensuring the recovery of loans. While the UBCCA staff conducted training and microfinance activities as per the banking plan, their client screening and loan recoveries activities were not rigorous enough compared with those of private microfinance NGOs. 33. Sonali Bank was responsible for (i) developing a banking plan incorporating appropriate systems and procedures for RLP credit operations, (ii) grading loans through UBCCAs and primary societies to individual group members or groups for income-generating activities, (iii) designating and assigning a full-time credit office to each UBCCA, (iv) guiding and assisting in training UBCCA field organizers and members of BSSs and MBSSs in project credit procedures and in keeping credit records, (v) establishing a project revolving fund, (vi) maintaining the bad debt reserve account of UBCCAs, and (vii) liquidating bad debts on a regular basis under modalities to be worked out with BRDB and reflected in the banking plan. Sonali Bank appointed rural banking officers and posted them at RPCP UBCCAs and microcredit officers for RLP UBCCAs. The salaries for rural banking officers and microcredit officers were paid from the RLP. This demarcation of responsibilities between BRDB and Sonali Bank in the UBCCA microcredit operation was not necessarily conducive to promoting sound microcredit practices. BRDB staff were government agency employees and lacked the capacity to exercise due diligence in selecting eligible borrowers and approving loans. Sonali Bank staff were given insufficient incentives to ensure proper loan recovery and portfolio quality. 34. The implementation arrangements of the RLP, under which a government agency operates credit cooperatives, were not consistent with the best practices of microfinance. During the 1990s, the microcredit industry expanded rapidly in Bangladesh, mainly led by microfinance

10

NGOs, the number of which increased from about 500 in 1998 to over 1,000 in 2007. They currently reach over 15 million people, or 71% of total microfinance clients. In recent years, the share of government programs in microfinance has decreased, and currently government-supported microfinance programs account less than 12% of total clients. Microfinance NGOs generally outperform government agencies in terms of sustainability, financial efficiency, and client outreach. Government microcredit programs suffer from low repayment rates, large numbers of nonperforming assets, and weak sustainability. The implementation arrangements of the RLP generally overlooked the fundamental institutional constraints of government agencies in operating microfinance. BRDB’s capacity as a microcredit provider was not thoroughly assessed, according to the common best practices of microfinance. G. Conditions and Covenants

35. Key covenants were complied with in a generally satisfactory manner (Appendix 2). The covenants related to the DBB11 were partially complied with (para. 38). A covenant requiring the BRDB to establish a Rural Upazila Marketing Forum to provide market linkage to microenterprises was partially complied with.12 A Marketing Forum was established, but never became fully functional. A covenant that requested Sonali Bank to make its borrowers comply with environmental requirements was not complied with because as a bank, Sonali Bank had little awareness of or incentives to address environmental issues and the RLP did not support it to improve its environmental awareness. H. Related Technical Assistance

36. The RLP had an attached TA to develop an appropriate legal and regulatory framework for microfinance institutions and to establish pilot microfinance banks. The expected outcomes of the TA were (i) the establishment of a pilot DBB—a formal district microfinance bank, (ii) improved MFI supervisory and regulatory capacity of the Bangladesh Bank—the central bank, and (iii) enactment of bank microfinance institutions (BMFI) legislation. The DBB was meant to be a cooperative microfinance bank established by federating UBCCAs, with landless poor people being the owners and shareholders of the bank. However, Bangladesh had no legislation governing microfinance banks at the time the RLP was approved and new legislation was required to establish the DBB. 37. The TA required a total of 45 person-months of international and domestic consultants. The consultants consisted of (i) bank management and institutional specialists, (ii) bank systems specialists, (iii) finance and credit system specialists, (iv) evaluation specialists, (v) banking supervision specialists, and (vi) legal experts. 38. By October 2001, the consultants had produced eight reports and conducted three workshops on (i) an implementation plan for a pilot DBB, and (ii) draft BMFI legislation. Overall, the consultants performed efficiently and the quality of their outputs was satisfactory.13 However, while the reports and workshops were well received by the Government and other stakeholders, interest in the enactment of the BMFI legislation was not sustained. The draft legislation was distributed to the Government, Bangladesh Bank–the central bank, DBB Committee, and key MFIs, but was never formally reviewed. As a result, the proposed plan for a pilot DBB was not implemented. Similarly, without an appropriate legal framework for the Bangladesh Bank to

11 Sector Covenants, clause 4. 12 Financial Covenant, clause 1. 13 The consultants’ performance evaluation report by ADB dated 13 November 2006 rated the overall consultants’

performance satisfactory.

