Islamic Relief, Bangladesh

Project Proposal
on

Poverty Reduction of Vulnerable Households through Small Scale

Enterprise Development (PROVED) project

Project Duration:
18 Months

Location
Rangpur District in Bangladesh

Submitted by Submitted to
Islamic Relief, Bangladesh Islamic Relief Worldwide
House-10, Road-10, Block-K
Baridhara, Dhaka, Bangladesh
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Table of Contents

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

2. Relevance of the project............................................................................................................ 4
2.1. Problem statement................................................................................................................. 4
2.2. Project Strategy:.................................................................................................................... 5
2.3. Rational of financial services through Islamic principles:.......................................................5
2.4. Islamic micro-financing through self-help group:....................................................................6
2.5. Description of project participants, their needs and how the needs will be addressed:..........7
3. Objective and result description................................................................................................. 8
4. Description of the interventions................................................................................................ 10
2.6. Activities for result-1;............................................................................................................ 10
2.7. Activities for result-2;............................................................................................................ 14
2.8. Activities for result-3;............................................................................................................ 16
2.9. General activities................................................................................................................. 18
5. Implementation strategy........................................................................................................... 21
6. Project Management................................................................................................................ 22
7. Gantt chart............................................................................................................................... 23
8. Risk and assumption................................................................................................................ 24
9. Sustainability............................................................................................................................ 25
10. Logical framework matrix......................................................................................................... 26
11. Budget of the project................................................................................................................ 28

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1. Summary of the project
Title of the project Poverty Reduction of Vulnerable Households through Small Scale Enterprise
Development (PROVED) project
Objective of the Overall objective: To contribute towards achieving MDG1 (reduction of poverty and
action hunger) through improving livelihoods of the rural poor people in North-West part of
Bangladesh.
Specific objective: To sustainably increase incomes of 4500 poor households in
Rangpur district of Bangladesh through self-help group approach to small scale
enterprise financing using Islamic finance principles and strengthen Islamic Relief
Bangladesh’s capacity for enterprise financing programmes.
Project Location Rangpur District in Bangladesh
Project participants 4500 poor households in Rangpur district of Bangladesh.
Proposed results Result-1: Formation and strengthened functions of 225 self-help groups to develop a
model of enterprise financing based on Islamic finance principles and on a revolving
fund basis.
Result-2: Enhanced potential livelihood options of targeted households for increasing
income and assets.
Result-3: Developed, documented and disseminated lesson learning to strengthen
Islamic Relief, Bangladesh’s small scale enterprise financing initiatives and influence
policies related to Islamic micro-finance.
Key activities Key activities for achieving result 1:
- Community consultation, need assessment, project participants identification.
- Formation and strengthening Self-Help Group (SHG).
- Awareness building of Self-Help Groups.
- Capacity building of SHG members/leaders.
- Institutionalization of SHG.
Key activities for achieving result 2:
- Conduct livelihood assessment to identify locally available and feasible farm,
nonfarm IGAs (NOTE: this baseline will be used to measure programme
impacts).
- Develop household level business plan.
- Conduct skill transfer training based on TNA.
- Livelihood assets support on revolving basis for SHG members.
- SHG-led Islamic micro-financing.
- Conduct regular monitoring and follow-up.
Key activities for achieving result 3:
- Organize training on Islamic microfinance for staff/practitioners (IRB and outside)
- Organize seminar on Islamic microfinance (regional and national level).
- Update Islamic Relief Bangladesh’s microfinance manual.
- National level policy dialogue and advocacy on Islamic microfinance issue.
- Conduct Shariah Audit.
- Develop MIS software.
- Pilot for creating online lending platform on microfinance.
- IEC materials development and publication.
- Lesson learning documentation.
- Conduct research work and publish working paper on Islamic micro-finance.
General activities:
- Staff recruitment and capacity building.
- Office set-up
- Conduct baseline survey.
- Conduct midterm review and final evaluation.
- Coordination, communication and visibility activities.
Project Duration October 2012 to March 2014 (18 Months)
Expected Budget 260,000 GBP

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Donor DFID through PPA

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2. Relevance of the project

2.1. Problem statement

With 142.3 million populations (Population Census 2011), Bangladesh is one of the
world's most densely populated and 8th populous among countries in the world.
According to Human Development Index (HDI) 2011, Bangladesh ranked 146th out of
187 countries. Bangladesh Statistical Bureau, (BSS, 2009) shows that 41.2% of people
are living below poverty line. Among this, 31.9% are poor and 9.3% are ultra-poor.
Poverty and food insecurity of Bangladesh has been significantly and adversely
influenced by various factors. North-west part of Bangladesh is one of the poorest
regions among other areas of Bangladesh. In 2010, Bangladesh Bureau of Statistic
(BBS) estimated poverty rate in north-west in Bangladesh - 30.1% (lower poverty line)
and 46.2% (upper poverty line). Seasonal unemployment is common phenomena in this
area. Consequently, unemployment creates monga (‘Monga’ is a Bangla word, means
seasonal food crisis) in every year during a particular period.

