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Diversification of Microfinancial Services: The Case of BURO, Tangail in Bangladesh
Alamgir, D. A. H.
Publication Date: Nov 2000
Published by: Initiative in Research and Education for Development in Asia - INASIA
Document Type: Case Study
Is micro financing sustainable?
In this paper, the author focuses on features of microfinance program that differentiate the Bangladesh Unemployed Rehabilitation Organization (BURO), Tangail from other microfinance institutions (MFIs).
The author provides a brief overview of MFI in Bangladesh followed by brief description of structure, mode of operation and management of microfinance program of BURO, Tangail. Some of the key features that distinguish BURO, Tangail from other MFIs are:
- Flexible saving products: These vary from general savings to open savings deposit, contractual savings and time deposit for members. This coupled with flexible withdrawal facility; there has been a growth in savings mobilized of 60.65 percent.
- Variety of credit products and services: its credit portfolio range varies from general loan to supplementary loan, line of credit, disaster loan, project loan and special loan for sanitation and tube-well. The recovery rate of various products since 1995 has been over 98 percent.
BURO, Tangail operates in 1374 villages with 41 branches. It commenced operations with 5 branches and now provides services to over 67,000 members/customers. Since 1996 it has been posting profits without donor grants. However, it is still accepting grants to use it as leverage against future borrowing.
The author concludes by pointing out some courses of action such as move to urban areas, rationalization of interest rates etc. that it should take to sustain and enhance its profitability.
This paper was presented at the INASIA/CDF Regional Conference, "The Potential and Limitations of Economic Initiatives in Grassroots Development: Current Issues and Asian Experiences", Rajendrapur, Bangladesh, 27-30 November 2000
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