11

carry out the supervision and regulation of MFIs, the training plan for MFI supervision was found to be too premature to be implemented. Subsequent ADB review missions repeatedly requested the Government to review the draft BMFI legislation and kept the TA account open.14 However, given no substantial progress in the review of the draft BMFI legislation, the TA was closed on 29 March 2005 after three and half years from the original closing date of 31 October 2001. 39. The total TA cost was estimated at $1,008,000, comprising $787,700 in foreign exchange cost and $220,300 in local currency cost. ADB was to finance $800,000 to cover the entire foreign exchange cost and $12,300 equivalent of the local currency cost. By the TA completion, ADB had financed the total $515,903 for foreign exchange and local currency costs. The balance of $284,097 was cancelled and returned to the TA Special Fund upon the closure of the TA. 40. The technical assistance completion report reported that the overall TA rating was partly successful because the TA could not achieve the expected outcomes fully. Similarly, while the quality of the TA consultants’ outputs was satisfactory, it did not lead to the expected results, thus the TA was considered less efficient. In terms of sustainability, after the completion of the TA, the TA’s recommendations on the training module of the MFI supervision and regulation function at the Bangladesh Bank was partially implemented, and was expected to be sustainable. I. Consultant Recruitment and Procurement

41. The Project budgeted for recruiting about 15 person-months of national individual consultants to support BRDB in training and financial systems development as well as national firms to undertake field surveys, midterm evaluation, and account audits of UBCCAs. BRDB did not recruit all the planned consultants. By project completion, BRDB had hired a national consultant for 2 months for the midterm review, and national chartered accountants to conduct annual project and UCBBA account audits. In September 2003, a change in implementation arrangements was approved by ADB to enable the recruitment of 22 person-months of international consultants consisting of (i) a microfinance cooperative specialist (3 months), (ii) a microfinance cooperative institution development specialist (16 months), and (iii) an MIS specialist (3 months), to restructure the UBCCA operations and improve their sustainability. All consultant recruitments were done in accordance with ADB’s Guidelines on the Use of Consultants. BRDB carried out procurement as planned and procured vehicles, motor cycles, bicycles, office equipment and regional office construction through national competitive bidding or shopping. All procurement was carried out in accordance with ADB’s Procurement Guidelines. J. Performance of Consultants, Contractors, and Suppliers

42. BRDB assessed the quality of outputs of the consultants as satisfactory. The international microfinance cooperative specialists and MIS specialist produced detailed plans for the UBCCA restructuring and MIS installment to make UBCCAs into autonomous credit cooperatives following microfinance best practices. MLGRDC and BRDB accepted the plans recommended by the consultants but showed little commitment to implement them. There were no delays or issues related to goods suppliers or service contractors.

14 During 2003-2004, ADB missions also advised the Government to utilize the TA savings to support the

Government Committee to develop a regulatory framework for MFI supervision. However, given the lack of a positive response from the Government, the TA was closed in March 2005.

12

K. Performance of the Borrower and the Executing Agency

43. In terms of achieving outputs, BRDB’s performance is assessed generally satisfactory. It carried out required project administration tasks (e.g., submitting progress reports, managing imprest account, and conducting annual audits) with no significant delays. It mobilized nearly 200,000 landless people into primary societies as against the output target of 210,000. However, in terms of achieving the RLP objectives of establishing sustainable microfinance operations at UBCCAs and transforming them into formal microfinance banks as specified in the project framework (Appendix 1), the BRDB lacked sufficient expertise to operate credit cooperatives in a professional and sustainable manner, i.e., instituting a strict credit repayment culture, establishing an appropriate accounting and monitoring system, and maintaining the portfolio quality and controlling nonperforming loans. Coordination with Sonali Bank to professionalize UBCCAs was not very effective (para. 33). ADB review missions15 raised the deteriorating portfolio performances and weakening sustainability of UBCCAs with BRDB. Following the recommendations of an ADB mission, BRDB fielded three international consultants to assist UBCCAs to professionalize the microfinance operations to improve their sustainability (para. 41). However, the consultants’ recommendations had little impact on improving the performance of the UBCCAs (para. 42). L. Performance of the Asian Development Bank

44. During the implementation period, four ADB staff managed the RLP. Each conducted review missions at least twice a year and provided prompt comments and suggestions on outstanding implementation issues. In total, ADB conducted 10 review missions. Except for the initial disagreement over the selection of project implementation areas (para. 29), there were no major disagreements or complaints about ADB. The limited implementation capacity of BRDB, the slow progress of project activities, and concerns about sustainability of the microcredit operations were addressed by the ADB missions as early as in 1999. All subsequent ADB mission expressed the same concerns to varying degrees and asked BRDB to take corrective actions, including fielding consultants to improve the UBCCA microcredit operations in September 2003 (para. 41). However, BRDB did little to respond to the missions’ requests and made no changes in project management and administration. The performance of ADB is assessed satisfactory.

III. EVALUATION OF PERFORMANCE A. Relevance 45. The Project addressed credit constraints for the poor and was in line with the Government’s Fifth Five-year Plan and the ADB country strategy at the time. However, the project design overestimated the capacity of BRDB. The appraisal mission’s assessment on the institutional capacity of BRDB as a MFI was insufficient. Although the RLP was developed before ADB’s microfinance strategy,16 which advocates greater support for the private sector in microfinance, the relative weakness of government agencies as compared with private entities had already been identified.17 Selecting an appropriate private entity rather than BRDB could have produced more sustainable results, because BRDB lacked an accountable governance

15 Aide Memoire, ADB Review Mission, L1634-BAN (SF): Rural Livelihood Project, December 2004, March 2004, and

June 2003. 16 ADB. 2000. Finance for the Poor, Microfinance Development Strategy. Manila. 17 The report and recommendation of the president of the RLP noted “in the accumulation of savings and shares, the

record of the primary societies compared with that of Grameen Bank is disappointing” (footnote 1, para. 9).

