Rural Development Scheme of IBBL
Subject: Organizational Behavior | Topics:

Introduction:

Internship is an important & unavoidable part for completing the graduation in business studies. Internship can help the students to acquire practical knowledge about his or her particular learning. For the four years BBA program, internship is a major requirement for sharing knowledge & to gather knowledge. I need to do my internship in any business organization that is well reputed in its field. I have got a great opportunity to involve in a leading commercial bank name Islami Bank Bangladesh Ltdwhich is a recognized bank not only in our country but also all over the world.

From the very beginning of the world human being need well financing. At that time it was very difficult to identify well banking system. But modern banking system makes sure welfare and profitable financing. Financing is directly related with human life. Banker always faces social responsibilities and duties of providing safe and effective financing, demanding uncompromising efforts of all levels of activities.

Islami Bank Bangladesh Ltd. has been the nations leading banking specialties of uncompromising quality with world class banking for the last decade. This leading banking company of Bangladesh has been making every effort to ensure the effectiveness and safety of the financing which it makes sure.Islami bank provide the highest quality financing at comfortable facilities to fulfill the needs of the millions of people of the country. Regular introduction of innovative system in line with the needs of customers has been the key to the company’s success over the years.

IBBL always follows some basic criteria to satisfy the quality management. Their mechanism assurance system establishes control or checkpoint to ensure the quality of the investment during a certain period.

‘Rural Development Scheme’ has been introduced in 1995 to cater to the investment needs of the agriculture and rural sector to create opportunity for generation of employment and raising income of the rural people with a view to alleviate poverty. It is treated as first Islamic Microfinance Model in the Country & abroad.

Objective of the Study:

The broad objective of the study is to fulfill the requirement internship and achieving academic and practical knowledge about how organizatiom are managed in real life. This report also has some other specific objectives, these are

  •  To know the historical background of the organization including its mission, vission, and objectives.
  •  To know the present status of Rural development Scheme of IBBL.
  •  To know and analyse the prospect of Rural development Scheme of IBBL.
  •  To diagonosis the present problems of RDS flurishment.
  •  To recommend the actions that could be taken to improve the performance of distribution and finance department of the organization.

Rationality of the Study:

Bangladesh with its 38% people living below poverty line and 18% living in absolute poverty is suffering from acute rural-urban economic disparity coupled with illiteracy, lack of proper health and sanitation facilities. The country’s economy is basically an agrarian one with vast majority living in rural areas. The agriculture sector is unable to provide any further scope for employment resulting in influx of rural population towards urban areas. For this reason Islami bank Bangladesh Limited wanted to eradicate poverty by Rural development scheme. That’s why; the writer egger to mention different types of IBBL’s scheme on Rural Development.

 Scope of the Study:

Islami Bank Bangladesh Limited is large Banking organization. It has several department. It is not possible for an internee to cover all of the department of IBBL in his or her study within the short period of time of internship and they do not get access to all department also. The writter will focus on the Rural development scheme of IBBL and on it present status,problem and prospect in details for Three  (02) months started from October 08, 2012 for his internship program. It will not discuss about the investment scheme, deposit scheme or other scheme in the report.

Methodology of the Study:

Source of Data

The writter used both primary and secondary sources of datato make the report more meaningful and presentable; both the following sources of data and information will be used widely:

a) The Primary Sources:

  •  Face-to-face discussion with the relevant officials.
  •  Practical/ hands-on experience of working at the RDS department.
  •  Study of background material and relevant files provided by the officers concerned.
  •  Interviewing people

b)  TheSecondary sources:

  •  Annual Reports.
  •  Working Papers
  •  Office Files
  •  Selected Books.
  •  World wide webs.

Data collection and questionnaire design:

The primary data was collected through interview techniques with the help of structured questionnaire. Here 25 samples size were counted from 2284 population for RDS client, 8 samples size for RDS officer ware counted. Formulating such questionnaire, formal standandard was followed where both the closed and open ended questionnaire will be adopted. It also contains the combination of both the positive and negative question panel.

