Building community institutions to fight poverty in rural Bangladesh

Challenge

Bangladesh successfully reduced extreme poverty in rural areas from 37.9 percent in 2000 to 21.1 percent in 2010, but rural poverty is still almost three times that in urban areas. New challenges to prosperity have recently emerged: The pace of poverty reduction declined as job creation slowed; regional disparities expanded and the pace of poverty reduction varied across the country; the COVID-19 crisis reversed the trends of growth and progress in development outcomes, and the country’s economic and climate vulnerabilities increased. Shocks such as sudden illness, chronic or poor health, death and disability, and natural disasters threaten to push vulnerable households back into poverty. Women still face severe barriers to sustainably improving their livelihoods. Supporting productive employment opportunities for income generation in the agriculture sector and establishing sustainable community support mechanisms were considered important strategies to address rural poverty, improve resilience in the face of adversity and improve women’s status within households and in society at large.

Approach

The World Bank-supported Nuton Jibon Livelihood Improvement Project (NJLIP) took a five-pronged approach: (1) It mobilized and strengthened community financing institutions that provided technical and financial assistance to beneficiaries to engage in income-generating activities and develop community infrastructure; (2) It established second-tier institutions that supported village-level community institutions and livelihood demands; (3) It supported and strengthened producer groups to increase revenues; (4) It provided nutrition and health awareness campaigns; (5) It supported youth skills development and employment. 

NJLIP adopted a Community-Driven Development (CDD) approach, combining livelihood support, empowerment, access to finance, and community development. Strong institutions building on community mobilization raised the commitment of beneficiaries to sustain what they had built. NJLIP followed the Social Investment Program Project-II which had successfully increased beneficiary incomes, women’s empowerment, youth employment, and food security in Bangladesh. In addition to focusing on the sustainability of community institutions and strengthening second-tier institutions, NJLIP also strengthened partnerships and opportunities for value addition to further enhance beneficiaries’ income. 

Community Resource Person entering data into the Loan Management System. Photo: SDF

Results:

• NJLIP reached 982,248 mostly extreme poor and poor beneficiary households in 5,624 villages with various services and support; 95% of beneficiaries were women.  

• In total 325,525 households were engaged in livelihood enterprises.  Income among beneficiaries exhibited a sharp increase and beneficiaries’ average net income was about 3.5 times higher than in the control group. Compared to the baseline, about 50 percent of beneficiaries achieved at least an income increase of 30 percent.   

• Women’s empowerment and self-management increased, measured by an index which increased to 8.56 points (close to the target of 9). The index reflects amongst others, whether women can make independent decisions, and have an independent income, have their own savings, or can spend a portion of their income at their will.  

• Nutrition and health interventions benefitted 423,861 households. One visible outcome was that the Minimum Dietary Diversity score among children under two in the project area increased by 28 percent compared to the control group. 

• 25,866 youths maintained employment for at least a year.

• 896,074 households—including non-beneficiaries—benefitted from the 5,803 community infrastructure projects, including by getting paid short-term employment (2,444,434 labor days).

Bank Group Contribution
The project obtained $200 million IDA financing. Component 4, Project Management, Monitoring and Learning, was co-financed by the Bangladesh Government with $20 million. 

Partners
The project was implemented by the Social Development Foundation (SDF), an autonomous entity under the Ministry of Finance of the Government of Bangladesh created to contribute to the GoB poverty eradication strategy. SDF had completed implementation of the Social Investment Program Project and showed high readiness for implementation. 

Moving Forward 
Acknowledging the success of NJLIP, a follow-on project, the Resilience, Entrepreneurship and Livelihood Improvement (RELI) project became effective in October 2021. Like the NJLIP, the project will be implemented by SDF, essentially adopting the same CDD approach as its predecessor. Lessons learned incorporated from NJLIP include a strong focus on strengthening the resilience of beneficiaries and on supporting post-crisis economic recovery through rural entrepreneurship. A COVID-19-impact survey in October 2020 found that NJLIP beneficiaries suffered from the consequences of the COVID-19 pandemic and restrictions. Therefore, RELI will provide one-time grants to 255,000 NJLIP beneficiaries to resume and boost their livelihood enterprises. 

Beneficiaries
Ms. Dipali Rani, an inhabitant of Purbo Joysen village of Itakumari Union under Pirgacha Upazilla in Rangpur District, Khulna Region, became a general member of a Nuton Jibon community organization, named Bokul. After the death of her husband, Ms. Rani faced an uncertain future. She wanted to start poultry farming but could not secure a loan without any security. With help of NJLIP, she started a small poultry farm. She took a loan of Tk. 20,000 from the Village Credit Organization (VCO) and purchased 700 chicks. After the successful repayment of her first loan, she took a second-cycle loan of Tk. 30,000 and expanded her poultry farm to 1,100 chicks. At project closing, she sold 800-900 eggs per day and had a net income of Tk. 20,000 to 25,000 per month. During the COVID-19 lockdown, she had to purchase the poultry feeds at higher prices but continued selling eggs at the local market.