Wednesday, November 28, 2007

Some Post Cyclone Sidr Stories and Follow-up: Will the Real Micro-credit Repayment Plan Stand Up?

Note: on 8 Dec 07, I have updated this post

It's been TWO long weeks since Cyclone Sidr roared ashore in Bangladesh and killing at least 3400+ people, injuring many more, and devastating land, businesses, futures. Many people have documented the profound losses, experiences, reflection, need for massive relief-fundraising now & better coordination of relief and such fundraising, and in the future, extensive reconstruction efforts. Now the United Bangladesh Appeal has launched the Sidr Victims' Compensation fund for survivors.

Speaking of survivors: what about compensation, cancellation of micro-credit debt for Sidr's dead victims, and repayment pressures on struggling suvivors???? More conflicting stories have appeared. At first, the media reported that some NGO staff members had been pressurizing borrowers for interest-loan payment. These borrowers had survived Sidr, but lost their businesses-capital-customers and could not make repayments.

As I wrote before, on Nov 26 the Caretaker government has asked NGOs not to demand loan repayments right now from cyclone survivors. Nonetheless, in a Daily Star article, Bilkis Begum would like her tk 80,000 microcredit debt cancelled because she feels like repayment is at least one year away. Md. Yunus of Grameen Bank explains why such debts cannot be cancelled, but that GB would offer 'interest free loans' tk 10,000 towards rebuilding account holders' houses, more time to pay off their debts and offers of new loans, e.g, more debt.

Then on 27 Nov 07, the Daily Star reported that micro-credit NGOs may have to cancel tk 600cr (millions of taka) loans because of rules that if borrowers died, then their debts must be canceled. According to this article
"In 12 south and south-western districts, some Tk 1,159 crore in loan remains outstanding with 15 lakh people, with 42 microcredit organisations operating in the region." Over 1227+ borrowers have died leaving the NGOs with many debts to cancel. These NGOs included Grameen Bank, BRAC, ASA, organizations affiliated with PKSF, and other smaller organizations.

Other official commented, "Although the microcredit providers are not going to make an announcement of the write-off right now, they might finally write the loans off since the small borrowers lost most of their houses, businesses, and other assets". Other officials indicated that they did not want to announce any more plans because people who could repay their loans would try to have them cancelled, but they had advise their staff to 'suspend' their collection efforts from cyclone affected borrowers for the time being.

This debt cancellations will impact the micro-credit sector, but to what extent will only be seen over time. Critics have noted that many NGOs have used micro-credit operations as money makers among their other activities.

Nonetheless, by all accounts of the devastation in the coastal region, many surviving borrowers may never be able to recover much less with the micro-credit debt burden and pressurization on the survivors' backs.

Finally, although much attention has been given to the coastal survivors, residents of the mid-sections of Bangladesh also spent a scary night among the destructive winds-rains of Cat 3 Sidr in Dhaka, especially poor people in slums. Some staff and students of Nari Jibon continue to give their first person accounts of Cyclone Sidr in the Nari Jibon blog such as Sujan's, Rafiq's, and Taslima's posts. A hat tip to Research officer Sujan, who has continued to blog about relief and some of his photos of a nearby slum were shown on CNN-international this past week. Please check out these posts in English and Bangla! See Rezwan's summary of both english & bangla blog coverage.

I'm also very glad that Shawn has returned to Dhaka. You can read about some of his experiences while on the coast. I hope to hear more after he rests, recovers, and socio-emotionally digests some of his harrowing time on the relief journey.

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