Tools and Techniques:

The writter used several tools and techniques to evaluate the performance of IBBL and make the report more effective an informative to the readers of the report. some of those tools are

Finacial techniqes:

  •  Ratio analysis, Common size statement analysis, Variability measure,

Statistical techniques:

  •  Microsoft Excel
  •  MS Words
  •  SPSS 16

Acronyms:

AbbreviationsExplanation
AAOIFIAccounting and Auditing Organization for Islamic Financial Institutions
ACLAccess Control List
ADAuthorized Dealer
ADSActive Directory Services
AGMAnnual General Meeting
ALCOAsset Liability Committee
AOFAccount Opening Form
ATMAutomated Teller Machine
AWCAAl-Wadiah Current Account
BABBangladesh Association of Banks
BACHBangladesh Automated Clearing House
BAFEDABangladesh Foreign Exchange Dealers Association
BASBangladesh Accounting Standards
BBBangladesh Bank
BCCIBank of Credit and Commerce
BFRSBangladesh Financial Reporting Standards
BGIIBBangladesh Government Islamic Investment Bond
BLBad/Loss
BMBranch Manager
BMREBalancing, Modernization, Replacement, Expansion
BOBeneficiary Owners
BPRDBangladesh Rules of Policy Department
BRPDBanking Regulation & Policy Department
CACash Credit (Hypothecation)
CAMLCOChief Anti Money Laundering Compliance Officer
CEOChief Executive Officer
CFOChief Financial Officer
CIBCredit Information Bureau
CPIConsumer Price Index
CRISLCredit Rating Information and Service Limited
CRMCredit Risk Management
CSBIBCentral Sharia’s Board for Islamic Banks of Bangladesh
DBMSDouble Benefit Deposit Scheme
DPDeposit Promissory
DRSDisaster Recovery Site
EFTElectronic Integrated Banking System
EPSEarnings Per Share
FBPForeign Bill Purchased
FDRFixed Deposit Receipt
HOHead Office
HPHigher Purchase
HPSMHire-Purchase under ShirkatulMelk
IBBLIslami Bank Bangladesh Limited
IBTRAIslami Bank Training & Research Academy
IMDIslamic Mode of Deposit
LCLetter of Credit
MEISMicro Enterprise Investment Scheme
MISManagement Information System
MPBMudaraba Perpetual Bond
MSSAMudaraba  special Savings account
MSAMudaraba Savings Account
MTDMudaraba Term Deposit
PADPayment Against Document
TINTax Identification Number

About Rural Development Scheme:

We know that Bangladesh is a developing country. There are about 38% people living below poverty line and 18% living in absolute poverty is suffering from acute rural-urban economic disparity coupled with illiteracy. The country’s economy is basically an agrarian one with vast majority living in rural areas. The agriculture sector is unable to provide any further scope for employment resulting in influx of rural population towards urban areas. Rural areas are characterized by stagnant agriculture and scanty industries. Underemployment and unemployment is a regular phenomenon particularly in rural areas. The vast human resources have remained unutilized due to lack of education, proper training and concerted efforts to help grow the rural economy. It results in uneven distribution of income which causes serious setback in balanced geographical growth as well as growth of GDP. Islami Bank Bangladesh Limited was founded with the major objective of establishing Islamic economy for balanced economic growth by ensuring reduction of rural-urban disparity and equitable distribution of income. In view of the above, Branches of the Bank have been encouraged to invest their deposits in their respective areas and in particular for the economic uplift of the rural people. Accordingly, a Scheme in the name and style of ‘Rural Development Scheme’ has been introduced in 1995 to cater to the investment needs of the agriculture and rural sector to create opportunity for generation of employment and raising income of the rural people with a view to alleviate poverty. It is treated as first Islamic Microfinance Model in the Country & abroad.

 Objectives of the Scheme:

a. To finance self-employment and income generating activities of the rural people, particularly the rural unemployed youths and the rural poor.

b. To alleviate rural poverty through integrated rural development approach.

c. To extend investment facilities for hand tube-wells and rural housing, keeping in view             the needs of safe drinking water and housing facilities of the rural dwellers.

d. To provide medical facilities and education to the down-trodden people.

