67pc ultra poor spend NGO money on non-productive purposes

Says survey

29 June 2010, 18:00 PM

Staff Correspondent

Around 67 percent ultra poor people, who take micro-credit from different NGOs, spend their money for non-productive purposes, which ultimately do not help reduce their poverty, according to a survey released yesterday. The World Food Programme (WFP) conducted the survey on different households in Bogra, Sirajganj and Pabna districts. “We find this trend very worrying. It won't help them get out of poverty,” said Michiel Meerdink, who presented the survey titled “Access to Credit” at an annual review workshop of Food Security for Ultra Poor (FSUP) at the Spectra Convention Centre in the capital. The survey found that 50 to 75 percent ultra poor people have outstanding loans from various sources while 40 percent of these people took loans from different microfinance institutions. This means, around 20 percent of the total micro-credit borrowers take loans from the NGOs, said Michiel, project coordinator of FSUP. FSUP is a 43.50 million euro (around Tk 450 crore) project that started in January 2009 and will end in December 2013. The project targets 135,000 ultra poor households in rural areas of Rangpur, Bogra, Sirajganj, Pabna, Gaibandha, Netrokona, Sunamganj and Kishoreganj districts. WFP, Islamic Relief Worldwide (IRW), CARE and Interchurch Organisation for Development Cooperation (ICCO) are implementing the European Union (EU)-funded project with their partner NGOs. Under the project, the ultra-poor households, whose monthly income is now only Tk 2,200, are provided with grants and income generation skills to uplift their status to non-poor from ultra-poor. The project aims to increase their income by at least Tk 1,000 on top of their existing income, Rakib Hossain, programme officer of FSUP's WFP component, told reporters on the sideline of the workshop. Under the FSUP project, they are now providing monthly subsistence allowance of Tk 500 to every household along with income-generating and life skill training. At the end of the training, he said, each of the beneficiaries will be provided a grant of Tk 14,000, with which they will get involved in rearing goats, cows, poultry or other occupations like tailoring or invest in cultivation. “There are no right or wrong answers, but it may be the time to rethink on the role of micro-credit for the ultra poor vis-à-vis asset transfer," said Michiel. CARE is implementing the project in Kishoreganj, Sunamganj and Netrakona while ICCO in Gaibandha and IRW in Rangpur districts. “Our projects can't solve the problems of the whole country, but are focusing on the highly food insecure areas with critical poverty levels,” said Jorge Nieto Rey, team leader of programme coordination unit of FSUP.