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RR RUEHCI
DE RUEHKA #6038/01 2691110
ZNR UUUUU ZZH
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FM AMEMBASSY DHAKA
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INFO RUEHLM/AMEMBASSY COLOMBO 7572
RUEHKT/AMEMBASSY KATHMANDU 8694
RUEHIL/AMEMBASSY ISLAMABAD 1283
RUEHNE/AMEMBASSY NEW DELHI 9348
RUEHLO/AMEMBASSY LONDON 1517
RUEHGO/AMEMBASSY RANGOON 2495
RUEHCI/AMCONSUL CALCUTTA

UNCLAS SECTION 01 OF 02 DHAKA 006038 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EAID SOCI XD BG
SUBJECT: FROM MICRO-CREDIT TO ENTREPRENEURSHIP: SUCCESS 
STORIES FROM BANGLADESH 
 
¶1.  SUMMARY:  Citigroup Foundation, the philanthropic arm of 
Citigroup, recently presented its Second Annual 
Micro-Entrepreneurship Awards.  Micro-credit is closely 
associated with Bangladesh, since Bangladesh was one of the 
first countries where the concept was widely employed to meet 
the financial needs of the poorest members of society.  The 
stories of the award winners illustrate not only the 
individual winners' successes, but also how the concept works 
to lift people and entire communities out of poverty.  END 
SUMMARY. 
 
BEST MICROFINANCE INSTITUTION 
----------------------------- 
 
¶2.  Illustrating just how micro-finance works, the Eco-Social 
Development Organization (ESDO) began in the wake of the 1988 
flood and soon branched out into micro-credit.  On a 
day-to-day basis, ESDO helps local groups organize to conduct 
training and collects small amounts from participants for 
savings.  Once the idea of saving is established, small loans 
are made.  Initial loans are usually in the BDT4,000 range 
(approximately US$60), but ESDO has made loans from BDT2,000 
to BDT 200,000 (approximately US$30 to US$3000).  The 
repayment rate for ESDO loans is 99%. 
 
BEST WOMAN MICROENTREPRENEUR 
---------------------------- 
 
¶3.  While many of these groups are oriented to women and the 
majority of the loans are made to women, several of the 
speakers at the event spoke about getting the loan "after 
seeking and obtaining permission from my husband".  While 
this may be difficult for Westerners to hear, it shows that 
successful programs work with the existing culture wherever 
possible.  The winner in this category was one such example. 
When Jahida Begum's husband was unable to find work, she took 
out a BDT 4,000 loan (approximately US $60) to rent a pond 
near her house to raise fish for sale as food.  She was able 
to repay that loan, and take out a second loan for slightly 
more money and buy two goats. When they bred, she repaid and 
took out a third, larger, loan.  This is the typical method - 
repayment, and a subsequent larger loan.  Her most recent 
loan, after ten years, was for BDT 20,000 (over US $300) and 
she has diversified into various livestock, farmlands, and a 
restaurant.  Her husband was very supportive in an interview, 
th 
anking Allah for this opportunity, and working with her in 
their diverse enterprises; but there is no doubt that she is 
the driving force behind their success. 
 
BEST PROGRAM FOR THE HARDCORE POOR 
---------------------------------- 
 
¶4.  Given the level of poverty shown by all the nominees, it 
is sometimes difficult for an outsider to differentiate the 
hardcore poor from the merely poor.  But at the lowest 
levels, there is the highest risk for trafficked persons, 
child labor, and women forced into prostitution.  The winner 
of this category shows that micro-credit obeys the same 
economic laws as other commercial endeavors, and that there 
are ways to provide financial services at all levels. 
Rangpur Dinajpur Rural Services (RDRS) has provided 26,930 
micro-credit customers with loans and has done so at 9% 
interest.  This is remarkable, since the typical interest 
rate for micro-credit is 10%.  RDRS has thus gained market 
share by undercutting other micro-credit institutions, 
providing access to even the most needy financial consumers, 
and still maintaining a 90% repayment rate. 
 
BEST MICROENTREPRENEUR 
---------------------- 
 
¶5.  The winner in this category is a great example of how an 
entire community can be improved.  From an initial loan of 
BDT 5,000 (approximately US $75) to buy a loom, Zakir Hossain 
has continued the upward spiral of repayment and larger loan 
to the point when his ninth loan was for BDT 275,000 
(approximately US $4,230).  He now owns over 80 looms, 
employs 120 weavers, his monthly payroll expense alone is 
over BDT 300,000, and he is diversifying into the food 
business by purchasing an oil press.  But even beyond all 
this he has begun making small loans himself within his 
community, in some cases even to his own employees, for them 
to purchase their own looms and start up their own 
businesses.  By his example, and by his own loans, he has 
 
DHAKA 00006038  002 OF 002 
 
 
lifted his community up and given them the ability to achieve 
economic stability. 
 
MOST INNOVATIVE BUSINESS 
------------------------ 
 
¶6.  When Nilufar Yasmin's husband lost his job in Dhaka 
making sports equipment and returned to her in their small 
village, they were in severe financial hardship.  From a loan 
of BDT 4,000 (approximately US $65), she began utilizing 
local wood to make cricket bats and now operates a successful 
factory employing many people in the village.  She has also 
gone through the loan/repayment/larger loan cycle five times 
since 2003, the latest being BDT 50,000 (approximately US 
$715).  Her hopes for a bright future include her own saw 
mill to provide upstream supply chain management, and 
expanding from distributing cricket bats all over Bangladesh 
to distributing them worldwide.  Showing her business acumen, 
she talks about the need to begin placing her own labels and 
stickers on the bats in the village, to create her own brand 
image.  In a nice gesture, she was escorted to accept the 
award by the Captain of the Bangladesh National Cricket Team. 
 
CONCLUSION 
---------- 
 
¶7.  Citigroup Foundation's stated goal of the award is to 
promote micro-enterprise, to recognize the success stories of 
the entrepreneurs, and to put the spotlight on local 
micro-entrepreneurs who are helping to lift the economic 
fortunes of their communities.  Each winner received a plaque 
and a check for US $4,000, which coincidently was in most 
cases the amount of the initial loan they received; except 
the loan was in Bangladesh Taka, for approximately US $65. 
BUTENIS