Integrated development approach:

The purpose of the Scheme is not only providing Micro investment facilities to the stake-holder but also ensures various types of facilities & services to the downtrodden people as a part of integrated development approach as well as corporate social responsibility. The following areas have been covered under the Scheme:

a. Humanitarian Assistance program.

b. Education program.

c. Capacity building or Training program.

d. Environment protection program.

Command Area and Baseline Survey:

Each designated branch & SME branch selects villages within a radius of 10 kilometers of the branch premise. Following criteria is being followed in selecting a village:

a. Easy communication.

b. Availability of agriculture and other off-farm activities.

c. Abundance of low income people.

After primary selection of a project area consisting of 4 to 6 village’s branch conducts detailed baseline survey to identify the target group people and the verities of economic activities in those areas. The concerned branch has to ensure the availability of at least 400 target group people in the selected area.

Target group:

a. Able bodied & industrious rural poor people having age between 18 to 50 years and the permanent resident of the project area.

b. Farmers having cultivable land maximum 0.50 acres and the sharecroppers.

c. Persons engaged in very small off-farm activities in rural areas.

d. Destitute women and distressed people.

Analysis of differentiated features of Rural Development Scheme

Rural Development Scheme is based on ideals and teachings of ISLAM which is totally different from traditional micro credit systems of thousands of NGOs and GOs. Table 1 has described the differentiated features of RDS. That is, RDS can be differentiated from any traditional micro-credit programs with respect to the stated differentiated features as above. There are similarities between RDS and traditional micro-credit programs with respect to group size & formation, frequency of meeting, mode of payment, duration of loan, coverage, single loan exposure etc.

How much loan have you got?

Table :How much loan have you got?

Valid

Frequency

Percent

<10000

4

16.0

10000-20000

3

12.0

21000-30000

9

36.0

31000-40000

5

20.0

41000-50000

2

8.0

>50000

2

8.0

Total

25

100.0

Explanation:

There are majority of percentages (9) of clients have gotten 21000-30000 Tk. as a loan, whereas second majority of percentage (3,4,5) of clients have gotten <10000-20000 & 31000-40000 Tk. as loan, one the other hand lowest of percentage 8% (2) ofclients have gotten more than 50000 Tk. as loan.

What is your satisfaction level, as clients of RDS?

Table : What is your satisfaction level, as clients of RDS?

Valid

Frequency

Percent

Highly Satisfied

11

44.0

Satisfied

6

24.0

Neither satisfied nor dissatisfied

2

8.0

Dissatisfied

6

24.0

Highly Dissatisfied

0

0

Total

25

100.0

Explanation:

There are a majority of percent (11) of clients was highly satisfied to get a loan and other facilities, while  24% (6) of clients was satisfied to get a loan and other facilities. On the other hand the lowest of percent (2) of clients was neither satisfied nor dissatisfied to get a loan and other facilities while 24%  (6) of clientswas highly dissatisfied to get a loan and other facilities.

If dissatisfied mention why?

Table : If dissatisfied mention why?

Valid

Frequency

Percent

Amount of loan is not sufficient

3

50.0

RDS’s  project area is so narrow

2

33.33

No mention

1

16.66

Total

6

100.0

Explanation:

There are a majority of percentage (3) of people viewed that their amount of loan is not sufficient, while about 33.33% (2) of people commented that RDS’s project area is so narrow.

What is your purpose of taking loan from the RDS.?

Table : What is your purpose of taking loan from the RDS.?

Valid

Frequency

Percent

Housing

3

12.0

Children Facilities

4

16.0

Business

13

52.0

Entrepreneur

3

12.0

Others

2

8.0

Total

25

100.0

Explanation:

There are a majority of percentage (13) of clients have taken loan for the purpose of business, whereas (3, 3, 4) of clients have taken loan for the purpose of housing, children rearing & entrepreneur. One the other hand minimum of percentage (2) of client has taken loan for the other purposes.

