Background of the Program:

UNNAYAN has launched its microfinance program in 1983 to promote increase of income and livelihood of the poor beneficiaries. Based on long term experience, UNNAYAN realizes that, Microcredit is insufficient to tackle poverty and that the poor also need a package of other services for their economic empowerment, resulting in microfinance. While microfinance has produced benefits, it is not enough as it has failed to reach the poorest of the poor. Considering the problem, UNNAYAN follows an Integrated Development Approach (IDA) in operating its microfinance program aims to alleviate poverty not only through income generation but through a holistic approach targeting a package of other interventions centering a community. Integrated Development is the system of collectively implementing health, economic, and education initiatives to strategically meet a community’s development goals.

Microfinance has been regarded as the vital program of UNNAYAN in respect of beneficiary size, working area, volume of capital and belongingness. All other programs/activities strategically are based or centered on microfinance. Efficient management system and tools, linkage with financial institutions, identification of alternative micro-schemes, approach to address the poorest of the poor section and access to the remotest and hard-to-reach locations have added an extra dimension to UNNAYAN’s microfinance program.

UNNAYAN receives credit funds and operational backstop support from PKSF since June, 1993. The program covers target beneficiaries like ultra-poor, poor, small/marginal farmers, businessmen, fishermen, entrepreneurs, coastal people, etc. In all, 33276 beneficiaries are involved in the microfinance program of UNNAYAN.

Program Strategies:

UNNAYAN follows integrated development approach (IDA) with micro-finance as the centre point of development. The important strategies of the program include:

  • Upholding MRA rules and regulations
  • Diversity products to meet beneficiaries demands
  • Special emphasis on sustainability of its borrowers
  • Easy ad close communication among employee as well as between employees and beneficiaries
  • Dynamic and forward-looking leadership
  • Decentralization and delegation of authorities to the bottom-line officials
  • Participatory process in decision making
  • Special provision and emphasis on micro enterprise loan to advance/graduate members for creating employment opportunities
  • Implementing cluster-based development activities through mobilizing all sorts of local level resources and providing need-based information and technologies to the beneficiaries and communities
  • Ensuring maximum of savings and promoting micro insurance as the part of borrowers’ resource mobilization and safety of the disbursed credit
  • Special priority on the agricultural development projects
  • Strong monitoring and supportive supervision
  • Establishing and maintaining Go/NGO/Private organizations and national/international donor agencies
  • Special focus on women’s empowerment
  • Risk and transaction cost reduction

Highlights of the Program

  • Micro-finance program of UNNAYAN has been operating in Satkhira, Bagerhat, Khulna and Jashore through 30 branches
  • Number of Members is 33276
  • Number of borrowers is 24842
  • Savings mobilization balance is BDT 188,192,499
  • Outstanding is BDT 568,428,846.00
  • One-time recovery rate 95.97 Percent

Major Objective of the Programme:

The specific objectives of the microfinance program are to:

  • Make credit available to the poor people having no or very limited access to existing (formal) credit facilities
  • Help create self-employment and sustainable income to the target people through income generating activities (IGA) and enterprises
  • Ensure livelihood security of the beneficiaries
  • Mobilize savings for the poor
  • Reducing dependency on moneylenders
  • Empower women
  • Enhance income of the organization for its sustainability.

Major Activities & Services:

  1. Group Formation
  2. Member Admission
  3. Borrower
  4. Loan Disbursement
  5. Savings
  6. Outstanding
  7. One-time recovery rate (OTR)

Major Activities and Services

Formation of Groups (Samity)

Formation of samity is the 1st step in microcredit operation. UNNAYAN forms homogeneous groups with the beneficiaries. A group consists of 15-30 members generally, with an average number of 20 in each group. The purpose of samity is to build discipline, unity and solidarity among its members. Weekly meeting, group savings, fund generation, realization of credit installment, process of new credit proposal, decision making are its regular activities. These activities are encouraging the poor people especially the rural women towards development, their leadership capacity and enhancing their participation in social functions.

