The Ultra Poor In Bangladesh: 140 Euros For A New Life

This article originally appeared in print in the German magazine, Maxi, for its July 2012 edition.  All text and photos are by David Weyand. What follows below is the full article, translated from German.

A project funded by the EU is supporting the poorest of the poor in Bangladesh, especially women. Through it, they are learning how to earn a living. The trick is this – start-up funds are not loaned, but given as a grant.

Sreemonti Basonti Rani, 48, squats on the concrete floor in front of her tin-roofed hut and carefully rolls out a poster. Three uneven beams support the verandah where she and one of her goats sit. The goat is picking at her colourful sari, but Basonti has no time for play; she is looking at herself. On the paper on the ground she sees her own face and eyes and the little red dot on her forehead – Basonti is looking very proudly at her own election poster. 

For the past year she has been a local Union Parishad (council) member who is responsible for social safety net programmes.  For an extremely poor woman like her, becoming a politician is almost a sensation in Bangladesh. “Two years ago we barely had enough to eat. We felt ashamed of our poverty,” Basonti remembers.  

At that time Basonti rarely left her home, where there were no animals.  Now a pregnant cow and a one-year old calf are grazing in front of her verandah, and five days a week Basonti works in an office. In her small hut, a new fan whirrs smoothly above her new table and her new bed. “Since I have been elected I have to receive guests – therefore I need furniture,” she says confidently, while playing with a mobile phone. It is very obvious Basonti’s life has changed completely.

It all started two years ago when staff from a local non-governmental organization arrived from the provincial town of Sirajganj in Basonti’s village. They were sent by the United Nations World Food Programme (WFP). Their mission: to distribute money to those who need it most – to people known in Bangladesh as the ‘ultra poor’. Since 2009, the “Food Security for the Ultra Poor” (FSUP) project has reached many of these poorest of the poor, numbering about 30 million in Bangladesh. The project is mainly funded by the European Union. Four organizations, including WFP, implement such programmes. To identify the ultra poor, WFP staff drove through eight localities in three districts, along paddy fields and dried up riverbeds, passing through places with few houses and many huts. In most cases, the ultra poor are unemployed or day labourers, and own just a small piece of land, if any at all. Many suffer from chronic under-nutrition. The poorest households are often headed by women who have been widowed, divorced or abandoned, or those whose husbands are old or disabled or otherwise unable to work.  

Basonti was one such woman. Her husband Jogul Chondra, 55, could not feed his family – he only earned about 10 Euros a month. “That was clearly not enough”, says Basonti. To finance tutoring and a better school for her daughter, Basonti took a microcredit loan of 3000 Taka (about 30 Euros) in 2006.

This might not seem very much, but it took her and her family 46 weeks to pay it back. “I will never take a microcredit again”, says Basonti angrily. And since she has been getting money from WFP, she has had no need further need for microcredit.

When the NGO- staff came in 2010 they called in all the villagers for a meeting and asked them about their income and standard of living. They screened and checked the results and then decided who was eligible to join the project. A total of 30,000 women living in 674 villages have received money – an initial investment amount of  about 140 Euro, plus five Euro each month for two years. And they don’t have to pay back a single Cent!

The woman responsible for this project sits in an air-conditioned office in a high rise Dhaka building. Christa Räder, 54, an agricultural economist is WFP’s country director in Bangladesh. The German national speaks to ministers and ambassadors but she also understands the needs of the poorest. Back in the mid eighties she lived in a village in the northwest of Bangladesh and conducted field research in order to understand people’s livelihoods and coping strategies. The results were clear. “Most of the poor can work themselves out of poverty if they receive initial support,” says Räder.

She smiles and adds: “Already back then the research results suggested a project like FSUP. But I did not dare to come up with such an idea.”

This is understandable. Giving cash as a grant means turning away from conventional development models, and doing so is also quite costly (for WFP, the project cost is about15 million Euros).

“Nowadays it is clear that microcredit does not work for the ultra poor,” says Räder. 

Too many borrowers fail to climb out of poverty due to inflexible contracts, and in fact become even poorer due to high interest rates.

Rosena, 30, did not have to deal with this. She received cash, with no expectation of repayment.

Her village sits in the middle of a large expanse of green paddy fields, shaded by palms and mango trees, one tin-roofed house after another. Laughter rises from one of the huts in which more than twenty women in colourful saris sit together in a circle on old jute bags. Some of them play with some grass meant for weaving - Rosena is one of them. She is the elected President of the “Shapla Mohila dal” – a women’s group named after the county’s national symbol, the Water Lily. When Rosina starts speaking all others are silent. “Who is helping in the paddy field next week?” she asks. All the women start talking at the same time, but then ten women raise their hands. They will volunteer.

The group has leased the land with their savings. Every month each woman saves one or two Euros. Every two weeks the women meet to discuss business. They are supported by an educated local woman who is employed by the project and who assists them in paying visits to local government offices and in their business planning and accounting. Only one and a half percent of the FSUP participants can read and write. On colourful posters on the wall one can read the topics of the latest meetings: emergency and disaster relief, vegetable cultivation, and nutrition counselling. Those who join the FSUP project are obliged to take part in trainings on a regular basis – it is up to each woman to come up with her own business idea and plan.

“With the money, we have purchased a goat and leased some paddy land,” says Rosena about her investment. Just a few steps away from the meeting place one can see it – a field over which jut some branches where some Drongo birds are perched. “From there they hunt for insects,” says Rosena. “I have learned the trick in the training and the yield has clearly increased.” Another course was about selling rice and cattle with profit.

“We have reinvested our first revenues and have now bought a rickshaw and a bull,” she explains.

Her husband Monir is now pulling the rickshaw and is earning a regular income. Only one year later, the investments in a goat and a bull, paddy cultivation and a rickshaw have proven successful and the initial capital is now worth 640 Euros.    

We give money only to women and plan investments with them,” Räder says. “If we give it to men, then women would not be able to take decisions.”

But nevertheless teamwork counts.

The most successful households are those in which women and men work together, something Räder knows from her own field research and from survey results of the first phase of the FSUP project. “Men are important for selling the produce as women are not allowed to go to markets.”

Rosena´s husband returns from the market with his rickshaw. A shopping bag full of things hangs from it as he stops in front of the hut. His wife quickly checks the items -  a pumpkin, three onions, spinach and lentils. And in another bag there is something slimy. “We were never able to afford fish but now we eat fish every day,” says Rosena as she looks at her children.

Rosena and her family are a prime example of the success of the WFP project.    

But Räder also wants to find out why other families continue to struggle despite even with financial support. She strongly rejects the idea that some participants use the free money for other than investment purposes. She also does not accept the view that this project increases dependency and leads to a lack of initiative among participants.

“Projects like FSUP are absolutely necessary for the poorest of the poor as they cannot make it on their own,” says Räder, but she is concerned about the longer-term success of the programme. WFP supports more than one thousand of the women’s groups in organising themselves into ‘apex groups’ representing their various business models, and in applying for further government grants. Furthermore, Räder pursues deeper collaboration with the government.

Basonti, the politician, doesn’t need to worry anymore. She talks about her success in the local Union Parishad and as an entrepreneur. Her husband sits quietly next to her.

Does he envy the success of his wife?

He looks to the side and says that he prefers taking care of the animals to politics. In the end he breathes deeply, it is only a whisper, but you can hear it clearly - “I am proud of her!”