Field officers of this bank provide efficient service to the client:

Table :Field officers of this bank provide efficient service to the clients

Frequency

Percent

Strongly Agree

16

64.0

Agree

7

28.0

Neither agree or disagree

2

8.0

Strongly disagree

0

0

Total

25

100.0

Explanation:

There are majority of percentage (16) of clients was strongly agreed with this statement, whereas 28% (7) of clients was agreed with this statement. The lowest percentage (2) of clients was neither agreed nor disagreed with this statement.

You can pay monthly installment at due time regularly?

Table : You can pay monthly installment at due time regularly?

Frequency

Percent

Strongly Agree

9

36.0

Agree

7

28.0

Neither agree or disagree

4

16.0

Disagree

5

20.0

Strongly Disagree

0

0

Total

25

100.0

Explanation:

There are a majority of percentage (9) of clients was strongly agreed with this statement, whereas 28% (7) of clients was agreed with this statement but lowest of percentage (4) of clients was neither agree nor disagree with this statement.

If you find your answer is negative, what is the reason not to pay regularly?

Table :If you find your answer is negative, what is the reason not to pay regularly?

Valid

Frequency

Percent

Income is not available

3

60.0

Its habit

1

20.0

Do not come at center for family work

1

20.0

Total

5

100.0

Explanation:

There is a majorityof percentage (3) of client comment that their income is not available, whereas lowest of percentage (20) of clients comments that it was habit andthey do not come at a center for family work.

Have you taken any other loan from any other organization?

Table :Have you taken any other loan from any other organization?

Valid

Frequency

Percent

Other Bank

5

20.0

Cooperatives

3

12.0

NGO

3

12.0

Others

1

4.0

None

13

52.0

Total

25

100.0

Explanation:

There are a majority of percentage (13) of clients haven’t taken loan from any other organization, second majority of percentage (5) of clients have taken loan from Bank, 12% (3) of clients have taken loan from Cooperatives and from NGO, whereas lowest percentage of clients taken loan from others.

RDS employee offer advice & guidance to the client:

Table : RDS employee offer advice & guidance to the client

Valid

Frequency

Percent

Strongly Agree

18

72.0

Agree

3

12.0

Neither agree or disagree

3

12.0

Disagree

1

4.0

Strongly Disagree

0

0

Total

25

100.0

Explanation:

There are a majority of percentage (18) of clients was strongly agreed with this statement, whereas12% (3) of clients was agreed with this statement, whereas lowest of percentage of clients was disagree with this statement.

RDS department complete the service at their promise time:

Table : RDS department complete the service at their promise time

Valid

Frequency

Percent

Strongly Agree

7

28.0

Agree

9

36.0

Neither agree or disagree

7

28.0

Disagree

2

8.0

Strongly Disagree

0

0

Total

25

100.0

Explanation:

There are a majority of percentage (9) of clients was agreed with this statement, whereas 28% (7) of clients was strongly agreed &neither agree or disagree with this statement, whereas lowest of percentage of clients was disagree with this statement.

In which way you had utilizes your borrowed money?

Table :In which way you had utilizes your borrowed money?

Valid

Frequency

Percent

Farming

10

40.0

Manufacturing

2

8.0

Business

8

32.0

Plantation

1

4.0

Livestock

1

4.0

Others

3

12.0

Total

25

100.0

Explanation:

There are majority of percentage that mean 40% (10) of clients had utilized their browed money to farming, whereas second majority of percentage (8) of clients had utilized their browed money to business, 12% of clients had utilized their browed money to other purposes, one the other hand the lowest of percentage that means 4% of clients had utilized their browed money to plantation and livestock.

RDS’s clients send their child to school:

Table : RDS’s clients send their child to school

 

Valid

Frequency

Percent

Strongly Agree

8

32.0

Agree

14

56.0

Neither agree or disagree

1

4.0

Disagree

1

4.0

Strongly disagree

1

4.0

Total

25

100.0

Explanation:

There are a majority of percentage 56% (14) of client was agreed with this statement that is RDS’s clients send their child to school.Whereas lowest of percentage of client was neither agree or disagree, disagree & strongly disagree with this statement.

