Pursuit - The Journal of Undergraduate Research

at The University of Tennessee

Volume 8 Issue 1 Article 15

January 2017

Non-Governmental Organizations' Involvement in Poverty

Alleviation in Bangladesh
Taylor N. Scheffing
University of Florida, tnscheffing@ufl.edu

Follow this and additional works at: https://trace.tennessee.edu/pursuit

Part of the Comparative Politics Commons, International Relations Commons, Models and Methods
Commons, and the Other Political Science Commons

Recommended Citation
Scheffing, Taylor N. (2017) "Non-Governmental Organizations' Involvement in Poverty Alleviation in
Bangladesh," Pursuit - The Journal of Undergraduate Research at The University of Tennessee: Vol. 8 : Iss.
1 , Article 15.

Available at: https://trace.tennessee.edu/pursuit/vol8/iss1/15

This article is brought to you freely and openly by Volunteer, Open-access, Library-hosted Journals (VOL Journals),
published in partnership with The University of Tennessee (UT) University Libraries. This article has been accepted
for inclusion in Pursuit - The Journal of Undergraduate Research at The University of Tennessee by an authorized
editor. For more information, please visit https://trace.tennessee.edu/pursuit.
Pursuit: The Journal of Undergraduate
Research at the University of Tennessee
Volume 8, Issue 1 (2017) PURSUIT
Non-Governmental Organizations' Involvement in Poverty
Alleviation in Bangladesh

TAYLOR N. SCHEFFING
University of Florida
tnscheffing@ufl.edu

This work is licensed under the Creative Commons Attribution 4.0 International License.
To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/.
Copyright is held by the author(s).

Labeled as one of the poorest countries in the world, Bangladesh is accustomed to poverty.
Beginning in the late 1970s and even more since the arrival of the millennium, Bangladesh had
made significant strides towards economic development through poverty alleviation efforts
brought on by the World Bank initiatives. However, widespread discontent with the World
Bank has led to increased, dominant presence and involvement from non-governmental or-
ganizations. Non-governmental organizations typically share a public mission, where those in
Bangladesh aim to work exclusively with those in disadvantaged, rural areas. This paper will
be addressing the growing question: what are non-governmental organizations (NGOs) doing
to alleviate Bangladesh’s level of poverty?