13

mechanism that would have enabled it to manage microcredit operations. Frequent politically motivated directives of loan and interest waivers by the Government weakened the financial soundness of UBCCAs. The idea for the pilot DBB was overly ambitious and planned without detailed analysis of the capacity of key stakeholders. However, taken as a whole, the RLP is rated partly relevant. B. Effectiveness in Achieving Outcome

46. The primary objectives of the RLP were: (i) increasing rural incomes, generating employment opportunities, and improving the quality of life of beneficiaries; and (ii) creating sustainable stakeholder-owned MFIs. By completion, the RLP had established 16,000 primary societies with approximately 500,000 members, 80% of whom are women. The field survey of selected primary societies indicated that microcredit provided by the RLP had helped landless poor households to engage in new microenterprises or expand existing ones. However, the RLP had limited success in establishing sustainable MFIs. It is estimated that about one third of primary societies established by the RLP and the RPCP have become dormant and in general UBCCAs suffer from high loan delinquency rates and limited sustainability. The envisaged DBB did not materialize. In terms of its effectiveness in achieving outcomes, the RLP is rated less effective. C. Efficiency in Achieving Outcome and Outputs

47. BRDB was efficient in achieving the output targets of extending cooperative member outreach. However, it was less efficient in delivering microfinance services in a cost- efficient and sustainable manner. With high loan delinquency and deteriorating portfolios, UBCCA microcredit operations are inefficient. The growing number of dormant primary societies is another concern. While there was anecdotal evidence of a quantitative impact on the livelihoods of the beneficiaries, the RLP’s qualitative impact on income and assets was unclear (para. 49). Given the overall operational inefficiency of UBCCAs, it can be concluded that RLP microcredit was not translated into sustainable livelihood improvement of the majority of primary society members. Overall, the RLP is rated less efficient. D. Preliminary Assessment of Sustainability

48. With a low level of operational self-sufficiency and a high level of delinquent loans in primary societies, BRDB is able to continue the UBCCA microcredit operations only if there is government budgetary support or other external funding. However, the UBCCA microcredit operations’ sustainability prospects will continue to be limited unless BRDB makes a rigorous effort to improve the loan repayment and delinquency control at UBCCAs. BRDB lacks the capacity and incentives to restructure its microcredit programs and the prospect of UBCCAs becoming viable and professional credit cooperative associations is almost nonexistent. The envisaged pilot DBB has not materialized. Overall, the sustainability of the RLP is rated unlikely. E. Impact

49. An ADB evaluation study carried out a socioeconomic survey of the RLP beneficiaries and reported that, although the RLP beneficiaries were generally better-off than the poor in general, this was not necessarily attributable to the RLP.18 A quick impact assessment by the project completion review mission produced similar results and found little difference between 18 ADB. 2007. Evaluation Study on Effect of Microfinance Operations on Poor Rural Households and the Status of

Women. Manila.

14

project beneficiaries and nonbeneficiaries in their expenditures on health, education, food, and household durable assets.19 There was a visible impact of the empowerment of women among the project beneficiaries. Empowerment of women implies that women have more autonomy and ability to make decisions over the use of household resources. They are freer in participating in social gatherings and community activities. However, the impacts on incomes or assets were unclear and, even if there was some indication of higher incomes among the beneficiaries, it is hard to attribute that only to the Project.

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

50. The project objective of addressing rural poverty by extending microcredit for income generation and employment creation was relevant at the time of approval and remains relevant. However, the appraisal mission’s analysis of BRDB’s capacity to implement a sustainable microfinance operation was inadequate. Despite the over 7 years of operations, the RLP failed to institute proper microcredit practices at UBCCAs. As a result, they have a high percentage of nonperforming loans, low asset quality, and weak sustainability. While the impact of the RLP on the beneficiaries’ income level was unclear, the RLP did contribute to empowering the landless primary society members, especially women, by giving them means to earn incomes and greater confidence. The non-income social benefit of microcredit shall not be underestimated as it has a significant implication on enabling the poor to engage in productive activities. The financial situation of UBCCAs has been deteriorating and their sustainability is in doubt. Overall, the RLP is assessed partly successful.20 B. Lessons Learned

51. Microfinance, like any other business, requires a good business culture, which means MFIs need a clear vision and strategies, autonomous management free of political interference, prudent financial management, and strict control of delinquent loans. They need to be financially viable and free from subsidy. ADB’s microfinance strategy notes that most state institutions or programs that provide microfinance services have been created within and nurtured by a distorted policy environment characterized by various degrees of financial repression. Government sponsored microfinance programs normally do not emphasize loan recovery and portfolio quality. They are highly susceptible to unsound political interference. Even new institutions created by governments in most developing member countries are unable to provide good services, let alone expand their services in a sustainable way. 21 Weak governance, susceptibility to political influence and an implicit government guarantee in government-sponsored institutions or programs reduce incentives to focus on viability and sustainability. MFIs must be autonomous because political interference (e.g., loan and interest waivers) affects their cash flow, weakens their capital base, and discourages their recovery efforts. The RLP’s reliance on a government agency overlooked crucial factors of loan recovery and delinquency control, which meant that UBCCAs were not sufficiently sustainable. The limited capacity of BRDB to maintain the viability of UBCCAs has led to concerns about the erosion of the share and savings deposits of the landless primary society members. 19 The quick impact assessment survey was conducted by the project completion review mission. It surveyed 112

project primary society members and nonproject beneficiaries on expenditures for health care, education, food consumption, household durable assets and household decision making. All the respondents were female.

