1 Mohammad Abdul Mannan Mohammad Abdul Mannan  Managing Director & CEO  Islami Bank Bangladesh Limited

Poverty defined by United Nations Poverty defined by United Nations Lack of basic capacity to participate effectively in society Not having enough to feed and clothe a family Not having a school or clinic to go to Not having the land to grow food or a job to earn living Not having access to credit Insecurity, powerlessness and exclusion Susceptibility to violence, living in marginal or fragile environments 2

Poverty defined by World Bank  Low income and inability to acquire the basic goods and services: low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life. 3

Poverty Dimensions Shaky livelihoods Excluded locations Physical limitations Gender relationships Problems in social relationships Lack of security Abuse by those in power Dis-empowering institutions Limited capabilities Weak community organizations Source: Voice for the Poor: World Bank 4

Poverty statistics : 925 Million hungry people in 2010 Regions People  Asia and the Pacific Million  Sub-Saharan Africa Million  Latin America & Caribbean - 53 Million  Near East and North Africa - 37 Million  Developed Countries -19 Million 5

 Banks 6 Public SectorPrivate Sector PRSP : IMF & World BankNGOs Country-driven, Result-oriented, Comprehensive, Partnership-oriented, and Based on a long-term perspective. Charitable orientation Service orientation Participatory Empowering orientation MDGs: United Nations and OthersBanks Goals agreed to achieve by 2015: Eradicating extreme poverty,extreme poverty Reducing child mortality rates,child mortality Fighting disease epidemicsepidemics Partnership for development Financial Inclusion Priority based finance Need based finance Micro Finance

Trickledown Approach Assumptions/Features  Riches are the driving force behind economic growth.  Wealth will naturally trickle down and benefit everyone.  Ensuring the right environment for the rich and the larger companies Strategies : ◦ Market Mechanism ◦ Growth promotion Result : Benefits hardly reached the poor 7

Cooperative Movement Features :  Persons voluntarily cooperate for mutual social, economic, and cultural benefitvoluntarily  An expansion of decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders. ◦ Occupied by the well-to-do farmers Result : Failed to benefit the Small Farmers and Landless 8

Target Group Approach Strategies/Instruments Microfinance, Credit Entitlement, Group replaces collaterals Results/Outcomes: Could not reach the Extreme Poor Slow graduation process High interest rate 9

Parameters Status  Access to FinancePricing Basis  Non financial wantsIgnored  RepaymentMandatory  Maturity extension Excluded  Fellow feelingsNo Provisions 10

Islamic principles of poverty alleviation are based on the Islamic views of social justice and the belief in Allah Almighty. Islam defines poverty as a state whereby an individual fails to fulfill any of the five basic human requirements of life: (a)Faith, (b)Physical self, (c)Intellect or Knowledge, (d)Offspring, and (e) Wealth. 11

Maslow’sShatibi’s Need Need HierarchyPyramid Self- actualization 4. Esteem3. Belonging2. Safety1. Physiological 1. Jaruriah (Essentials) 2. Hajiah (Complementary) 3. Tahsaniah (Beautification)

Universal brotherhood Distributive justice Circulation of wealth Transfer payment Financial inclusion Filter mechanism Fellow feelings 13

Benevolent loan (Qardul Hasan) Zakah Awqaf Fidiyah (Compensation for non fasting) Mohor (Dowry paid to women while married ) Micro Finance 14

A tool of satisfying the financial needs of the poor following Shariah principles A form of socially responsible investment. A target group approach under Islamic financing modes. 15

Positive Measures Income GrowthFunctional Distribution of incomeEqual Opportunity 16

Preventive Measures Control of Ownership Prevention of Malpractice 17

Corrective Measures Compulsory transfer: ZakatRecommended Transfer: waqfGovernment’s Responsibility 18

Program able to address the extreme Poor Social Charter accepting that the Poor are entitled to get Initial Capital along with their microfinance entitlement Turning into a Credit-Plus Integrated Poverty Alleviation Scheme 19

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Particulars2011National Rank No of Village12,857 4 th position Out of 1500 MFI of the Country No. of Member Disbursement (Million BDT) 10,438 Outstanding (Million BDT) 7072 % of total investment2.18% Rate of Recovery99.58% Members Savings (Million BDT)

 Introducing Integrated (microfinance, Zakah and Awqaf) model  Targeting the extreme poor  Portfolio diversification 23