The major problems of the households are poverty and livelihood insecurity. Targeted
poor households face lack of capital and productive assets; do not have required skills
and capacity to involve with framing and non-farming activities. They do not have
access on cultivable land. High levels of inequity and social marginalization exacerbate
overall poverty and livelihood insecurity, denying access to natural resources and
services. Patriarchal system and gender inequity results in further marginalization of
women. Lack of demand for agricultural labor in the monsoon and drought season,
combined with extremely limited access to land and to markets severely limits
employment and income generating opportunities. Male members migrate to urban
areas for temporary work, which makes the life and livelihood of the poor women in the
areas dependent and vulnerable. Women have limited mobility and traditionally not been
engaged in commercial or trading activities. Women are further constrained by their lack
of awareness, social isolation and lack of decision-making power. Weak government
and limited local capacity perpetuates the above issues.

Recognising these issues and learning from its global experience, Islamic Relief aims to
explore sustainable solutions for underserved rural households as part of a capacity
building programme funded through IRW’s Programme Partnership Agreement (PPA)
with DFID. Such a sustainable livelihoods approach, based on an Islamic microfinance
model requires a concerted effort and collaboration from all stakeholders including the
government, the private sector and civil society organisation and individuals.

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2.2. Project Strategy:

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

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

Islamic Relief Bangladesh started microfinance programme in 2001. Gradually small

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

2.3. Rational of financial services through Islamic principles:

Islamic financing is an emerging concept in Bangladesh, although Bangladesh is the

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

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

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

In considering the above issues, Islamic micro-financing is an opportunity for Muslim

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

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

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

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

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

The direct project participants will be 4500 poor and marginalized women (age – 18-50
years) in targeted areas. In wealth ranking, they will be bottom line households in
community. They do not have significant productive assets; income level is low and
irregular (average $ 05 - 20 USD per week); no scope of savings and limited access on
traditional micro credit; day laboring is the main occupation; majority of them are land-
less or limited access to land; they do not have potential livelihood options; face food
crisis round the year or in particular period; do not have adequate skills and capital to
improve livelihood; and are not united to build networks and attend rights.

The project will facilitate women to organize themselves in self-help group. Regular
meeting and consultation will be continuing to strengthen the groups. Based on need
assessment, productive assets and skills will transfer among the selected group
members. Self-help financing will be continuing within the groups. The project will
facilitate to promote women’s accessibility and empowering them for assessing their
rights.

The project will also facilitate to develop unique model of Islamic microfinance to
expanding alternative approach of microfinance other than conventional microfinance.

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3. Objective and result description

The overall objective of the project is “ To contribute towards achieving MDG1

(reduction of poverty and hunger) through improving livelihoods of the rural poor people
in North-West part of Bangladesh” and the specific objective is “to sustainably increase
incomes of 4500 poor households in Rangpur district of Bangladesh through self-help
group approach to small scale enterprise financing using Islamic finance principles and
strengthen Islamic Relief Bangladesh’s capacity for enterprise financing programmes.”

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

Result-1: Formation and strengthened functions of 225 self-help groups to develop a

model of enterprise financing based on Islamic finance principles and on a revolving
fund basis

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

It can be argued that women’s economic empowerment is a precondition for sustainable

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

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

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

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

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

Result-3: Developed, documented and disseminated learning to strengthen Islamic

Relief Bangladesh’s small scale enterprise financing initiatives and influence policies
related to Islamic micro-finance.

