Microcredit, infrastucture and poverty alleviation programmes in urban Bangladesh

Bangladesh has been a proving ground for microcredit. State agencies and hundreds of NGOs have provided funds to millions of poor clients, often with impressive results. However, the urban poor population continues to soar. Can microfinance help residents of marginalised urban settlements overcome difficulties in accessing infrastructure?

Research from Practical Action assessed the impact of microcredit on informal settlements in the district town of Faridpur, 130 km south-west of the Bangladeshi capital, Dhaka. Many Faridpur slumdwellers have been displaced by floods and erosion and have taken refuge on elevated government and privately owned land. Many live in constant fear of eviction. Casual daily labour is the sole source of income for most men. Women have even fewer options and the informal sectors they work in are unregulated. The wells on which families depend are contaminated with arsenic.

For most residents the only access to services is via mastaans (‘muscle men’): corrupt civil servants, police, NGO representatives, trade unionists, politicians and local leaders. Promises of latrines, drinking water, land tenure and relief funds are made each election but soon forgotten.

Coordination between government, local non-governmental and international service providers is poor. They adopt a top-down approach, with little genuine participation. NGOs have been active in the slums of Faridpur, focusing primarily on micro-credit and raising awareness about health, nutrition and rights. Infrastructure work has been carried out with support from the Asian Development Bank and UNICEF. However, even in slums with a long history of assistance, almost all households continue to live in unsanitary conditions and are denied even the most basic water and sanitation provision.

The authors suggest that agencies neglect the factors which trap people in poverty:

• Of 24 service providers in Faridpur only three local NGOs are combating the causes of slum-dwellers’ vulnerability.
• Hindu minority communities are neglected.
• Investment in infrastructure has been sector-specific, uncoordinated, short-term. Beneficiaries were not consulted and maintenance issues were not addressed.
• Only two NGOs are working on housing issues or assisting communities to secure legal tenure.
• Lack of donor funds means local NGOs are unable to undertake work on micro-infrastucture development.

Despite the fact that urban poor people make major contributions to the Bangladeshi economy and provide essential services, the areas they occupy are seen by the authorities and middle classes as havens of crime, drugs, disease and environmental pollution. Neither the country’s latest five-year plan nor the interim Poverty Reduction Strategy Paper make any provision for allocating resources to this group.

Practical Action calls for:

• supporting networks to coordinate slum interventions
• a concerted arsenic removal programme
• transparency in allocation of state resources and determining access to services
• support for autonomous community organisations to help urban poor people articulate their rights
• liaison between local authorities and communities jointly to plan interventions, allocate resources and monitor impacts
• extension of urban poverty alleviation programmes to Faridpur and other secondary cities in Bangladesh.

Source(s):
‘Understanding Urban Livelihoods in a Secondary Town in Bangladesh’ by Satya Ranjan Saha and Habibur Rahman, chapter ten in ‘Confronting the Crisis in Urban Poverty: Making Integrated Approaches Work’, Intermediate Technology Publications, edited by Lucy Stevens, Stuart Coupe and Diana Mitlin, 2006

Funded by: UK Department of International Development R8257

id21 Research Highlight: 9 February 2007

Further Information:
Satya Ranjan Saha and Habibur Rahman
Practical Action Bangladesh
GPO Box 3881
Dhaka 1000
Bangladesh

Tel: +880 02  8111934, 9110060, 9123671
Fax: +880 02  8113134
Contact the contributor: bangladesh@practicalaction.org.bd; satya@itdg.bdmail.net

Practical Action - Bangladesh

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