20 Following the methodology of Guidelines for Preparing Performance Evaluation Reports fro Public Sector Operations (January 2006), the rating value of the overall assessment is 0.8. A project is partly successful if the rating value is greater than or equal to 0.8 and less than 1.6.

21 ADB. 2000. Finance for the Poor: Microfinance Development Strategy. Manila (p.17).

15

52. When financing microfinance projects, MFIs need to be selected carefully and given rigorous monitoring. They should have characteristics that will enable them to ensure viable and sustainable microfinance operations. These include (i) an autonomous governance structure that prohibits unsound political interventions, (ii) competent professional management with a clear mission and vision, (iii) adequate human resource policies in which staff are rewarded for good performance, and (iv) a comprehensive MIS to enable the management to monitor and make rapid business decisions. Supporting policy environments and infrastructure are also important to facilitate successful microfinance outreach expansion. Supervision and regulation of MFIs by an autonomous supervisory authority is indispensable to the healthy growth of the microfinance sector. Many MFIs have capacity constraints and lack the ability to manage resource mobilization and credit expansion prudently. Funding agencies for microfinance projects shall provide timely guidance and monitoring to compensate capacity deficiencies of MFIs. Projects also need to allocate sufficient resources for the capacity development of MFIs. C. Recommendations

53. Microfinance projects must meet the guiding principles of ADB’s microfinance strategy. They should (i) create a policy environment conducive to microfinance, (ii) develop financial infrastructure, (iii) build viable institutions, (iv) support pro-poor innovation, and (v) facilitate social intermediation. During the formulation of the project, support from staff or consultants with appropriate microfinance qualifications should be sought to ensure that the proposed approach is consistent with best microfinance practices. Project monitoring indicators should include not only outreach or disbursement targets, but also financial indicators such as the portfolio at risk, nonperforming ratio, and self-sufficiency ratio. If problems with sustainability are encountered during project implementation, ADB should immediately engage in discussions with the Government to develop solutions, such as recruiting additional technical experts, or changing the implementation arrangements or institutions.

16 Appendix 1

PROJECT FRAMEWORK Design Summary Targets/Verifiable Indicators Project Monitoring Mechanism Important

Assumptions Observations/Remarks

1.0 1.1 2.0 2.1 2.2

Sector Goal Reduce rural poverty Objectives Increase rural incomes, generate employment opportunities, and improve the quality of life of beneficiaries in 152 Bangladesh Rural Development Board upazilas. Create sustainable stakeholder-owned microfinancial institution that helps reduce poverty by providing the poor ready access to financial services.

About 0.5 million households out of about 10 million households (or 5% of those below the poverty line) cross the poverty line (measured by their ability to afford a minimum dietary intake of 2,122 kcal per day). Bank microfinance financial institutions (MFIs) are created out of viable operations of nongovernment organizations and cooperatives, and provide ready access to financial services to the poor. The household income and nutritional level of rural members improve. Incomes increase by at least 50% by 2005 from baseline (estimated at Tk18,700 per household per year). For Rural Poor Cooperative Project (RPCP) beneficiaries, incomes further increase by 40% from current average of Tk27,000 per household per year. Enabling legislation for creation of sustainable rural financial institutions passed by parliament and in force within 18 months of start of associated Technical Assistance (TA). Bank MFI created out of financial operations of Upazila Bittaheen Central Cooperative Associations (UBCCAs).

Household expenditure surveys by the Bangladesh Bureau of Statistics County statistics on economic and social indicators Annual reports of executing agencies; project monitoring reports; and midterm and post-project surveys to show; savings performance, training in social awareness and legal literacy, training in skills, training in the use of credit (purpose and term) and recovery performance, analysis of microenterprises and income generating activities (IGAs) undertaken, household expenditures and other household debts, level of literacy among members, gender of members, household size, dependency ratio, availability and use of portable water and sanitation, nutrition level, wage labor versus self-employment, and annual income.

Real gross domestic product grows at an average of 8.2% per annum for the period 1998 to 2005. Government maintains sustainable policies for rural microfinance. Executing agencies will have the required capacity to implement components. Accompanying TA is implemented on time and Government adopts appropriate MFI and MFI regulatory policies and passes enabling legislation.

There is anecdotal evidence that beneficiaries improved their income and livelihood with microcredit. However, the overall poverty impact of the Project is not known. As compared with the pre-Project status, the socioeconomic situation of beneficiary households has generally improved. However, it is difficult to attribute this to the Project. The sustainability of UBCCAs is limited. The envisaged pilot microfinance bank did not materialize.

Appendix 1

17

Design Summary Targets/Verifiable Indicators Project Monitoring Mechanism Important Assumptions

Observations/Remarks

3.0 3.1 3.2 3.3 4.0 4.1 4.2 4.3 4.4

Outputs/Components Target beneficiaries to be socially prepared to participate in the Project, to receive skills training for appropriate IGA and to have ready access to credit for IGAs. The attainment of financial viability by UBCCAs and the formation of financially sustainable district bittaheen bank (DBB). Effective Project management. Activities/Expenditures The procurement of vehicles and office equipment. Provision of civil works The provision of social preparation and training to about 500,000 members and field staff. Rural credit and financial services provided to 500,000 members in 152 upazilas.