Islamic microfinance is an emerging issue in Bangladesh while the impact of interest-

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

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4. Description of the interventions

2.6. Activities for result-1; Formation and strengthened functions of 225 self-help
groups to develop a model of enterprise financing based on Islamic finance
principles and on a revolving fund basis

4.1.1. Community consultation, need assessment, project participants identification

Community consultation will be the entry strategy to mobilize community and create
common interest to move forward for their self-development. The trained project-staff will
facilitate community consultation using PRA tools (transect walk, community meeting,
key informant interview, social mapping, focus group discussion, wellbeing analysis,
consensus building meeting, community planning). Participation of all level of peoples
will be ensured in PRA. In the process of PRA, the community’s problems will be
identified and aid them to articulate priorities. Wealth ranking will facilitate the
identification of the poorest group of households who may be included as project
participants. Generally, following criteria will be followed to select project participants:
- Poor and marginalized women (age – 18-50 years) who are active in
economic activities, who are landless or own 05-50 decimal cultivable land.
- Bottom-line households in the targeted community.(who are under upper
poverty line)
- Do not have significant productive (cattle, cultivable land) assets.
- Income level is low and irregular (less than 1 US$ per person per day - PPP)
- No scope of savings and limited access to traditional micro credit
- Day laboring is the main occupation.
- Do not have sustainable livelihood options (irregular daily labourer or
seasonal agricultural labourer)
- Face food crisis round the year or in particular period
- Do not have adequate skills and capital to improve livelihood; (no capital to
start petty business and are unskilled laborer)
- Are not united to build networks and attend rights. (they are unaware of their
entitlements)

4.1.2. Formation and strengthening Self-Help Group (SHG)

Self Help Group: It has been realized in many parts of the world that an effective way to
tackle poverty and to enable communities to improve the quality of life is through social
mobilization of disadvantaged people, especially into Self Help Groups (SHGs). The
concept of Self Help Groups is based on the idea of community participation, as
sustainable community development requires the active participation of the entire
community. Peoples’ participation ensures that the benefits of development are
equitably distributed. To further this, focus of self-help groups is to develop the capacity
of the disadvantaged, particularly women, and to organize them, so that they can deal
with socio-political and socio-economic issues that affect their lives. The women
mobilize in small groups for savings & credit for improving the economic conditions of
the individual women. Inter-loaning meetings increase their confidence in themselves.
Micro-capital assistances raise their hopes for starting small enterprises for generating

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more money thus improving their overall economic condition. Apart from IGA the groups
are instrumental in tackling the village issues such as water problem/social issues,
violence against women, family crisis and negotiating with the local leader for getting
their rights within the village. The primary focus of self-help groups is to provide
emotional and practical support and an exchange of information. Such groups use
participatory processes to provide opportunities for people to share knowledge, common
experiences, and problems. Through their participation, members help themselves and
others by gaining knowledge and information, and by obtaining and providing emotional
and practical support. Self-help groups are voluntary, and are led by members.
Generally, groups meet on a regular basis, are open to new members, and do not cost
money to join. Traditionally, self-help groups have been in-person meetings. self-help
group, nonprofessional organization formed by people with a common problem or
situation, for the purpose of developing their living standards, livelihood options,
gathering information, and offering mutual support, services, or care. The group should
maintain simple basic records such as Minutes book, Attendance register, Loan ledger,
General ledger, Cash book, Bank passbook and individual passbooks.

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

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 - Behavioral, ethical, and social aspects are addressed in light of Islamic
teachings.
- Benefitting the whole family through women.
- Dealing with Arrears/Default is less aggressive and use Islamic teachings to
recover the money of loans.

Number of Self-Help Group members:

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

Particulars of SHG members Numbers of SHG members

New SHG members 1500
Community Action Project (CAP) group members 1200
Middle East funded SHG 900
FISCAL’s SHG 400
SAFOLLO project’s SHG 500
Total: 4500

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

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

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

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

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

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

After a four-week orientation session of the SHG meeting, group members can apply
for assets/goods which they intend to do business with, members of the group who
apply for goods/assets must be present in the consecutive 4 weeks meeting to fulfill
the criteria of qualifying for loans. Community Organizer will be responsible for
preparing appraisals and project officer will verify and after verification PM/MF Expert
will approve to procure income generating assets for the members. Goods with the
approved amount will be purchased through a “Goods purchase Committee”
comprising with community organizer, group member herself and one group leader of
the SHG. CO/PO will take initiative to give them information regarding market
facilitate and other information. Livelihood assets support fund will be given to the
group as following conditions and processes:
- Initially, income generating asset will transfer instead of cash amount.
- All the members will be given the same amount for IGAs.
- In generally, the support will provide for investing income generating activities
such as cow rearing, goat rearing, vegetables cultivation, rice cultivation, rural
transport (rickshaw and van pulling), small trading, paddy husking, rural
handicrafts, tailoring, food processing etc.
- Funds will be provided to SHGs without any profit requirement, although the
SHG in turn will finance in the murabaha mode (mark-up sale).
- Group members will repay the amount in weekly basis in the meeting and
deposit to the SHG account nearby bank/MFI.
- No arrears would be allowed.
- Project management will determine the additional fund whether required or
not.
- All the collection money should be deposited into the bank on the same day.
- Record should be kept for all the payments by the group ledger book
- CO will verify the accuracy of the repayment and bank deposit in every week
- Permission will be sought from the project management if there is any need to
withdraw any amount from group account.
- An agreement will be signed between the project management and every
SHGs separately which contains the details how to use the fund and when
the group will be owner of this fund.

