Project in trouble for poor loan recovery rate

The rate of loan recovery from the revolving fund of "One House, One Farm" project looks to be low as it notched 44.78 percent on average delaying the process in providing loan to others.

This was revealed in a monitoring report on the project conducted by the Implementation, Monitoring and Evaluation Division of the Ministry of Planning.

Some 40,333 village-development Samities (cooperatives) have already been formed under the project and the families brought under the Samities take loan from the revolving fund and utilise that in various income generating activities.

The report shows that the project beneficiaries are not repaying the loan taken from this revolving fund in time.

The officials familiar with the process of preparing the report said it was formulated after taking information from 32 village development samities from 32 unions under 16 districts in eight divisions.

The districts covered by the report are Barisal, Bhola, Feni, Cox's Bazar, Faridpur, Rajbari, Khulna, Bagerhat, Sherpur, Netrakona, Bogra, Naogaon, Rangpur, Nilphamari, Sylhet and Moulvibazar.

Analysing the report findings, it was found that the lowest loan recovery rate was seen in Bogra with 6.98 percent followed by 32 percent in Bhola, 33 percent in Bagerhat, 38.73 percent in Naogaon, 38 percent in Nilphamari, 39.84 percent in Sherpur, and 43 percent in Moulvibazar. The highest loan utilisation rate of 68.7 percent was seen in Feni.

The report shows that most of the project beneficiaries could not deposit the minimum Tk 200 as their monthly savings while in many cases it was found that some of the selected households were solvent and so-called wealthy ones thanks to the influence of the local elite.

The project beneficiaries could make more than Tk 21,000 as savings for capital formation or for own savings of the household in Khulna Division comparatively witnessing the highest savings trend while Sylhet Division witnessing the lowest savings trend.

At field-level focus group discussions and team discussions, the beneficiaries informed that in some cases they faced difficulties in getting the loan as they do not get in time and it is insufficient.

Besides, it was found that the members of the samities often need to go to the upazila offices for at least two to three times which is also time consuming and involves more cost. Besides, it was also noticed that if anyone applies for loan going beyond the groups, the interested loan seeker does not get the desired loan.

In October last year, the Executive Committee of the National Economic Council (Ecnec) approved the 3rd revision of the "One House One Farm" project raising its cost by Tk 6,813.27 crore, aiming to reduce the country's poverty rate to 10 percent by 2020.

The Rural Development and Cooperatives Division under the Ministry of LGRD is implementing the 3rd Revision of the "One House, One Farm" project with an estimated cost of Tk 8,010.27 crore.

The project is being implemented at 40,950 wards under 4,550 unions in 490 upazilas of the country's 64 districts.

The project mainly aims to help reduce poverty rate to 10 percent from the existing 22.8 percent through turning every household under the project areas to a sustainable agro-based income generating unit.

On July 30, 2013, Ecnec approved the 2nd revision of the “Ektee Bari, Ektee Khamar” (One House, One Farm) project involving Tk 3,163 crore to cover its activities at every village of the country.

The original project received the Ecnec's approval in November 2009 with an estimated cost of Tk 1,197 crore and with duration from July 2009 to June 2014.

Later, the project was revised (1st revision) by slashing its duration by one year and by re-fixing its cost at Tk 1,493 crore. The first revised project covers a total of 1,932 unions of the country while under the 2nd revision the project covers all the unions.

Under the project, the beneficiaries are being given skill development training, loan, grant and technical assistance after forming village development organisations for poor people based on a primary survey.