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Impact of Rural Development Scheme of Islami Bank Bangladesh Limited on Beneficiaries in Mymensingh Sadar Area

T. Jinan
Ex-post graduate student
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

A. Bashar
Professor
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

N. Jahan
Ex-postgraduate student
Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

T. S. Khanam
Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

Abstract/ Executive Summary:

The present study was conducted to assess the impact of investment provided under “Rural Development Scheme” (RDS) of the “Islami Bank Bangladesh Limited” (IBBL) on the basis of using data collected from 25 respondents of each of group of investors, agriculture and business of the five selected villages in sadar upazila of Mymensingh district. Total household annual incomes were Tk. 59696 and Tk. 87332 respectively for the agriculture group and business group. The beneficiaries have increased their income (61 percent in agriculture sector and 89 percent in business sector) by using RDS credit. After joining the RDS, there was a remarkable improvement in the living standard of the participant households. Thirty one percent of total credit received from RDS was utilized for agricultural purposes, 53 percent for business purposes and 15 percent for family expenditure on an average. Recovery rate of the current credit was 100 percent. None of the respondents of the group was allowed to have new credit until preceding credit was paid back. The findings suggest that the monitoring mechanism should be improved so that clients do not utilize their invested money to any unproductive activities. It is also suggested that adequate size of the investment has to be provided to pursue income generating activities properly.

Keywords: Rural Development Scheme, Islami Bank Bangladesh Limited, Beneficiaries

Location: Sutiakhali, Vabokhali, Boyra, Digarkanda and Choto Bazar under sadar upazila of Mymensingh district, Bangladesh

Start Date:

End Date:

Program Area: Resource Development and Management

Non-commodity: Credit, Income generation

Objectives:

To examine the impact of the RDS micro finance investment on the life style of the beneficiaries living at Sadar Upazila of Mymensingh District in Bangladesh.

Methodology:

Keeping in view the objectives as well as time and fund constraints the areas Sutiakhali, Vabokhali, Boyra, Digarkanda and Choto Bazar under sadar upazila of Mymensingh district was selected for the study. Subsequently a list of current beneficiaries who have had been receiving investment for more than three years under RDS of the IBBL branch office located at Mymensingh town were collected. From the list beneficiaries selected randomly for the study were based on a minimum of 3 years practicing investment process in two groups (i) agriculture and (ii) business and the number was 25 in each group. Data collection was started in February, 2008 which was accomplished within 50 days. The researcher herself collected data with structured pre-tested questionnaire through personal interview with the individual respondents. After the completion of data collection, the data were then edited, coded and finally tabulated according to the objectives set for the study. Mostly tabular analysis was done using techniques of sum average, percentages, etc. To attain some of the results, necessary statistical techniques were also employed.

Source of Information: Progress. Agric. 19(2) : 205-215, 2008 ISSN 1017-8139

Article Link (Online Journal): http://www.banglajol.info/index.php/PA/article/view/16963/11914

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The RDS of IBBL is an important component of increasing income of rural people and thereby alleviate poverty from the rural Bangladesh. Most of the institutions provide credit in the traditional way which is based on security and interest. But the present study is based on collateral free Shariah considering the 90 percent Muslims of the country. The present study is, therefore, an attempt to investigate the impact of the RDS investment extended by the IBBL and to generate information, which may help the researchers and planners. The present study is concerned with the rural people, who took loan from the IBBL Mymensingh sadar branch. It aims at examining the adequacy, using pattern of loan, repayment performance and impact of loan on different types of sample. In this study there was a positive and significant linear relationship among total annual investment, total annual expenditure, total annual income and total annual saving. One of the main problems of utilizing investment under RDS was lack of training facilities arranged by RDS. Analysis indicating the socio economic changes of the respondents showed that majority of the respondents’ livelihood have been improved to a significant level.

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