PURSUIT 151 Volume 8, Issue 1

 Poverty is a state insufficiency, where individuals struggle to acquire basic needs. Seasonality,
climate, economic crises, and household shocks are common factors that influence poverty (Gau-
tam, 2016, 4). Known for its dense population, Bangladesh faces consistent struggle in keeping up
with the demands of a continuously rising number of inhabitants. With an increasing population
in Bangladesh, NGOs continue to implement microcredit programs, cooperative forming, and a di-
rect involvement of beneficiaries to catalyze sustainable growth and socio-economic development.
Analyzing the history of poverty in Bangladesh is crucial in alleviating such poverty.
As rapid modernization, industrialization, and urbanization flowed throughout the world to-
ward the end of the twentieth century; rural projects for development fell short of those for urban
areas. Bangladesh fell victim to the global capital net, most notably named as the World Bank-IMF
trap (worldbank.org). Structural Adjustment Programs became more widespread, making every-
thing within reach of private businesses and open for profit and corporate interest. These pro-
grams were intended to allow for reduced trade barriers and a more market-oriented economy.
While seemingly efficient, these programs facilitated the opposite effect for Bangladesh. For ex-
ample, one third of Bangladesh citizens live below the poverty line and thirty-six percent of all
Bangladesh citizens live in rural areas. Programs like Structural Adjustment Programs were not bal-
anced with the country’s economic state, bringing forth dissatisfaction and irrational impact (World
Bank 2016). Critics of Structural Adjustment Programs often point to “the removal of subsidies on
food staples, the widespread retrenchment of workers, the high cost of social services and goods
and the low wages of workers” (Tsikata, 1995). These factors solidified demise of Bangladesh’s eco-
nomic system. Factories and public enterprises became dismantled and export-oriented. Eventu-
ally, temporary, outsourced work lead to job scarcity.
Non-governmental organizations began to emerge worldwide with a focus on advocacy and
consciousness, making Bangladesh a prime candidate to test their efforts. Compared to World
Bank regimes, the incorporation of NGOs enjoyed a much more favorable consensus. (Muham-
mad, 2015, 38) The NGO model of development offered accommodation and convenience for the
clear majority of poor or underprivileged inhabitants, providing resources and devout attention to
social issues. The model’s initial goal stemmed from an attention to inequality amongst the poor
and disadvantaged, but NGO efforts quickly shifted to a concentration on microcredit programs.
Microcredit is the allowance of minute loans to underprivileged borrowers who typically lack reli-
able employment, credit history, and even supplemental collateral. Such programs are instilled to
alleviate poverty and promote entrepreneurship. By building on the strengths of the poor and en-
hancing health, financial security, and income, microcredit programs serve as a new lifeline for poor
and developing countries (Islam, 2014, 10).
Since the 1983 formation of the Grameen Bank- the first modern microcredit institution- in
Bangladesh, microcredit programs expanded rapidly throughout the country. Muhammad Yunus,
pioneer of the Grameen Bank, deemed conventional banking to be unfit for poor and developing
countries such as Bangladesh, calling for a solution that would deliver minimal loans at low-interest
rates to the rural poor as an effective tool for starting more small businesses. The Grameen Bank
began as a proponent of social welfare without collateral, mainly advocating on behalf of women as
they were and continue to be socialized as inferior and male dependent in Bangladesh (Rouf, 2016,
6).
The Grameen Bank was quickly followed by NGO replication, marking the beginning of
major programs such as Bangladesh Rural Advancement Committee (BRAC), Association for
Social Advancement (ASA), PROSHIKA, and Palli Daridro Bimochon Foundation (PDBF). (Ahmed,
2014, 2477) After its early establishment as a movement to rehabilitate refugees returning to
Bangladesh from India, BRAC now stands as the world’s largest development organization. Mi-
crocredit programs have become the sole focus amongst BRAC and ASA, extending small loans
to the very poor people for “self-employment projects that generate income, allowing them to
care for themselves and their families” (BRAC.net). These NGOs have consciously acknowl-
edged Bangladesh’s poverty-stricken population be their targeted beneficiaries, with poor women
considered to be of utmost importance (Hoque, 2004, 23).
Although BRAC currently operates microfinance programs in seven countries, Bangladesh

