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Microfinance for Rickshaw Pullers in Progress

An innovative project funded by the World Bank aims to assist the rickshaw pullers and poor owners to switch to alternate professions so that they can restore income and livelihood affected by ban on non-motorized vehicles in major roads of Dhaka city. A World Bank team recently concluded the second implementation support mission for the Additional Financing: Second Poverty Alleviation Microfinance Project (Microfinance II).

 

The objective of the Additional Financing, in addition to the broad objective of poverty alleviation through microcredit, is to diversify microcredit operations to reach a new underserved segment of the urban poor and to provide them with technical skills for utilizing the microcredit for productive gain to improve their livelihood. A major component of the additional financing is to build institutional capacity of the implementing agency - Palli Karma-Sahayak Foundation (PKSF), the participating Partner Organizations (POs) and the poor borrowers. 

 

Supported by the World Bank with US$ 15 million equivalent interest-free loan, project has taken-off at the field level implementation stage from the first quarter of 2008 after a series of awareness-building workshops, meetings and several rounds of other project preparatory activities. PKSF has been closely supervising progress of the project being implemented through 32 branches of 10 selected POs working in Dhaka city.

 

As a consequence of social and livelihood training received from the project and motivation provided by the project staff, the general level of awareness increased among the rickshaw pullers on the downside of rickshaw pulling and on importance of switching to a new profession. Up to August 2008 about 20 thousand rickshaw puller/poor owner household members had been organized and, having gone through training sessions, about 12 thousand members had received loans. It was found that around 15% of the borrower households completely eliminated their dependence on income from rickshaw pulling; another 30% - 35% engaged themselves in new professions but still are supplementing part of household income from rickshaw pulling.

 

Microcredit project for urban floating people intending to switch to alternative livelihood is new in Bangladesh. Therefore, the partner organizations including PKSF are undergoing learning curve on successful handling of the implementation challenges. While the new challenges are slowing down the pace of project implementation innovative strategies are being devised to expedite the pace. The strategies include expansion of project area, use of all available options for rickshaw pullers’ skill development training, and a potential extension of project closing date.

 

October 2008

Contacts:

Mehrin A. Mahbub (8802) 8159001-28, E-mail: mmahbub@worldbank.org

For more information on the World Bank in Bangladesh, please visit: www.worldbank.org.bd & www.worldbank.org