Subsidy dependence of UBCCAs gradually reduced to zero by tenth year (about five years for UBCCAs under RRCP). 210,000 new members to be given training in social preparation, skills training, and use of credit. They receive access to financial services. 80 percent of UBCCAs under RRCP achieve financial viability and stop receiving administrative subsidy. A pilot DBB is formed. Formation of PMO and two regional offices before loan effectiveness. PMU of RRCP reports to and is coordinated by PMO. Project cost $1.78 million (of which $0.22 million for support to DBBs) Project cost $1.03 million (of which $57,000 is for support to DBB) Project cost $4.54 million (of which $0.19 million is training to DBB field staff) Project cost $32.2 million

Project management office (PMO) (and Project Management Unit [PMU] of RPCP) and individual UBCCAs’ progress reports; Bank reviews/visits PMO (and PMU), consultant, and individual UBCCAs’ progress reports; Bank reviews/visits PMO (and PMU) progress reports of attainment physical targets and disbursement of Project funds PMO (and PMU) quarterly progress reports and activity monitoring reports Procurement summary reports Disbursement and expenditure statement reports

Field organizers and UBCCA staff are sufficiently motivated to organize village groups and provide the necessary awareness and skill trainings.

Outreach of training and credit delivery was generally satisfactory in terms of quantity. DBB was not established. PMO and regional offices were established and functional. The procurement was done in a generally satisfactory manner. The civil works were satisfactory. The delivery of training was generally satisfactory in terms of quantity. The membership of the credit cooperatives reached more than

18 Appendix 1

Design Summary Targets/Verifiable Indicators Project Monitoring Mechanism Important Assumptions

Observations/Remarks

4.5 4.6 4.7

Capital support to DBB PMO Recurrent cost (incremental staff and operating and maintenance)

Project cost $1.00 million (Government equity support in DBB) Project cost $4.0 million Project cost $32.8 million (of which $1.7 million is for DBB support)

Audit report

500,000, but the number of active borrowers was much less. The DBB was not established. The PMO was established. The disbursement was low due to the limited implementation capacity of the executing agency.

Appendix 2 19

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Reference Covenant Status RRP Para. 69

The Government will open at Bangladesh Bank, within one month of loan effectiveness: two separate imprest accounts denominated in dollars, for BRDB and for Sonali Bank.

Complied with.

LA, Section 4.07(c)

Promptly after physical completion of the Project, but in any event not later than three months thereafter or such late date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall prepare and furnish to the Bank a report, in such form and in such detail as the Bank shall reasonably request, on the execution and initial operation of the Project, including its cost, the performance by the Borrower of its obligations under this Loan Agreement and the accomplishment of the purposes of the Loan.

Complied with.

Execution of the Project Project Execution and Implementation LA Sched. 6 Para. 1

BRDB as Project Executing Agency shall be responsible for the overall supervision and execution of each part of the Project. Within BRDB, the Director General of BRDB shall have overall responsibility for Project Implementation.

Complied with.

Project Management, Coordination and Staffing LA Sched. 6 Para. 2

Project Director The Project Director, reporting to the Director General of BRDB, shall be in charge of the day-to-day supervision of the Project. The Project Director shall have direct access to BRDB staff seconded to the Project and UBCCA and have direct access to BRDB staff seconded to the Project and UBCCA and field level staff for purposes of the Project including creation of the pilot DBB.

Complied with.

LA Sched. 6 Para. 3

Project Management Office (Part 2) Prior to the Effective Date, the Borrower shall cause BRDB to establish a PMO in one of the regional office headed by the Project Director. Within three months of the effective Date, the Borrower shall cause BRDB to appoint to the PMO a Joint Director, two Assistant Directors, one Senior Assistant Director and an adequate number of accounts and support staff.

Complied with.

LA Sched. 6 Para. 4

The PMO shall be responsible for day-to-day Project Implementation with the support of Sonali Bank. Such responsibilities shall include BME; preparation of reports under this Loan Agreement, including to the Project Coordination Committee; UBCCA training in which it may be assisted by qualified firms or NGOs; entering into contracts on behalf of BRDB with NGOs for training and with governmental agencies recommended to BRDB hiring and where appropriate, dismissal of project officers and staff engaged on a contractual basis.

Complied with.

LA Sched. 6 Para. 5

Project Management Unit (Part 3) BRDB shall implement Part 3 of the Project on RPCP Amendments to Loan Agreement and DBB through the PMU which shall be responsible for (i) the supervision of the UBCCAs, and (ii) assisting the BRDB in implementing the pilot DBB and replicated DBBs. The PMU shall be under the direction of the Project Director. The Project Director shall nominate PMU representatives to sit on DBB and Project Coordination Committee.

Complied with. However, the establishment of DBB did not materialize because the TA report recommending regulatory framework for DBB was not agreed to by the Government.

20 Appendix 2

Reference Covenant Status LA Sched. 6 Para. 6

BRDB Statement of Policy and Strategy: Project Implementation Plan Within three months of the Effective Date, the Borrower shall cause BRDB to develop and adopt a Statement of Policy and Strategy plus a Project implementation Plan, both of which shall be acceptable to the Borrower and the Bank. Subsequently, BRDB shall implement, review and amend from time to time as appropriate the Statement of Policy and Strategy and Project Implementation Plan after taking into account Bank comments. In particular, the Borrower shall cause BRDB to include in the agreed upon Statement of Policy and Strategy, organizational, operational (product-market) and financial strategy.