PURSUIT 152 Volume 8, Issue 1

serves to be its largest source of loans and sustainable poverty reduction. BRAC divided itself off
into a separate, client-focused branched named as the Rural Development Project (RDP), with a
four-fold objective to “generate employment opportunity for both males and females, to mobilize
under- and-un-utilized resources, to assist in diffusing appropriate technology in the rural areas,
and to promote better health care” (Bigman, 2000, 294). BRAC provides 2 types of loans to the
impoverished: the dabi, which is given solely to women and range from $50-700 USD and the pro-
goti, which is given to either men or women who have failed to obtain prior loans. The dabi focuses
more on operational loans for the furthering of industries such as poultry, livestock, handicrafts,
rural trade, and fruit and livestock cultivation. The latter, progoti, aims to expand existing small
businesses and enterprises (Abdullah, 2013, 340). The targeting criterion for BRAC remains at
households who have less that one half of an acre of land and whose occupations consist solely
of manual labor. It has been estimated that 15-30% of BRAC members are from “non-target”
households prone to fleeting bouts of poverty while the larger portion of BRAC members are of
extremely poor households (Zaman, 1999, 3).
The Association for Social Advancements (ASA) also stands as one of the largest, indigenous
NGOs of Bangladesh. With advancements, like those of BRAC, ASA serves to educate and em-
power the poor by integrating social incentive into their microcredit programs. They center their
efforts on the newest generation; the principal objective being to extend credit facilities in order in-
crease income levels and purchasing power of households. ASA aims to achieve structural poverty
alleviation by incorporating women and young adults into their margin of credit. Their individualis-
tic approach is divided into three different credit programs: The Micro Credit and Saving (voluntary
along with weekly) Program, The Small Credit Program for Women, and The Small Business Loan
Program. Each of these programs conduct Income Generating Activities (IGAs), where each loan
must be repaid within one to two years. Few and minimal interest fees are applied (Zaman, 1999,
4).
Scholars still debate the level of influence NGO microcredit programs have in Bangladesh.
While some may argue that NGO microcredit programs are substantial, others claim they have
less significance. However, the latest 2013 impact assessments, which are conducted every three
to four years, from the highly recognizable NGOs BRAC and ASA appear with survey results
concluding just the opposite. The assessments aimed to best reflect countrywide impact by ran-
dom sampling 7,168 total microcredit borrowers from 28 out of the 64 districts in Bangladesh.
97% out of the total reported increased business capital and increased monthly income following
microcredit loans. 94% of respondents stated that they have been able to create employment
opportunities for others, 97% reported improved quality of food intake for themselves and their
families, and 83% reported better-quality housing and dwelling conditions subsequent to micro-
credit loans. The success of BRAC and ASA is evident, with each dispersing over 1 billion USD in
annual expenditures, including 175 million USD dedicated to microcredit programs. Currently,
5.3 million people of Bangladesh derive benefit from BRAC microfinance operations and 7 million
people from ASA microfinance operations, where more than half of the borrowers are women.
Since 2001, the growing labor force participation rate has opened vast employment opportunities.
The role of women in the work force has also changed drastically since the installment of mi-
crocredit programs that are directed towards the empowerment of women and equal opportunity
for poor. Cultural male dominance in the work force has always been inevitable and unavoidable
in Bangladesh, but women-targeted microfinance programs have bridged the gap considerably,
leading to a reduction in female vulnerability in such a patriarchal society. “Empowerment of ru-
ral women and their participation in the development process has brought in a long-term positive
effect, which is a direct contribution by the NGOs in Bangladesh” (Begum, 2004, 20).
Eradication of poverty in Bangladesh is slowly becoming a reality as microcredit programs be-
come increasingly more popularized amongst the disadvantaged, poor population. The Grameen
Bank and NGOs like BRAC and ASA were founded on principles of generalized trust and public
good deed, where a trust in poor people’s ability to repay others has kept the industry afloat and
thriving. Microfinance initiatives promote self-respect and dignity, which encourage hard work
through individual efforts (Al Mamun, 2013, 107). Rural households, workforce security, and even

