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Beneath the Surface

NGOs in Bangladesh: Myth, rhetoric, and reality

Have NGOs helped improve the economic conditions of the borrowers? We shall attempt to examine the aforesaid three stances: myth, rhetoric and the reality. For the sake of a comparison, we can take two periods: the last 20 years as a long-term trend and particularly, the last one year that is believed to be a bane for poor household grappling with economic crisis.

Abdul Bayes
AN avalanche of reports relating to the performances of NGO activities in Bangladesh is now available. Three contrasting views are in circulation: the "myth" that NGOs invariably improve economic conditions of the poor; the "rhetoric" that NGOs are like traditional mohajans who mount misery of the poor, and the "reality" that the actual situation lies between the two extreme cases. We can verify the abovementioned stances on the basis of empirical evidence.
It should be mentioned here that most of the evaluations appear to be flawed on theoretical juxtaposition. The reason for
saying so is that one must consider the same groups of borrowers at different points of time to draw an inter-temporal picture. The recently completed repeated sample survey of households in 62 villages, funded by the Research' and Evaluation Division (RED) of Brae, seems to have overcome the pitfall. Allow me to draw upon that survey output and provide the readers with some tentative insights -- and adducible to my judgment -- on the performances of NGOs in rural areas.
NGOs claim that they target the poor and, preferably, the functionally landless households (owning up to 0.20ha). They do it, but not for the totally poor. Survey results show that about half of the house-
holds (approximately 47%) from this group are still outside the NGO net. We can only hope that the coverage gets wider over time. Among the already reached 53% of the poor, the shares of each NGOs are as follows: Grameen 12%, Asa 10%, Brae 9%, "other NGOs" (PKSF, RDRS,etc)10%.
Due to various problems, 12% of die borrowers had already backed out from the NGO credit market. This 12% is possibly the main plank of the adverse perceptions of the critics who say that NGOs do no good to the poor. There is another viewpoint of the critics, which is that the economic condition of the poor deteriorated because of access to NGO credit --a point that we shall pursue later.
However, the dropped-out households could also be the target for harassments by NGOs, as often alleged in newspapers. But note that we notice no flaws in NGO targeting since 93% of the households covered so far belong to the functionally landless, plus marginal, groups.
Assuming that 46% of all households (including some non-poor households) have access to NGO services, the current coverage is estimated to be 11.5 million. But, we are told by the NGO operators that the coverage is a staggering 24 million distributed as follows: Grameen 7 million, Asa and Brae 6 million each, and "other NGOs" 5 million. That means almost all
rural households are members of NGOs. This possibly points to the state of overlapping in NGO loans, which is deemed to be the number one problem now.
We reckon that the same households had been taking loans from different NGOs, or else the same NGO has been giving loans to different members of the same household. This seems to be a sordid scenario of mismanagement, telling upon recovery capacity and efficiency of NGOs in Bangladesh. This also means that "credit discipline" that NGOs once boasted of is now on the back-burner. And the implication is that unless streamlined, the on-going credit indiscipline might cast a cloud on the horizon of sustainable survival of the credit programmes.
Have NGOs helped improve the economic conditions of the borrowers? We shall attempt to examine the aforesaid three stances: myth, rhetoric and die reality. For the sake of a comparison, we can take two periods: the last 20 years as a long term trend and particularly, die last one year that is
believed to be a bane for poor household grappling with economic crisis. And, in doing so, we have valued the opinions of the borrowers about their own conditions rather than imposing our (meaning economists) own deductions from the drawing
rooms.
We observe that during the last 20 years, the member-households reported a net positive change in their economic conditions. For example, about 54% mentioned that their economic conditions improved during the decades as a result of access to NGO services, and 19% reported a deterioration during the same period of time. This implies a net positive change of about 35%. But the net positive change was the highest (40%) for "other NGOs," followed by 39% for Brae, about 35% for Asa and 28% for GB.
It could be that NGOs with "credit plus" approach arc performing better than NGOs with "credit only" approach as far as economic uplift of the client is concerned. By and large, the overall performance seems to be on the positive side as perceived by the
borrowers themselves. This is good news for the proponents of the NGO programs. On the other hand, the critics could show that roughly one-fifth of the borrowers could not overcome the economic barricades despite inflow of NGO credit into their households and, thus, conclude that NGOs are of very little use to the poor.
Anyway, the pendulum of economic condition seems to have sharply swung during the last one year or so. For example, all of the borrowers across NGOs reported a net deterioration in economic conditions over the last one year --a year when prices of essentials shot very high and natural calamities crippled income earning opportunities. We can distribute the fall-out as follows: "Other NGOs" (-) 7.8%. Brae (-) 21%, Grameen (-) 29% and Asa (-)22%. For example, 21% of the borrowers from "other NGOs" reported an improvement in economic condition last year while 29% reported a deterioration, thus posting a negative 7.8%.
It thus appears that during the last one year of economic crisis, all
NGO members faced severe economic hardships, but the magnitude of that was less for NGOs with credit plus approach than that of the NGOs with credit alone approach. It also appears that NGO credit could hardly shelter the poor households from the "shocks" arising from internal and external factors.
What, then, wins the debate -the myth, the rhetoric or the reality? The long-term impacts on economic conditions tend to show that the "myth" bears some meaning; in the very short-run and in the wake of "shocks." the "rhetoric" seems to rule, and. on average, the "reality" wins, providing us with rays of hope. By and large, there seems to be strong case that NGOs with credit plus approach should be extended to the poor not yet covered. There is also a strong case that NGOs should regain their earlier credit discipline for a sustainable delivery of services to the rural poor.
AMW Bayes a a Professor of Ewwncs at J • hangltn agar University (AMulbayes@yahoocom)