Present social/financial status is good than before borrowing loan from RDS:

Table : Present social/financial status is good than before borrowing loan from RDS

Valid

Frequency

Percent

Strongly Agree

9

36.0

Agree

14

56.0

Neither agree or disagree

2

8.0

Disagree

0

0

Total

25

100.0

Explanation:

There are a majority of percentage that means 56% (14) of clients was agreed with this statement that is Present social/financial status is good than before borrowing loan from RDS whereas 36%  (9) of clients was strongly agreed with this statement rest of lowest percentage (2) of clients was neither agree nor disagree with this statement.

What your suggestions about the development of RDS of IBBL?

Table : What your suggestions about the development of RDS of IBBL?

Valid

Frequency

Percent

Project Area should be  wide ranged

14

56.0

It would be better if loan is bigger amount

8

32.0

Installment  period would be increase

3

12.0

Total

25

100.0

Explanation:

There are amajority of percentage (14) of clients was suggest that RDS’s  area should become wide range, whereas 32% (8) of clients was suggest that It would be better if loan is mass amountbut lowest of percentage (3) of clients was suggest that Installment period would be increase.

FOR RDS’S OFFICERS

Part (A) – Demographics:

Table :

Valid

Frequency

Percent

How old are you?20-30

1

12.5

31-40

2

25.0

41-50

4

50.0

51-60

1

12.5

Total

8

100.0

What is your educational qualification level?

 

BBA/Honors/Degree/Fazil

2

25.0

MBA/Masters/Kamil

6

75.0

Total

8

100.0

Do you work with any other organizationYes

2

25.0

No

6

75.0

Total

8

100.0

if yes, please specifyPoor development society

1

12.5

Local welfare unity

1

12.5

Total

2

25.0

Missing  System

6

75.0

Total

8

100.0

What is your service period on RDS of IBBL?

Table :What is your service period on RDS of IBBL?

Valid

Frequency

Percent

<2 years

2

25.0

3-4 years

3

37.5

4-5 years

2

25.0

6-7 years

1

12.5

Total

8

100.0

Explanation:

There are a majority of percentage (3) of officers’ service period was 3-4 years, whereas second majority of  percentage of officers (2) of officers’ service period was <2 and 4-5 years, but rest minimum percentage of officers’ service period was 6-7 years.

The Head of RDS department helps the concerned employee with RDS related issues.

Table :The Head of RDS department helps the concerned employee with RDS related issues.

Valid

Frequency

Percent

Agree

1

12.5

Strongly Agree

5

62.5

Not Sure/not applicable

2

25.0

Disagree

0

0

Total

8

100.0

 Explanation:

There are a majority of percentage (5) of officers was strongly agreed with this statement that is “The Head of RDS department helps the concerned employee with RDS related issues” whereas majority percent (2) of officers was not Sure with this statement.

What extent you are confident that the scheme would be successful to eradicate poverty from our society:

Table :What extent you are confident that the scheme would be successful to eradicate poverty from our society

Valid

Frequency

Percent

Moderately Confident

3

37.5

Completely Confident

5

62.5

No Confident

0

0

Total

8

100.0

Explanation:

There are a majority of percentage (5) of officers has complete confident that is RDS would be successful to eradicate poverty from our society, whereas minority of percentage (3) of officers has moderate confident with this statement

During your service period of RDS, have you taken any training?

Table :During your service period of RDS, have you taken any training?

Valid

Frequency

Percent

Yes, once

1

12.5

Yes, twice

3

37.5

Yes, three times or more

4

50.0

Total

8

100.0

Explanation:

There are a majority of percentage that means 50%, (4) of officers have taken training at three times or more, whereas (3) of officers have taken training at two time but minority of  percentage of officers have taken training at once time.

How many centers do you visit in a day?

Table :How many centers do you visit in a day?

Valid

Frequency

Percent

1 center

2

25.0

3 center

6

75.0

Total

8

100.0

 Explanation:

There are a majority of percentage (6) of officers have visited 3centers in a day whereas (6) of officers have visited 2 centers in a day among 8 officers of RDS of IBBL.