PURSUIT 153 Volume 8, Issue 1

healthcare have improved greatly from the microcredit delivery and its commitment to social de-
velopment, economic improvement, and trust in Bangladeshi people (Ahmed, 2014, 2494).
Other non-governmental organizations, like co-operatives, are conducive to economic devel-
opment and the alleviation of poverty in Bangladesh. Co-operatives are an independent entity of
people who are united voluntarily to further a common, economic interest. They are traditionally
based on the values of “self-help, self-responsibility, democracy and equality, and equity and soli-
darity” (Islam, 2014, 2). The presence of co-operatives dates back to the late 1770’s, having been
established by farmers and agricultural field owners in order to foster both psychological and eco-
nomic growth amongst their workers.
Agriculture co-operatives remain as the most prominent in Bangladeshi societies, where
self-governance drives their methodologies and theories. The agricultural industry operates as
the largest job-creation sector in rural Bangladesh, where poverty and malnutrition are rampant.
Based off a collective goal to eradicate significant levels of poverty and minimize widespread
hunger, agriculture co-operatives facilitate open access to production resources and open wider
markets for trade and product movement. By ensuring “justice, good governance, accountability,
gender equality, and participation in social enterprise,” co-operatives -both agriculture and social
issue-oriented- serve to expedite decision-making processes, and allow for greater negotiating
powers and broader land ownership divided among the constituents (BCA.gov.bd). Although con-
sumer co-operatives are present in Bangladesh, it is producer -mainly agricultural- co-operatives
that dominate and contribute greatly to poverty alleviation.
Seasonality plays a large role in the agricultural co-operative sector. Levels of famine are sub-
ject to foreseeable rises with each coming year, as climate and presence of natural disasters are
ever-changing in Bangladesh. Seasonal food deprivation, called Monga amongst the Bangladeshi
population, poses a threat as income and food consumption are diminished during these times. The
three crop seasons –Aus, Aman, and Boro- are named after three types of their most valuable and
dependable export-crop, which is rice. Aman faces drastic low crop yields, resulting in pronounced
economic inactivity (Khandker, 2012, 2). These challenges are a result of nature and are virtu-
ally uncontrollable, so agriculture co-operatives help to facilitate year-round food and job security.
Group-action and collective effort from agriculture and small-farmer co-operatives provide relief
when sustaining a suffering population by reducing the separation between people’s needs and
their incomes. By definition, co-operatives are adaptive, where they seek to develop innovative,
pro-active, and morally permissible solutions to the issues facing their county. Bangladeshi co-
operatives’ dedication to social responsibility and collective sustainable development has helped
to reduce poverty levels and cultivate positive growth.
The direct involvement of beneficiaries in both co-operatives and microcredit financing allows
Bangladesh inhabitants to serve as a central factor in the national plan for development. The rural
poverty-stricken populace thrives from an NGO bred idea that focus should be maintained in areas
that increase human capability and capacity, and allow for a “well-distributed, stable corresponding
living standard” (Begum, 2004, 16). NGOs base their ideologies on ways to identify and combat the
causes of poverty, rather than changing the attributes and focusing solely on misfortune. By devel-
oping institutions and furthering the abilities of the beneficiaries, NGOs focus on developing inter-
nal agencies and initiatives to bring positive change and socio-economic development. Nutrition
and food sources, sanitation, and health issues serve as the most pertinent factors when assessing
poverty in Bangladesh, and the willingness of the population to aid in relief efforts. The prolifera-
tion of NGO branches has gained momentum and popularity due to their attention to such issues,
but also their regard for accountability. NGOs encourage accountability, where the interests and
concerns of the beneficiaries are to be addressed in a manner that confronts the problem and of-
fers a progressive solution. By relying heavily on direct community interactions, NGOs build off
feedback and communal opinions to ensure positive growth for the people of Bangladesh. Studies
show that 86% of larger NGOs and 81% of smaller NGOs rely on public opinion and feedback to
improve the effectiveness of its campaigns and public awareness programs (Gauri, 2005, 10). Ben-
eficiary feedback is used to delineate the implications of imposed strategies for rural development,
poverty reduction, food security, and nutrition. Investments drive this movement to climb out of

PURSUIT 154 Volume 8, Issue 1

rural poverty, where NGOs continue to implement investments in infrastructure, human capital,
industries/enterprises, and sanitation to trigger growth that is not limited only to the agricultural
industry. The global, pro-poor nature of NGOs, specifically those present in Bangladesh, employ
stimulating tactics to eliminate such an over-bearing presence of poverty and replace it with avail-
able pathways for success and prosperity (Nustad, 2014, 259).
Within the last 10 years, NGOs in Bangladesh made remarkable progress in lifting over sixteen
million people out of poverty and reducing inequality amongst its citizens. As of 2013, the num-
ber of poor people has dropped twenty-six percent. Outspoken NGO and government commit-
ment to Millennium Development Goals are relevant towards amplified economic growth. Direct
development of the agriculture, industry, and service sectors serve as the most beneficial. How-
ever, social sector development policies (women and youth advancement, education, health) di-
rectly and indirectly assist human capital development and socio-economic conditions of the poor.
Easy access financial policies –microcredit programs- for the poor are important for access to re-
sources, self-employment, and raising the standard of living, because they lead to positive impacts
on poverty alleviation (Motiur, 2013, 11-24). Microcredit programs, co-operative forming, and di-
rect involvement of beneficiaries have led to real rural wage growth and noticeable living condition
improvements. This growth has been both formal and informal. The implementation of microcre-
dit programs and collateral-free loans enabled the most distinct drops in poverty, where positive
increases in other sectors of well-being are evident. Bangladeshi government combined with NGO
influence continues to work to formulate policies and strategies to expand productive employment
opportunities and promote labor-intensive growth (Motiur, 2013, 22). While overall improvement
is apparent, poverty continues to be a daunting problem, where poverty in rural areas continues to
be more pervasive and extreme than in urban areas (World Bank 2016). Eradication of poverty and
the disadvantaged population will continue to be Bangladesh’s primary objective for development.