Complied with.

LA Sched. 6 Para. 7

The Borrower shall ensure implementation arrangements for the Project including (i) that 70 upazila (subdistrict) offices to accommodate UBCCA and rural banking staff are established within a time bound action plan to be agreed with the Bank, (ii) that two regional offices are established in accordance with a time bound action plan to be agreed with the Bank, and (iii) that a Rural Upazila Marketing Forum to coordinate upazila level market support activities of NGOs and others to microenterpreneurs is established.

Partly complied with. Two regional offices were established. The Marketing Forum has been established but are not fully functional.

LA Sched. 6 Para. 8

Project Coordination Committee Prior to Effective Date, the Borrower shall established a PCC to be chaired by the Secretary, Rural Development and Cooperatives Division of the MLGRDC and have as its members (i) the Director General BRDB; (ii) the General Manager (banking of Bangladesh Bank); (iii) a representative of the Borrower’s Ministry of Women and Children’s Affairs; (iv) a representative of Sonali Bank; (v) a representative of the Implementation, Monitoring and Evaluation Division of the Borrower’s Ministry of Planning; (vi) a representative of the Planning Commission; (vii) a representative of the PMU; and (viii) the Project Director of the PMO who shall act as member secretary of the PCC.

Complied with.

LA Sched. 6 Para. 9

The PCC shall have the following tasks: (i) review the physical and financial progress of the Project; (ii) identify and discuss any operational difficulties and making arrangements for solutions; (iii) select and award contracts to Consultants, NGOs and other entities where such contracts exceeded $50,000 in value; (iv) provide policy guidance to the PMU and PMO on administrative and financial matters where required; and (v) examine, where the PCC deems necessary, the environmental impact of subprojects.

Complied with.

LA Sched. 6 Para. 10

DBB Committee The DBBC formed by Prime Ministerial order under the chairmanship, the Secretary, Rural Development and Cooperatives Division of the Ministry of Local Government Rural Development Cooperatives, comprises representatives of the Borrower’s Ministry of Finance, Ministry of Law and Justice, Planning Commission, Economic Relations Division, BRDB and the Bangladesh Bank. The DBBC shall, pursuant to advice from the Technical Assistance consultants, oversee all aspects relevant to operationalization issues shall include but not be limited to (i) installation appropriate systems; and (ii) formulation of appropriate policies (such as on deposits, investments, credit operations, staffing, remuneration, composition of the DBB Board). Within one year of the effective date, the Borrower shall cause the DBBC to ensure that the pilot DBB is formed and within three months thereafter the Borrower shall cause the DBBC to ensure that the pilot DBB is operational.

Partly complied with. A DBB Committee was established in January 2000. The establishment of the DBB has been deferred because of the difficulty of developing the legal framework for DBB.

Appendix 2 21


A DBB Coordination Committee shall be established and shall be responsible for coordinating the social mobilization activities of the UBCCAs, BSSs and MBSSs as directed by the DBB Manager. The DBB Coordination Committee shall have as member’s representatives of BRDB and DBB including the Project Director and the pilot DBB Manager.

Partly complied with. A DBB Coordination Committee was established in January 2000, but has not been functioning because of the failed implementation of the TA recommendations, among other reasons.


Project Staff Within three months of the Effective Date, the Borrower shall cause BRDB to appoint an appropriate number of qualified and experienced staff to carry out the Project.

Complied with.

Within three months of the Effective Date, the Borrower shall cause Sonali Bank to establish a Microfinance Window in each Project upazila office to carry out microcredit under the Project in accordance with a Banking Plan to be agreed between the Borrower and Sonali Bank and satisfactory to the Bank.

Complied with. Banking plan was approved by Sonali Bank. A microfinance window was established on 14 February 2001.


The Borrower shall cause BRDB to assign experienced and qualified staff for the full period of Project implementation and ensure that their duties and responsibilities towards the Project are already defined.

Complied with.


Primary and Secondary Cooperatives The Borrower shall ensure that at least one UBCCA services each thana in the Project Area. The Borrower shall ensure that the UBCCAs serve the needs of the landless poor by (i) undertaking social mobilization and instilling environmental awareness; (ii) organizing management training for primary cooperative leaders; (iii) organizing skills training; (iv) ensuring eligibility criteria for subborrowers are satisfied prior to any consideration of subloan applications from BSS and MBSS members; (v) ensuring that proper and complete records of individual subloans are maintained; (vi) entertaining and approving on appropriate cases eligible applications for credit; (vii) consolidating applications on a regular and frequent basis for submission to Sonali Bank (viii) supervising field officers; (ix) ensuring proper recovery of all individual group subloans; and (x) participating in regular meetings with Sonali Bank, PMU and PMO to liquidate bad debts.

Complied with.


The Borrower shall also ensure that UBCCAs are formed and registered are delegated authority to register BSSs and MBSSs.

Complied with. MLGRDC gave an order that when a UBCCA is registered it is empowered to register the primary societies within its jurisdiction.

Project Components Landless Poor Societies


TBCCA Declining Support The Borrower shall ensure and cause BRDB to ensure that (i) UBCCAs meet 15% of the UBCCA operating and maintenance costs from TBCCA interest revenue earned from credit operations by the end of the third year of the Project; (ii) UBCCAs meet 50% of the UBCCA operating and maintenance costs from UBCCA interest revenue earned from credit operations by the end of the sixth year of the Project; (iii) the Borrower continues to bear the support required for operating and maintenance costs of the UBCCAs for four years after the Project completion or until the UBCCAs become financially independent,

Complied with.