4.1.3. Awareness building of Self-Help Groups

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

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

4.1.4. Capacity building of SHG members/leaders

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

4.1.5. Institutionalization of SHG

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

2.7. Activities for result-2; Enhanced potential livelihood options of targeted

households for increasing income and assets.

4.2.1. Conduct livelihood assessment to identify locally available and feasible farm,
nonfarm IGAs
In this respect, respective IR Bangladesh staff will develop a structured questionnaire
with some specific criteria, informed by IRW’s SFA2 key performance indicators, the
PPA Islamic Microfinance Strategy and IR Bangladesh’s strategy. To identify
livelihood as well as income generating options of selected villages and targeted
households, the project team will conduct in-depth analysis of livelihood addressing
the issues of seasonality, experiences, potentialities, risk, opportunities, markets,
cost benefits, acceptances, environment etc. In the process of household level
livelihood analysis, project staff will follow structural format and tools to measure
livelihood opportunities for next course of actions and support. In this process,
participation and opinions of all level should effectively be addressed.

4.2.2. Develop household level business plan

The project officer will facilitate the development of a business plan for each targeted
household. It will be a tentative roadmap for advancing livelihoods options as well as
increasing income for next years. The business plan will be developed based on

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

4.2.3. Conduct skill transfer training based on TNA

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

4.2.3. Livelihood assets support on revolving basis for SGH members

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

4.2.4. SHG-led Islamic micro-financing

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

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

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

4.2.5. Conduct regular monitoring and follow-up.

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

2.8. Activities for result-3; Developed, documented and disseminated lesson learning
to strengthen Islamic Relief, Bangladesh’s small scale enterprise financing
initiatives and influence policies related to Islamic micro-finance.

4.3.1. Organize training on Islamic microfinance for staff/practitioners (IRB and

outside)
Islamic microfinance is an emerging market in the field of Islamic finance, hence
there is a need to train and raise awareness campaigns on this subject, given its
potential to provide a viable alternative to conventional interest-baring microfinance
products. The aim of this training is to orient about importance of Islamic
microfinance and differentiate between conventional and Islamic microfinance for
microfinance professionals. The training course will introduce Islamic finance; the
Shari'ah foundation and applications of Islamic microfinance; microfinance and its
product mechanism; Islamic microfinance products; different models and deposit
management in Islamic microfinance etc. Participants of this training course will be
microfinance professionals and experts, development activist, NGOs/INGOs
professionals. External expert trainer(s) on Islamic microfinance will be hired for
conducting the training course.

4.3.2. Organize seminar on Islamic microfinance (regional and national level)

Day-long seminar on Islamic microfinance will be held on national and regional level
to disseminate knowledge of Islamic microfinance. The seminar participations will be
different level stakeholders like microfinance practitioners (conventional and Islamic),
NGO/INGO, Govt. officers of line department, Bankers, Donor agencies, civil society
members etc. Through the seminar, participates will have scope to learn about
principles and operational aspects of Islamic microfinance. Islamic microfinance
scholar or specialist will present key paper on the seminar. The seminar will promote
awareness of Islamic Microfinance among the related government officials, NGOs,

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

4.3.3. Update Islamic Relief Bangladesh’s Islamic microfinance manual

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

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

Islamic microfinance has become an increasingly popular mechanism for alleviating

poverty, especially in developing countries with large Muslim populations such as
Bangladesh, where interest charged might act as an additional access barrier that
poor, yet observant Muslims experience. But the current rules of MRA are in favor of
conventional microfinance, not considered Islamic microfinance in their model of
operations. Although, few organizations/MFIs are trying to establish a system of an
Islamic microfinance operation model in Bangladesh, but to fulfill the MRA
requirements whilst maintaining Islamic Shari’ah principles by the IMFIs causes a
number of operastional conundrums around, for example, reserve policies. To
sensitize and demonstrating the need for Islamic MF to the Authority and other
government stakeholders IRB will arrange policy dialogue sessions with respective
authorities and stakeholders for formulating or including Islamic microfinance policy
and procedures.