Micro Savings

Savings mobilization by the Samity members involved in microcredit is mandatory and is considered as an important and integral part of microfinance operation. Regularity in savings indicates existence of better discipline in the group and its credit activities. Group members can use savings to overcome the odds or unfavorable conditions by using the money saved. By savings program, they can also enhance their capital and become better off. UNNAYAN has given utmost priority to savings of the members. Savings products include:


Regular Savings (Weekly):

Regular savings is a compulsory savings for the members and a compulsory option to avail loan. UNNAYAN accumulates the small savings of individuals for creating its own capital. Borrowers have to engage in savings on regular basis-weekly. Members have to deposit/save minimum Tk. 50 per week and BDT 100-200 per month by using pass book in scheduled group meetings which are deposited to banks by the branch offices. They get their interest as per bank rate. When a member leaves from UNNAYAN, she/he can withdraw full amount after recovering of dues.

Regular Savings (Monthly):

It is an optional savings program of UNNAYAN aims to ensure financial safety and security of a family. Members may deposit minimum BDT 100–5000 in monthly deposit scheme of 3, 5 and 10 years. A depositor can withdraw his/her savings anytime by following some rules and regulations.

Voluntary Savings:

In voluntary savings, members can also save small amount according to their ability. Voluntary savings can be deposited and withdrawn at the will of the members. This product of UNNAYAN is designed in such a manner that it could address the problems of the borrowers arising out the sudden and unpredicted necessities and wants for money. The members always enjoy the right to withdraw the savings with interest in their crisis period.

SVSP (One Time) Savings:

UNNAYAN introduced Special Voluntary Savings Program one-time depositing savings product to bring the staff members as well as staff members of the remote areas (without banking facilities) under the savings coverage. It was also introduced in the areas where there is no or limited environment/scope for investment. Any person, especially member and staff, can deposit any time, any amount for a specific period of time. Savers can withdraw his/her savings, any time (especially in the emergencies), however, with a notice period of minimum 1 week. Savers are entitled to get profit for the period of savings, but s/he is to keep the money at least for 90 days (3 months).

Member Welfare Fund

UNNAYAN looks after its beneficiaries through ‘Member Welfare Fund’ since 2001. Before disbursement of the main credit, 7 takas per 1000 is realized cash as premium and deposited in the member welfare fund. This money will not be refunded during the beneficiary’s lifetime. Beneficiaries whose crops, homesteads and credit-supported small trades are affected or damaged due to natural or man-made disasters are assisted through the welfare fund thus generated. In case of death, beneficiaries are exempted from loan after adjustment with their welfare funds (savings). If their husbands or the sons implement the IGA on behalf of the beneficiaries, the former are also exempted from the loan after adjustment with welfare fund in case of their death.

Loan Products and Services

UNNAYAN started microcredit service with the aim to create self-employment which reduces their dependency on the moneylenders and also promotes women’s empowerment. UNNAYAN develop groups with the beneficiary members. Members have to wait for only 7 days after their registration to get the first loan. Commonly, weekly or monthly installment process is followed for repayment and the first installment process is given in the 2nd week of the loan i.e., borrower gets two weeks grace period. The service charge is calculated flat on the principal of the loan. Loan size of UNNAYAN ranges from BDT 5000 to 10 lakh as per requirement. UNNAYAN provides collateral free loan to the poor in both rural and urban areas in a simple, efficient and affordable manner. The borrowers use these loans to engage in various income generating activities to improve their socio-economic status. They repay the loan installments from a portion of profit. A small part of the profit is also used to buy necessary things for the family. A large number of borrowers are becoming self-reliant gradually through operation of the IGAs.

Since the poor do not constitute a homogeneous group, one-size-fits-all types approach with microfinance will not be effective for all categories of the poor. UNNAYAN addresses this problem by offering differentiated financial services designed according to the needs of different types of people. The microfinance program has the following major products (interventions) each targeting specific sections of population.

Microfinance Products/Components