RDS clients pay weekly installments at a due time:

Table : RDS clients pay weekly installments at a due time

Valid

Frequency

Percent

Strongly Disagree

2

25.0

Disagree

1

12.5

Neither agree/ Disagree

0

0

Agree

3

37.5

Strongly Agree

2

25.0

Total

8

100.0

Explanation:

There are a majority percentageof officers were agreed with this statement that is “RDS client’s paid weekly installments at a due time” whereas minority of officers disagreed with this statement.

If they did not pay, what is your duty at that time as an officer of RDS of IBBL?

Table : If they did not pay, what is your duty at that time as an officer of RDS of IBBL?

Valid

Frequency

Percent

We collect installment at any how

1

12.5

Group leader have to pay group member’s installments

6

75.0

It would be forgive

1

12.5

Total

8

100.0

Explanation:

There are a majority percentage that means 75%, (6) of officers gave argument that group leader have to pay group member’s installments, whereas minority of percentage of officers give argument that we collect installment at any how and It would be forgive.

What’s your satisfaction level working at the RDS?

Table : What’s your satisfaction level working at the RDS?

Valid

Frequency

Percent

Highly satisfied

2

25.0

Satisfied

2

25.0

Neither Satisfied or Dissatisfied

4

50.0

Highly Dissatisfied

0

0

Dissatisfied

0

0

Total

8

100.0

 Explanation:

There are about 50% (4) of officers was satisfied to working at RDS, whereas 50% (4) of officers was dissatisfied to working at RDS.

How much interest is charged on RDS investment from client?

Table :How much interest is charged on RDS investment from client?

Valid

Frequency

Percent

5-7%

4

50.0

8-11%

4

50.0

Total

8

100.0

Explanation:

There are about 50% (4) of officers viewed that the interest charge was 5-7%, whereas 50% (4) of officers viewed that the interest charge was 8-11% on RDS investment.

RDS of IBBL is a good place for training and personal development:

Table : RDS of IBBL is a good place for training and personal development

Valid

Frequency

Percent

Agree

5

62.5

Strongly Agree

3

37.5

Neither agree/disagree

0

0

Disagree

0

0

Total

8

100.0

Explanation:

There are a majority of percentage (5) of officers was agreed with this statement that is “RDS of IBBL is a good place for training and personal development” where minimum of percentage 37.5% (3) of officers was strongly agreed with this statement.

Please input your own suggestions about RDS of IBBL:

Table :  Please input your own suggestions about RDS of IBBL

Valid

Frequency

Percent

RDS area would increase

2

25.0

RDS department would be concern at right of RDS’s client

3

37.5

Head of RDS department should give more facilities to RDS officer

3

37.5

Total

8

100.0

Explanation:

There are a majority of percentage (3) of officers was suggest that “RDS department would be concern at right of RDS’s clientand Head of RDS department should give more facilities to RDS officer, where’s 25% (2) of officers was suggest that “RDS area would increase.

Findingsof this Report

For the clients’ perspective:

Strengths:

  1. IBBL give the loan on the various purposes up to 50000 Tk.
  2. There are a majority of percentage of RDS clients was satisfied as a clients of RDS.
  3. Majority of clients strongly agreed that field officers of this bank provide efficient service to the clients.
  4. Two thirds of clients can pay monthly installment at due time regularly.
  5. Almost all of clients agreed that RDS employee offer advice & guidance to the client
  6. RDS’s positive side is revealed by clients is that, 88% of clients they can send their children to school.
  7. Majority of clients viewed that their social and financial status had improver by the taking loan from RDS of IBBL then the previous time.

Problems:

  1. Lowest percentages of clients get loan only above 50000 Tk.
  2. Its great problem is that RDS clients do not use amount of loan on the mentionable project. Such as majority of percentage of clients had taken loan on Business purpose but only one third of clients utilized that money on business purposes.
  3. Lowest of percentage of clients had utilized their loan on livestock.
  4. Lots of clients had taken loan from other organization except RDS of IBBL.