4.3.5. Conduct Shariah Audit

To ensure transactions, operations policies and activities comply to Shariah
principles, Shariah audit needs to be conduct periodically. Shari’ah auditors perform
audits on both objective information (financial information/standard e.g. profit
distribution) and subjective information (Shari’ah opinion/fatwa/standard) to ensure
Shari’ah compliance. Shariah audit will be conduct by external Shariah auditors for
review IRB’s microfinance program in Shariah point of view.

4.3.6. Develop MIS software

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

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

4.3.7. Pilot for creating online lending platform on microfinance

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

4.3.8. IEC materials development and publication

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

4.3.9. Lesson learning documentation

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

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

2.9. General activities

4.4.1. Staff recruitment and capacity building

A total 17 fulltime (Microfinance Expert/Project Manger-1, Brach Manager-2,
Monitoring Assistant-1, Internal Audit Assistant-1, Project Assistant-1, Procurement

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Assistant- 2, Community Organizer- 5, Intern-1, Messenger cum Cleaner-3) and 2
part-time (Program Manager-20%, Accountant-50%) staff will be recruited for the
implemention of the project. Islamic Relief, Bangladesh will recruit project staff
through the recruitment circulation (need base) in the daily newspaper/web based
sources. Existing experienced and committed staff can be deployed to the project for
full time engagement through the competitive process. Apart from the direct project
staff, senior management staff (sharing) of IRB will provide need base assistance to
the project. The human resources of the project will function according to project
organogram. Job description of each staff will be provided during offering to select
staff. Working station of each staff will be segregated basis on her/his duties and
responsibilities. To develop the capacity of the staff and smooth implementation of
the proposed activities there will be a process of capacity building through training,
coaching, mentoring, orientation, etc. At the first quarter, the IRB will arrange 5 days
long residential foundation training for all staff of the project to enrich their
understanding on the project, and implementation methodologies and Islamic micro-
financing. In the 2nd year, the project will organize 3 days refresher training on above
mentioned course.

4.4.2. Office set-up

There will be one project office to coordinate all project activities. Necessary furniture
& logistic support will be purchased by IRB for the office. Table, chairs, shelf/storage
unit, computer with internet facility, scanner, generator, fan, photocopier, etc will be
provided to the office as per necessity. Apart from that, a mobile phone set with
connection, rental vehicle, motorcycles, bicycles, etc. will be available for the project
staff for proper communication and smooth implementation of the project. Within 1 st
quarter, targeted office set up and necessary logistic will be ensured. In this regards,
IRB will use existing office equipments and logistics considering availability.

4.4.3. Conduct baseline survey

A participatory baseline survey will be undertaken at the very beginning of the project
which can allow us to determine the present status of the proposed project areas.
The evidences so generated shall not only be the benchmarks for our on-going
monitoring processes but shall also be used for identifying issues for advocacy with
the duty-bearers of the region and/or country. Both qualitative and quantitative
method shall be used for this purpose. In this respect, respective project M&E staff
will develop a structured questionnaire, checklist and conduct field test. After
incorporating the field test information, PDMER unit will finalize the questionnaire
consultation with project staff. IRW universally baseline instruments will also follow in
conducting this baseline. An orientation session on the questionnaire will be
conducted for clear understanding of the data collector/field facilitator who will be
recruited only for the data collection, editing & coding purposes. The Monitoring
Officer will supervise the data collection process and provide regular feedback to the
concern authority. Baseline data collection process will be completed within 1st
quarter. The survey will be done through both internally and/or externally. IR-B will
be responsible for the overall process of baseline survey, guided by the impact
assessment system that IRW’s Global Micorfinance Advisor is currently developing.

4.4.4. Develop M&E plan for the project

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To keep the project activities on track and assess the progress, effectiveness, impact
of the project, the project manager will develop a well defined monitoring &
evaluation plan. There will be clear indication for implementation methodologies of
the overall MIS, monitoring and evaluation activities of the project. It is envisaged that
M&E and social performance management will be integrated into the MF MIS to
ensure that impact assessment becomes an integral part of project management.

After reviewing all the relevant documents (project proposal, logical frame work,
action plan, project participants selection guideline, etc.) of the project, a 2 days long
workshop will be arranged at 1 st quarter with 20 participants involving project M&E
staff and concerned project staff lead by PDMER department. A draft M&E tools,
techniques and guideline will be developed from the workshop and after piloting and
sharing, a final M&E plan will be developed. Later on, the final Monitoring and
Evaluation plan will be institutionalized through organizing an orientation session for
relevant staff of the project. The Project will follow the final monitoring and evaluation
for the project period.