22 Appendix 2


whichever, is earlier; (iv) eliminating the UBCCA operating and maintenance costs support by the end of the tenth year after the commencement of the Project; and (v) adequate Borrower funding shall be available for the Project’s long-term sustainability for at least four years after the end of the Project. Interest Rates Except as the Bank may otherwise agree and without limiting the generality of Sections 2.02 and 3.01(b) of the Loan Agreement, microcredit shall be made available as follows: Sonali Bank shall charge interest to UBCCAs at an interest rate of 6.25% per annum of which 4.0% shall be retained by Sonali Bank on behalf of each UBCCA as a bad debt reserve fund and no more than 1% shall be retained by Sonali Bank itself; and UBCCAs shall cause interest to BSS and MBSS subborrowers at a market interest rate currently at least 20% per annum, of which 11.75% is retained by UBCCAs for their operating and maintenance costs in order to ensure their self sustainability by the tenth year, 1.0% is retained for incentive payments to BSS and MBSS managers. And 1.0% is retained for incentive payments to field organizers.

Complied with.


Project Revolving Fund Within three months of the Effective Date, Sonali Bank shall establish a Project Revolving Fund. In operating the Fund, Sonali Bank shall ensure (i) revolving accounts are opened in each Sonali Bank branch in the Project area; (ii) all UBCCA loan proceeds which are repaid by UBCCAs, all UBCCA member’s shares contributions and savings are promptly credited to UBCCA designated Savings Accounts earning Savings Account interest at the then prevailing market rates for the benefit of UBCCAs; and (iii) that Sonali Bank maintains the Project Revolving Fund until such time as the Bank in its discretion may require Sonali Bank to dissolve the Project Revolving Fund and credit any balances available in the Project Revolving Fund to any entity as the Bank may designate.

Complied with. Fund established on 14 February 2001.


Banking Plan Except as the Bank may otherwise agree, the Borrower shall cause Sonali Bank to develop and approve a Banking Plan acceptable to the Bank, and implement such Banking Plan in such manner as to facilitate (i) continuous processing, approving and disbursing of subloans; (ii) minimizing waiting periods for subloan approvals and transactions costs of subloan disbursements; and (iii) providing the Sonali Bank Microfinance Window officer sufficient authority to sanction subloans and provide recovery in an expeditious manner and to promote savings and prudent investments by beneficiaries.

Complied with.

Rural Poor Cooperatives Project


UBCCA Declining Support The Borrower, in obtaining continued Bank loan support for 82 upazilas in the previous RPCP project of the Bank under a Loan Agreement between the Bank and the People’s Republic of Bangladesh dated 31 December 1992, shall ensure that (i) support for UBCCA operating and maintenance costs is 60% as at the end of 1998 and reduced by 10 percent annually, and (ii) that the operating and maintenance costs support be completely eliminated by the end of the Project period.

Complied with.


PMU Support The Borrower shall assume any remaining support requirements for the PMU.

Complied with.

Appendix 2 23


Interest rates The Borrower shall ensure that in connection with the RPCP under continued Bank loan support, it shall provide for interest rates on the same terms as provided under paragraph 17 of this Schedule.

Complied with.

Other Matters LA Sched. 6 Para. 23

Debt Amnesty Except as the Borrower and the Bank may agree the Borrower shall make no plan nor otherwise implement debt amnesty or other forgiveness of loan repayment obligations of the Borrower’s cooperative sector including primary or secondary cooperatives.

Complied with.


Poverty Reduction In the Project Area The Borrower shall ensure that BRDB assists poor people defined in terms of households owning less than 0.2 hectares of land or assets with a value of less than 0.2 hectares of land. Such assistance is to be provided through (i) social mobilization involving formulation of BSSs, MBSSs and UBCCAs; (ii) credit awareness training; (iii) training for income operating activities; (iv) microcredit lending; and (v) Rural Upazila Marketing Forum support for microenterpreneurs. The Borrower shall assist and involve such people in designing, developing, implementing and sustaining local economic and income generating activities in a manner conducive to the creation of gainful employment and the development of sustainable economic activity.

Complied with.


Participation of Women The Borrower shall ensure that BRDB takes all necessary steps to have women living in the Project Area participate fully in planning and implementing Project activities BRDB shall ensure that women are appropriately represented in Project social mobilization and training programs, the activities of UBCCAs and in applications for subloans under the credit components.

Complied with.


Benefit Monitoring and Evaluation The PMO shall organize and implement a BME system consisting of (i) preparation of benchmark information, (ii) monitoring of implementation and benefits, and (iii) evaluation of benefits after Project completion. The PMO shall be responsible for the collection of benchmark information and shall be responsible for the collection of benchmark information and monitoring of the social, physical and financial progress of the Project in relation to key information variables, work plans and budgets (constituting the Management Information System). Using the facilities of the BME unit to be established in the PMU and guidance provided in the Bank’s Benefit Monitoring and Evaluation: A Handbook for Bank Staff. Staff of Executing Agencies and Consultants, the Project director shall be responsible for the monitoring and semiannually reporting on changes in the status of beneficiaries through the collection over time of key information including taking subloans, number of self-employed, number obtaining wage employment, subloan recovery performance, as well as socioeconomic data.