Works Cited

Abdullah, Naziruddin. "The Effectiveness of Micro-Finance Institutions in Alleviating Poverty: The

Case of Bangladesh's Grameen Bank and BRAC." Journal of Social and Development Sciences
4.7 (2013): n. 340. International Foundation for Research & Development. Web. 11 November
2016
Ahmed, Ferdoushi, and Chamhuri Siwar. "Impact of Microcredit Programme on Poverty Allevia-
tion: A Comparative Study in Bangladesh and Malaysia." Advances in Environmental Biology
(2014): 2014, 2477, 2094. Web. 11 November 2016
Al Mamun, Chowdhury Abdullah, Nazmul Hasan, and Arif Rana. "Micro-Credit and Poverty Allevi-
ation: The Case of Bangladesh." World Journal of Social Sciences 3.1 (2013): 102-08. Web. 11
November 2016.
"Bangladesh Cooperative Academy (BCA)." Bangladesh Cooperative Academy. N.p., n.d. Web. 11
Nov. 2016.
Begum, Syeda Feroza, Sawlat Hilmi Zaman, and Mohammad Shahin Khan. "Role of NGOs in Rural
Poverty Eradication: A Bangladesh Observation." BRAC University Journal 1.1 (2004): 13-22.
Web. 11 November 2016.
Bigman, David, and Hippolyte Fofack. Geographical Targeting for Poverty Alleviation: Methodology
and Applications. Washington, D.C.: World Bank, 2000. Print.
"Data Catalog." World Bank Data Catalog. N.p., n.d. Web. 11 Nov. 2016.
Gauri, Varun, and Julia Galef. "NGOs in Bangladesh: Activities, Resources, and Governance." World
Development 33.12 (2005): 10. Web. 11 November 2016.
Gautam, Madhur, and Rashid Faruqee. Dynamics of Rural Growth in Bangladesh: Sustaining
Poverty Reduction. N.p.: World Bank, 2016. Web. 11 November 2016

PURSUIT 155 Volume 8, Issue 1

Hoque, Serajul. "Micro-credit and the Reduction of Poverty in Bangladesh." Journal of Contempo-
rary Asia 34.1 (2004): 21-32. Web. 11 November 2016.
Islam, Jannatul, Mobarak Karim, and Ashraful Begum. "An Overview on Co-Operative Societies
in Bangladesh." European Journal of Business and Management 6.31 (2014): n. 2. Web. 11
November 2016.
Khandker, Shahidur R. "Seasonality of Income and Poverty in Bangladesh." Journal of Development
Economics 97.2 (2012): 2. Web. 11 November 2016.
Motiur Rahman, Pk Md, Noriatsu Matsui, and Yukio Ikemoto. Dynamics of Poverty in Rural
Bangladesh. Vol. 1. Aufl. Dordrecht: Springer, 2013. Web.
Muhammad, Anu. "Bangladesh - a Model of Neoliberalism: The Case of Microfinance and NGOs."
Monthly Review 66.10 (2015): 38. Web. 11 November 2016.
Nustad, Knut G. "Jude L. Fernando, The Political Economy of NGOs: State Formation in Sri Lanka
and Bangladesh." Critique of Anthropology 34.2 (2014): 258-59. Web11 November 2016.
Rouf, Kazi Abdur. "Eradication of Poverty through Community Economic Development Using Mi-
cro Financing: Lessons Learned from Grameen Bank Bangladesh." IJRSM International Journal
of Research Studies in Management 5.2 (2016): n. 6. Web. 11 November 2016.
ShineTheme. "What We Do." BRAC. N.p., n.d. Web. 11 Nov. 2016.
Tsikata, Dzodzi. "Effects of Structural Adjustment on Women and the Poor." Global Policy Forum
(1995). Web. 14 June 2017.
"Video." ASA Bangladesh. N.p., n.d. Web. 11 June 2017.
"World Bank Group - International Development, Poverty, & Sustainability." World Bank. N.p., n.d.
Web. 11 Nov. 2016.
Zaman, Hassan. "Assessing the Impact of Micro-credit on Poverty and Vulnerability in Bangladesh."
Policy Research Working Papers (1999): n. 3-4. Web. 11 November 2016.

PURSUIT 156 Volume 8, Issue 1

PURSUIT 157 Volume 8, Issue 1
PURSUIT 158 Volume 8, Issue 1