For the RDS officers’ perspective

Strengths:

  1. Majority of officers are experienced, as their service period was 3-7 years.
  2.  Maximum of officers agreed that The Head of RDS department helps the concerned employee with RDS related issues.
  3. 100% of officers have confided that the scheme would be successful to eradicate poverty from our society.
  4. Officers of RDS are trained enough to handle its operations.
  5. If the clients did not pay monthly installment at due time, the group leader have to pay group member’s installments, this viewed majority of officers.
  6. Its great positive side is that RDS interest rate may 5-11% where’s others loner organization’s interest charge minimum 30% and more.
  7. Almost all of officers agreed that on the statement of RDS of IBBL is a good place for training and personal development.

Problems:

  1. There are few centers at their project area. For the reason of narrow project area, the centers of RDS team are so few.
  2. More than one third of officers viewed that RDS clients did not pay weekly installments at a due time.
  3. About 50% of officers neither Satisfied or dissatisfied on the working of RDS project.
  4. Where’s 50% of officers neither Satisfied or dissatisfied on the working of RDS project one the other hand all of officers agreed that on the statement of RDS of IBBL is a good place for training and personal development.

Others findings:

  1. The government intentions of developing housing. And agriculture sectors and investment area will large.
  2. The efficiency of sound exchange reserve level is providing a good opportunity for effective investment decisions.
  3. The business growth is Satisfactory
  4. Low cost fund.
  5. Poor borrowers are not aware about modern technology. They depend much on the traditional method of farming, resulting in low production.
  6. Bangladesh with its 40percent people living below poverty line and 18percent living below hardcore poverty is suffering from acute rural-urban economic disparity coupled with illiteracy, lack of proper health and sanitation facilities. (Source: Investment Schemes of IBBL with special reference to RDS which is given by Md. HabiburRahman, Deputy Managing Director, IBBL)
  7. Increased competition in market for another Islamic Bank like (SIBL)

 Conclusions:

Microcredit is now a well-established poverty alleviating program which is being implemented across the world. Rural Development Scheme of IBBL is a scientific and sharia’h based micro credit system. RDS has large positive impact, which is observed in the case of food intake, housing, education, clothing, taking medical treatment, use of toilet, use of clear pure water, income, expenditure and as such economic, socio-economic, health and physiochemical environment. It is observed from the study that RDS helps to improve member’s education level. Sanitary facilities enjoyed by RDS members were better than before joining RDS. The income levels have gone up of all members after joining RDS. This has led to higher food security for the poor. The higher level of income has again been translated into higher expenditure for food items and other goods & services. As time passes RDS members tend to consume good food and this leads to higher intake of nutrients. It has been found that the per capita expenditure on health and education has improved dramatically amongst RDS member’s science its intervention. It is also seen as a critical input for small-scale enterprises. One of the most important changes that have taken place in RDS program households are the creation of employment opportunities, particularly for women. Introduction of housing loans and the loans for such things as latrine, education, tube wells and others would definitely attract the general people to come within the umbrella of the RDS.

Recommendations:

RDS can be differentiated from any traditional micro-credit programs with respect to target group, selection criteria, profit sharing basis, value generation, low charge, monitoring mechanism, mode of investment, size of loan etc. It has registered phenomenal growth in investment, coverage, and deposit. This has been found very robust across the years under study. It has been found to exert a positive and significant influence in gross monthly income of borrowing members; but the income is found not significantly associated with family size, size of assets, education. This means that RDS cannot influence these socio-economic factors. This may be because of lower size of investment, forward lending, lake of opportunities etc. The authority of RDS should increase the size of investment in order to cope with the change in value of currency because of inflation and other economic reasons. RDS should project their volume of activities for future; then all parties involving in managing. RDS should be assigned and held responsible for the job assigned at the beginning of the year. That is, the performance of RDS should be subject to Balanced Score Card System. RDS with its differentiated features can lock more market share in the country if it comes out with more generous policy like selection of people not on religions basis. The repayment should be balloon basis. That is, repayment system should start at least after one month of taking loan, and should be based on the nature of cash flow being generated from farm and non-farm activities like seasonal cash flow and regular cash flow.

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