The Pledge: Asa, Peasant Politics, and Microfinance in the Development of Bangladesh

The Pledge: Asa, Peasant Politics, and Microfinance in the Development of Bangladesh

The Pledge: Asa, Peasant Politics, and Microfinance in the Development of Bangladesh

The Pledge: Asa, Peasant Politics, and Microfinance in the Development of Bangladesh

Synopsis

ASA of Bangladesh recently topped Forbes Magazine's first ever list of the world's best microfinance banks. This was an extraordinary outcome for an organization that had started life as a revolutionary movement aiming to bring a peasant-led government to the newly-created and desperately poor South Asian nation of Bangladesh. This book tells the story of how ASA's determined but practical-minded founder and leader, Shafiqual Haque Choudhury, steered his organization through the maze of competing ideas about how best to develop poor countries. The book sets Choudhury's achievement in the context of Bangladesh's chaotic but inspiring post-colonial history, and is rich in its understanding and descriptions of how ordinary village and slum dwellers deal with what politicians, international donors, and development experts throw at them. The author's long and intimate knowledge of ASA and of Bangladeshi microfinance makes this one of the best case-studies of a development organization available to students and the general public.

Excerpt

In December 2007, Forbes Magazine published a list of the world’s top 50 microfinance institutions. With the list, Forbes—best known for its annual list of billionaires—turned its focus to the other pole of the world’s income distribution.

A year earlier, Bangladesh’s Grameen Bank had won the Nobel Peace Prize and made microfinance globally famous, but, remarkably, Grameen was down the Forbes list at number 17. Grameen Bank’s signal achievement was to establish the fundamental premise of microfinance: that even the poorest villagers in one of the world’s poorest countries could become reliable bank customers. Access to banks is the key to unleashing economic power, Grameen advocates argued, allowing customers to expand their businesses, start saving, and climb out of poverty.

The Forbes top spot instead went to ASA, one of Grameen’s chief competitors in Bangladesh. The second spot went to Bandhan, an ASA follower based in Kolkata. ASA joins Grameen as another of the new breed of micro-banks, but ASA has pursued operational simplicity and massive scale with a vision unmatched in its clarity and relentlessness. By the end of 2007, ASA reported that they served nearly seven million women, whittled costs down to just 4 taka for each 10,000 taka disbursed in loans, and earned profit at a level that was 60 percent above their costs.

This part of ASA’s story has been broadcast widely, and much can and should be learned from ASA’s management strategies. In many ways, though, the most interesting part of ASA’s story . . .

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