Complied with.

As part of its BME responsibilities, the PMO shall be responsible for monitoring subproject compliance with the Borrower’s environmental legislation and informing Project management immediately of adverse impacts of subprojects.

Not complied with. There was no indication that the PMO monitored environmental compliance.

After completion of the Project implementation, the Borrower shall cause BRDB to evaluate the benefits of the Project in accordance with a schedule and terms of reference to be agreed upon with the Bank.

Partly complied with. The BRDB submitted the project completion report, but the impact

24 Appendix 2

Reference Covenant Status

The PMO shall furnish the Bank a more detailed annual report on Project achievements within three months of the end of the fourth quarter each year during Project implementation analyzing performance based on the findings of PMO’s monitoring and evaluation.

assessment was insufficient. Complied with.


Mid-term Review The Borrower shall ensure that BRDB, Sonali Bank, Bangladesh Bank and the Borrower’s Ministry of Finance undertake jointly with the Bank a mid-term review during the third year of Project implementation. Such review shall include issues related to pilot DBB performance, coordination among BRDB and Sonali Bank and other concerned entities including NGOs participation of beneficiaries, constraints affecting Project implementation and other issues to be agreed upon. Based on this review, representatives of the Borrower and Bank in the Mid-term Evaluation shall recommend modifications and improvements in Project implementation arrangements, which recommendations the Borrower shall take into account during subsequent Project implementation.

Complied with. The mid-term evaluation was carried out July – September 2004.


End-Term Review The Borrower shall ensure that the DBB Coordination Committee shall undertake jointly with the Bank an end of project review on the pilot DBB performance during the last year of the Project. Based on this review, representatives of the Borrower and the Bank shall recommend modifications and improvements to the pilot DBB operation, which recommendations the Borrower shall take into account for any future DBB operation.

Not complied with. The DBB Coordination Committee was not formed.


Accounting Review Without limiting the generality of Section 4.06 of the Loan Agreement, the Borrower shall ensure that within three months of the Effective Date, BRDB adopt an accounting system for Project UCCAs and UBCCAs based on BRDB’s reviews of recommendations of studies supported by bilateral donors as well as BRDB’s experience with the accounting system used under the Borrower’s Rural Development Project 12 and other similar projects.

Complied with.


The Borrower shall cause BRDB to install an accounting system consistent with generally acceptable accounting principles and acceptable to the Bank in all Project UCCAs and UBCCAs. Each year during Project implementation, BRDB shall have all Project UCCAs and UBCCAs audited by private auditor’s opinions to the Borrower and the Bank within 12 months of the end of the fiscal year under review. The BRDB assisted by the PMU shall be responsible for furnishing the Bank copies of all Projects audit reports prepared by BRDB and Sonali Bank including Project completion reports.

Complied with.


Environmental Considerations The Borrower acting through BRDB shall cause the Project UCCAs and UBCCAs to comply with the Borrower’s environmental rules and regulations. In addition, the Borrower shall cause Sonali Bank to submit subproject proposals exceeding in cost of Tk 200,000 to the Borrower DOE for environmental classification, review and approval. For any subproject classified by DOE as having as potentially negative approval. For any subproject classified by DOE as having a potentially negative environmental impact, the PMU with the assistance of DOE shall ensure that an IEE and summary IEE is prepared for submission and approval for the PCC. If such an IEE determines that preparation of an EIA is warranted, the PMO with the assistance of DOE shall ensure

Not complied with. There was no evidence that Sonali Bank submitted subproject proposals for environmental classification.

Appendix 2 25


that an EIA or summary EIA is prepared for submission and approval of the PCC. The PMU shall also send to the Bank for information a copy of any such EIA together with the decision of the PCC relating thereto to the Bank within one month of such decision. Reporting Requirements Without limiting the generality of Section 4.07 of this Loan Agreement or paragraph 26 of this Schedule, the Borrower shall cause BRDB and Sonali Bank with the assistance of the PMO to report to the Bank every three months during Project implementation concerning Project activities and overall Project implementation. Concerning BRDB such reports shall include information-describing expenditures on the Project, progress concerning all Project activities. Concerning Sonali Bank such reports shall include information on commitments and disbursements as well as collections and arrears. Such reports by BRDB and Sonali Bank shall be furnished to the Bank within six weeks of the end of the period under review.

Complied with.

BME = benefit monitoring and evaluation, BRDB = Bangladesh Rural Development Board, BSS = Bittaheen Samabaya Samity (landless men’s cooperative), DBB = District Bittaheen Bank, DBBC = DBB Committee, DOE = Department of Environment, EIA = Environmental Impact Assessment, IEE = Initial Environmental Examination, LA = Loan Agreement, MBSS = Mohila Bittaheen Samabaya Samity (landless women’s cooperative), MLGRDC = Ministry of Local Government, Rural Development Cooperatives, NGO = nongovernment organization, PCC = Project Coordination Committee, PMO = Project Management Office, PMU = project management unit, RPCP = Rural Poor Cooperative Project, UBCCA = Upazila Bittaheen Central Cooperative Association, UCCA = Upazila Central Cooperative Association.

rural livelihood project - asian development bank · i. project description 1 ii. evaluation of...

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