As of June 2024, ARS-Bangladesh’s microfinance program demonstrates remarkable financial health and robust operational success, underpinned by impressive loan disbursements and high recovery rates. With over 1,748.47 crore Taka in cumulative loan disbursement and 1,525.89 crore Taka in loan recovery, the organization showcases a well-oiled credit mechanism that is both accessible and reliable. Serving a membership base of 33,704, including 31,956 active borrowers, ARS-Bangladesh extends financial inclusion across rural Bangladesh through its extensive network of 84 branches.
Financial Health and Sustainability: ARS-Bangladesh maintains a 98.65% loan recovery rate, a testament to its strong credit management and repayment discipline among borrowers. The outstanding loan balance, totaling 222.57 crore Taka, reflects a thriving portfolio and sustained demand for loans. Additional indicators of financial stability include the organization’s 11.10 crore Taka in fixed assets and 22.76 crore Taka in Fixed Deposit Receipts (FDR), underscoring its investment in physical and financial reserves.
Savings deposits from members amount to 68.33 crore Taka, indicating strong community trust and providing ARS-Bangladesh with stable internal funding. Additionally, a cumulative surplus fund of 52.36 crore Taka has enabled the organization to reinvest for growth and manage risks. With diversified funding sources totaling 58.18 crore Taka from organization funds, 114.85 crore Taka in bank loans, and other contributions from member funds, ARS-Bangladesh ensures financial sustainability and resilience.
Income Growth and Loan Disbursement: In 2023-24, ARS-Bangladesh experienced a robust 19.75% increase in income, reaching 542.28 lakh Taka, along with a 24.68% growth in net profit, totaling 154.57 lakh Taka. Loan disbursements also rose significantly, with an impressive 24.04% increase from the previous year, totaling 17,484.72 lakh Taka. The 27.3% boost in cumulative loan recovery reflects the organization’s efficient collection methods and financial discipline. Despite a modest 7.15% increase in outstanding loans, this growth signifies strong demand for ARS-Bangladesh’s financial services.
However, there has been a slight decline in total beneficiaries, down from 38,279 in 2022-23 to 33,704 in 2023-24. This drop, mirrored in active borrower numbers, reflects challenges that ARS-Bangladesh may need to address by enhancing community outreach and engaging in client retention.
Specialized Microfinance Programs: ARS-Bangladesh operates various specialized schemes under its microfinance umbrella, each tailored to meet specific community needs and promote economic empowerment:
- Poverty Alleviation Credit Program: This program targets poverty reduction in rural areas through small loans, helping beneficiaries establish ventures in agriculture, handicrafts, and retail. Active in the Khulna Division, this initiative has benefited 11,513 participants, supporting ventures in poultry farming, vegetable cultivation, and crop production.
- Agriculture Sector Microcredit (ASM) Program: This loan program assists 17,221 farmers by offering six-month loans for crops like paddy, vegetables, and jute, with a single installment repayment plan. ASM’s support extends to livestock rearing and agricultural equipment, fostering confidence and growth in the farming sector.
- Spice, Maize, and Oil Seed (SMO) Program: With a focus on producing essential crops such as turmeric, onion, and maize, this program aids 13,107 beneficiaries. The low service charge of 4% encourages farmers to diversify into these profitable crops, reducing reliance on imports and fostering sustainable agriculture.
- Micro Enterprise Loan (MEL) Program: Aimed at budding entrepreneurs, the MEL program funds small businesses like grocery shops, fish hatcheries, and dispensaries. Benefiting 13,610 individuals, this program encourages self-employment and bolsters local economies.
ARS-Bangladesh’s strategic focus on poverty alleviation, agricultural development, and micro-enterprise growth not only stimulates economic progress but also strengthens resilience among rural populations. As ARS-Bangladesh moves forward, re-engaging with beneficiary communities will be crucial in sustaining its holistic impact across Bangladesh.