4.4.5. Conduct midterm review and final evaluation

To assess efficiency, relevance, effectiveness impact and sustainability of the
project, midterm review and final evaluation will be conducted. A mid-tern review will
be conducted by the PDMER at 5th quarter of the project. A ToR will be developed for
conducting the assignment in consultation with the IRW Global Microfinance Advisor.
Both qualitative and quantitative methods shall be used for conducting midterm
review. All the process like develop data collection tools, staff orientation, data
collection, data analysis, draft report preparation, etc will be done by the PDMER.
Incorporation of feedback from different stakeholders, report will be finalized. The
same methodology will be followed for the final evaluation and it will be conducted at
the last quarter of the project.

4.4.6. Coordination, communication and visibility

To keep the project on the right track, to assess the periodical progress, find out the
drawback of the project and preparation monthly & quarterly plan, a regular
coordination meeting will be conducted. At the project level, monthly coordination
meetings will be held with the participation of all field staff. In this meeting, all the
participants will share the status of their targeted activities which will be compiled for
reporting/documentation. Apart from the above mentioned coordination meetings,
quarterly Project Steering Committee meeting will be organized in every quarter.

In order to ensure proper visibility of the project which is funded through IRW
Partnership Programme Agreement (PPA) with DFID, a visibility plan will be
developed. For appropriate communication with different stakeholders, there will
have a communication plan also. There will be clear indication for implementation
methodologies of the overall guideline of visibility and communication of the project.
For the visibility purpose, a number of materials will be distributed to the different
stakeholders or participant of different events of the project. The project will maintain
communication with all the relevant stakeholders time to time or as per the necessity
of the project. Strong communication will be held with the government officials,
elected bodies of different institutions, government & non-government service

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

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5. Implementation strategy

SHG-led approach: The group led approach is a process which is implemented by a

group and involves group members in a decision making process. The group will be
facilitated by the project staff. The project will initiate group-led saving mobilization and
financing and address other relevant socioeconomic issues through groups. IRB will try
to develop a unique model of SHG microfinance.

Internal control: IRB’s MF project has comprehensive system of monitoring at the field
level to ensure high quality and transparent services and also maintain Islamic Shari’ah
Principles in every step of operations. Branch management will visit each group at least
once during the loan cycle and generally more often to confirm repayment data and
monitor group member’s businesses. Each of the SHG will have internal checking
mechanism to crosscheck their financial transaction and banking. Centre level MIS
software will use to organize financial operation of all SHG level.

Operational structure: IRB’s Livelihood Program will have the overall responsibility to
operate this microfinance program following IR rules, procedures and policies. Under
the supervision of project steering committee, IRB’s Microfinance Expert will be the
responsible person for operating the MF program and will provide technical, strategic,
administration and other management guidance to run the project smoothly at the field
level and liaise with respective stakeholders.

Capacity Building: Capacity building is the key strategy for implementation of the project.
The project will enhance capacity of poor women in respect to economic, social, and
rights issues through training, orientation, meeting (group sharing), and mentoring.

Community Participation: Community participation is an essential approach which

creates a transparent and enabling environment for implementing of project
interventions. It also helps to be accountable of implementing organization towards the
targeted peoples. Apart from, community participation will be ensured in the process of
target group selection, group formation, livelihood support, and financial transaction so
that community people can monitor the project activity at the field level.

Advocacy and Networking: It will be an important method and the project will gradually
develop an advocacy strategy with relevant stakeholders and build networks with local
administrations and authority. The targeted households will link with local authorities and
civil society to receive services and improve access to rights and entitlements.

Awareness: Community awareness is an integral part of the implementation strategy.

Initially, project will conduct regular awareness session with group members. SHG
members will be aware on health, food and nutrition, WatSan, child rights, gender,
rights, family planning through conducting group meeting & information sharing meeting.

Exit/sustainability strategy: The project is expected to bring about positive changes in

socioeconomic conditions of 90% of 4500 poor households in Rangpur district by
improving the livelihood conditions of the rural poor people through group fund financed

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

6. Project Management
A project steering committee will be formed including CD, HOP, LGI, community
representative, PDMER, finance rep. Program Manager, and Project manager. The
committee will meet quarterly basis. The committee will be authority to provide
directions for implementing the project in right track. The project would be executed by
and under the technical and administrative supervision of IR Livelihood Program
following IR rules and procedures. In field level, one Community Organizer will cover the
total 300-350 group members under the close supervision of Project Officer. The IRB
Microfinance Expert will provide technical, strategic, administration and other
management guidance to run the project smoothly at the field level and liaise with all the
international and national departments and/or donors concerned. Project Officer will
conduct regular supervision and monitoring of the project. Project Officer as well as
Program Manager/Microfinance Expert will produce project narrative and detailed
reports in half-yearly and annually.

