SafeSave
in 2004
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2004 was a good
year for SafeSave and its clients. Active client numbers
(in both Dhaka and the rural experiment) continued to climb. There
was a good volume of both lending and repaying. Monthly interest
and fee income hit new records. A new branch, Millat, took its first
clients in January (see below 'The seventh branch'). For the first
time, SafeSave was fully profitable for the year.
In December
2004 SafeSave had seven branches serving the Dhaka slums
- though one closed at year end (see below - slum demolition in
Kalyanpur). There is staff of 82, headed by Director Nipun
Sangma and General Manager Hossin
Islam Ripon and all work is overseen by our Technical Adviser,
Mark Staehle. Total active
client accounts number about 10,000. For financial results please
see that section.
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Floods
have receded
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From
early July 2004 serious flooding hit Bangladesh, in probably the most
damaging flood since 1998, when microfinance in Bangladesh was badly
affected. By July 24th the flood waters had reached the outer slums
in the capital, Dhaka, where most of SafeSave's work is located,
and occupations and incomes were being damaged. On July 25th our staff
reported that out of 1,350 clients served by our Beri Band branch,
the homes of 885 were under water. But by August 1st the water was
receding fast, and by mid August had fallen to normal levels - though
leaving much devastation in its wake.
Then in mid September more heavy rain caused many parts of Dhaka to
flood again. Happily, the water soon receded, without leaving too
much damage.
In 1998, many members of group-based microfinance providers found
the compulsory weekly repayment schedule difficult. SafeSave
has no such rule, and believes that its more flexible services allow
its clients to cope better with flooding. |
Slum
demolition in Kalyanpur
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On
21st and 22nd December 2003, the Kalyanpur slum, served by our Kalyanpur
branch, was suddenly cleared by bulldozer. See the notes
on slum clearance under 'History'. On this occasion, though there
had been fears of mass clearance in Kalyanpur, no-one expected such
sudden and unannounced action. The two or three thousand households
either had their homes smashed, or just managed to dismantle them
in time. The SafeSave branch office is in a secure building,
and we report with pride that our staff worked non-stop to release
savings to clients who needed to withdraw them. SafeSave
will undoubtedly suffer some loan losses, since many of the net
borrowers have scattered and we may not be able to trace them. Some
households are still living rough on the streets, some have moved
in with relatives in other slums, or re-erected their shacks in
other slums, or have gone back to the villages. At first a court
case made some of them hopeful that the slum could be re-occupied,
but that hope has faded. It now looks as though SafeSave
will have to close the branch soon. Already many accounts have been
closed and the savings (with interest) returned to client who have
moved away. All but two staff have already been transferred to other
branches, including the two newest (Kurmitola and Millat).
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The
seventh branch
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In January 2004
SafeSave opened its seventh urban branch, in Millat Slum, in the
Mirpur area, not far from the fourth and sixth branches (Bauniabad
and Kurmitola). Like Kurmitola, it uses the Sixth Product and Palm
Pilot technology. In June 2004 it is staffed by Branch Manager Sankar,
and seven Collectors. They enrolled their first clients on January
4th 2004.By the end of June they had 743 clients who had saved about
350,000 taka (about $5,800) and borrowed about 500,000 taka ($8,300).
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Changes
to Product 2, 3 and 4
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From August
1st 2003 'Product 2' - our main product, offered by the three oldest
branches, and serving about 3,500 clients - was radically modified.
The somewhat clumsy 'five year savings plan' was eliminated in favour
of a simple earn-interest-as-you-go system for savers. The relationship
of loans to savings was also altered, to provide borrowers with
partial access to savings. This has the effect of making Product
Two much more like our latest Product, Product Six, and this is
line with current policy on product development.
A set of changes for Product 3, used by about 1,500 clients in the
Geneva Branch, has also been completed. The link between long-term
savings and loans was changed so that clients no longer have to
maintain a long-term savings account in order to access loans. Instead,
their combined savings (current and long-term) must now equal or
exceed one-third of their loan balance. This brings P3 closer to
P6.
Similarly, the rules of Product 4, offered in the Bauniabad Branch
to about 1,800 clients, was also altered to make it more like Product
Six. In this case, we did away with the 'contract savings' facility
- which had not proved popular - again in favour of a simple earn-interest-as-you-go
system for savers. We also increased the access to loans.
For the new detailed rules of Products Two, Three, Four, and Six
see the section on Products.
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The
SDC Technical Assistance funding
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In May 2003
Mark Staehle (see the 'people'
section) won a contract from the Swiss Agency for Development and
Cooperation (SDC, official
Swiss ODA) to supply technical assistance to SafeSave for
12 months (now renewed to 24). This will allow SafeSave to
continue to develop technically at a rapid pace.
The Technical Adviser's latest report (for the period up to mid
2004) can be read on the 'publications' page, or by clicking here.
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The year 2003 audit
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| The
audit for the year 2003 was conducted by Acnabin
and Co and was unqualified. Copies of the report can be had by
emailing the General Manager at ripon@safesave.org.
The 2004 audit is planned for first quarter 2005. |
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