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7. Gantt chart

Timeline
Activity Target
Y-1 Y-2
Community consultation, need assessment, project 75 groups ●
participants identification (for new SHG)
Formation and strengthening SHG (75 new SHGs) 225 groups ● ●
Awareness building of SHG 225 groups ● ● ● ● ● ●
Capacity building of SHG members/leaders 225 persons ● ● ● ●
Institutionalization of SHG 225 groups
Conduct livelihood assessment 1500 persons ●
Develop household level business plan 1500 persons ●
Conduct skill training based on TNA 1500 persons ● ● ● ●
Livelihood assets support on revolving basis for SHG 1500 persons ● ● ●
members
SHG-led micro-financing 4500 persons ● ● ● ● ● ●
Conduct regular monitoring and follow-up 4500 persons ● ● ● ● ● ●
Organize training on Islamic microfinance for 2 batches ● ●
staff/practitioners (IRB and outside)
Organize seminar on Islamic microfinance (regional 2 seminar ● ●
and national level)
Update Islamic Relief Bangladesh’s Islamic 1 ●
microfinance manual
National level policy dialogue and advocacy on 1 event ●
Islamic microfinance issue
Conduct Shariah Audit 1 audit ●
Develop MIS software 1 ●
Pilot for creating online lending platform on 1 ● ● ● ● ●
microfinance
IEC materials development and publication Need base ● ●
Lesson learning documentation Yearly ● ●
Conduct research and publish working paper on 2 ● ●
Islamic microfinance issue
Staff recruitment and capacity building 20 ●
Office set-up 1 ●
Conduct baseline survey 1 ● ●
Develop M&E plan 1 ● ●
Conduct midterm review and final evaluation 2 ● ●
Coordination, communication and visibility ● ● ● ● ● ●

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8. Risk and assumption

A rapid appraisal and analysis by the technical team (headed by IRB Microfinance
Expert) identified the following distinguishing features as characterizing the rural areas
of in Rangpur district. The features may pose risks and challenges for the project
intervention.

They constitute: poverty of the project participants, seasonal migration, assets loss and
natural disaster. These often result in repayment default, limited opportunities for risk
diversification which may hinder to achieve project objectives. Project management will
take measures to mitigate potential risks of the project. Project will select 100% women
as project participants to avoid seasonal migration as male bread winning members of
families migrated to big cities in quest of job during lean season/ Monga (seasonal food
crisis) period of the year. Technical support service will provide to the enterprises of
members. Project management will seek local technical persons for the best services to
produce high yield of the enterprises so that beneficiaries get maximum profit from their
investment.

Local government representatives and local political leaders can interfere in

households/project participants selection process. The project will follow a solid
methodology from the beginning to ending of the whole selection process based on pre
set transparent selection criteria and participatory process. The project management will
maintain regular communication with relevant local stakeholders and involve them in the
whole selection process. Ensure appropriate verification from various levels before
finalization of the households list.

Political unrest like strike, hartal etc may limit staff movement and interrupt timely
implementation of project activities. In that case project people will work in weekend and
do extra work during normal day to ensure smooth and timely accomplishment of project
activities.

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9. Sustainability

The project support will create impact significantly upon the target households, groups
and communities level. Capacity of target project participants will improve through
providing skill training and intensive hands-on support, which increase productivity of
asset. The project is designed to impact on household’s income and livelihood.
Improving social coherence and social inclusion of target project participants through
involving with project interventions will reduce socio-economic inequality and injustice.
An increase in access to services of the project participants through creating linkages
and networks with private and public services providers. The target group, especially
women and socially marginalized people will be empowered through building capacity
and awareness. Social acceptance and dignity of the project participants will also
improve by ensuring community participation and enhancing leadership capacity.

Economic and Financial sustainability: The project will seek to facilitate financial
sustainability through 3 different aspects. The project will initiate a community-led
savings mobilization process just after formation of the SHGs. The project is expecting
to raise the group savings amount to a considerable amount so that after ending of the
project, individual household can easily access essential financial support to scale up
IGA and coping and managing shocks and disaster. Each of the asset recipient
household will have to repay their asset cost as per repayment schedule. The repay
amount will be deposited in the SHG account and will be utilize capital fund of self-help
financing in future. The capital will support them to scale up their IGA. Increase
households income and productive asset: The project is expecting to increase selected
households skill, income and productive asset base in a considerable level which
sustainably ensured households livelihood and income security after end of project
period through scale up and reproduction.

Financial sustainability of the project is sought through building the capacity of the SHGs
to manage the project financially in an independent and cost-effective manner. Given
the revolving nature of MF funds, ensuring high repayment rates through reducing moral
hazard by using social collateral will be an integral part of this project’s financial
sustainability strategy. The mark-up will be utilized to finance the fund management of
re-lending the recoveries of previous loan cycles.

Institutional sustainability: The project will facilitate formation and capacity building of
Self Help Groups. The project will provide various capacity building support including
training, orientation and hands-on support to build their capacity and organization
sustainability through assisting to mobilize local resources, fund and account
management and documentation. In addition, the project will initiate SHG to link with all
local relevant stakeholders. NGO, MFI and LGI services and other facilities important for
selected peoples and groups. The project will facilitate to establish formal informal
relationship with them, so that after ending of project period SHG can independently
communicate with them to access services. After IRB’s exit from the project SHG will
independently manage groups, and various social activities and awareness endeavors.
The project will ensure that after end of project period SHG will act as an influencing
body at local level on behalf of the poor and marginal people.

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10. Logical framework matrix

Narrative Summary OVI MOV Assumption

Overall Objective
To contribute towards Potential livelihood options - Baseline survey - No unfavorable
achieving MDG1 (reduction of created for 90% project - Evaluation report natural calamity occurs.
poverty and hunger) through participants by end of project. - Stable political/social
improving livelihoods of the environment
rural poor people in North-
West part of Bangladesh.
Specific Objective
To sustainably increase Income of 80% targeted - Baseline survey - Overall country
incomes of 4500 poor beneficiaries increased by - Evaluation report, economy is stable.
households in Rangpur district 30% by the end of project. - Project monitoring - Productive means are
of Bangladesh through self- report available in local
help group approach to small market.
scale enterprise financing
using Islamic finance
principles and strengthen
Islamic Relief Bangladesh’s
capacity for enterprise
financing programmes.
Expected Results
- Formation and - 90% self-help groups are - Productive asset - No disaster
strengthened functions of well functional. transfer record - No social restriction
225 self-help groups to - 100% selected households - IGA profitability - Effective participation
develop a model of access to livelihood means analysis report of community peoples.
enterprise financing based 90% of them successfully run - IGA management
on Islamic finance
principles and on a IGA through livelihood means skill analysis
revolving fund basis. - 100% selected households - Households
- Enhanced potential adopted locally available and income
livelihood options of feasible livelihood option. expenditure
targeted households for - At least 90% trained group analysis report.
increasing income and members increase - Number of
assets. knowledge and skill on women engaged in
- Developed, documented managing IGA. IGA.
and disseminated lesson - 100% selected women
learning to strengthen
engage in household base
Islamic Relief,
Bangladesh’s small scale economic activities.
enterprise financing - Self-help Islamic
initiatives and influence microfinance issue focused in
policies related to Islamic national level.
micro-finance.

Major Activities: Inputs

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

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 Narrative Summary OVI MOV Assumption
- Institutionalization of SHG.
Key activities for achieving result 2:
- Conduct livelihood assessment to identify locally available
and feasible farm, nonfarm IGAs.
- Develop household level business plan.
- Conduct skill transfer training based on TNA.
- Livelihood assets support on revolving basis for SHG
members.
- SHG-led Islamic micro-financing.
- Conduct regular monitoring and follow-up.
Key activities for achieving result 3:
- Organize training on Islamic microfinance for
staff/practitioners (IRB and outside)
- Organize seminar on Islamic microfinance (regional and
national level).
- Update Islamic Relief Bangladesh’s microfinance manual.
- National level policy dialogue and advocacy on Islamic
microfinance issue.
- Conduct Shariah Audit.
- Develop MIS software.
- Pilot for creating online lending platform on microfinance.
- IEC materials development and publication.
- Lesson learning documentation.
- Conduct research work and publish working paper on
Islamic micro-finance.
General activities:
- Staff recruitment and capacity building.
- Office set-up
- Conduct baseline survey.
- Conduct midterm review and final evaluation.
- Coordination, communication and visibility activities.

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11. Budget of the project

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

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

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