Business & Economic Research Center | Jones College of Business | Middle Tennessee State University

by Steven Sibley (November 7, 2008)

 

Second Village Trip: Part 4

I awaken the next morning, read more of my book, and wait for Kathryn and Zaman to wake up. After an hour, they do, and we move down to the town center for breakfast. Mr. Ahmed tells us that our itinerary for today includes two center meetings, a visit with a recipient of an education loan, and a visit with two women in Grameen's struggling member programme. As breakfast is served, I am surprised to see that my plate has four eggs on it. My comments about taking four eggs for breakfast in America had apparently not gone unnoticed.

After breakfast, we head to the first center meeting. With 547,719 taka of loans outstanding and 283,685 taka in savings, the Dariapur center has 11 groups and 58 members and has existed for approximately 10 years. Most members, however, joined approximately three years ago. Additionally, this center's members participate in more diversified businesses than those in the previous two centers in the Prashadpur area.

Most of the new members have taken loans for purchasing livestock, leasing farmland, and buying "vans" (rickshaw-style bicycles with a flatbed instead of a passenger bench mounted to the back). A woman who joined this center when it first started 10 years ago has taken a 25,000-taka micro-enterprise and a 20,000-taka general loan in order to expand her fertilizer and insecticide business. A six-year member has taken a 25,000-taka loan for her oil business, while a five-year member has taken 6,000 taka for her sweets business. A woman who joined Grameen three years ago has taken a 10,000-taka loan to expand her husband's decorating business.

We interview the woman with the agricultural chemicals business to discover that she took her first 3,000-taka loan to purchase a small cow. With her second 5,000-taka loan, she started a small grocery shop, which she ran out of her house. With a 7,000-taka loan, she leased land on which her husband farmed rice. Not until her fourth loan did she enter the fertilizer business with a 10,000-taka loan. Since then, all of her loans have gone to expand that business to include other agricultural chemicals like insecticides and herbicides. Her current loans require a weekly repayment of 1,125 taka, while her monthly income is 10,000 taka per month during nine months of the year and 5,000 per month during three months. Additionally, she owns a small piece of farmland on which her husband grows rice and vegetables with which to feed the family.

In talking with the owner of the oil business, we learn that her products include mustard oil, soybean oil, petrol, and diesel. When I initially heard that she was in the oil business, I must confess, I never imagined that her product mix was so diversified. She and her husband both work for their oil business, with her selling products from her home and her husband selling it on the road with the van that they own. They currently have 90,000 taka worth of product at their house. Before joining Grameen, she, her husband, and their daughter lived at her father-in-law's house, while her husband worked as a farmer for his father.

The member who runs the sweets shop bakes her products at home, while her husband sells them in the nearby markets. She is able to produce 12 to 15 kilograms of sweets per day, and her husband sells them to grocers for approximately 50 taka per kilogram. Their daily profit is approximately 350 taka, but she bakes well into the night in order to produce such a large quantity of baked goods. Since milk is their largest expense, this member is considering taking a new loan to buy a milk cow. Their son has moved out of their house and works as an oil trader in the nearby town of Naogaon.

The woman who has taken the loan for her husband's decorating business works at home as a tailor, while her husband operates the business. Her first loan was for 5,000 taka, her second was for 7,000 taka, and her third and current loan is for 10,000 taka. While she doesn't operate the decorating business herself, she says that she and her husband jointly decided what they should purchase for the business. We ask her if she has any children. She says that she had a daughter but she died. The matter-of-factness with which she mentions this astonishes me. The death of a child here is obviously a much more common occurrence than in America.

After the conclusion of the center meeting, we make our way through the crowds of Dariapur villagers to briefly visit the homes of some of the Grameen members. First we visit the oil trader's house. Entering the one-room house, we discover that the oil supplies are stored in the bedroom. The smell of petroleum products is overwhelming. Thankfully, she stores the food oils on a separate shelf from the petroleum oils. She shares a kitchen with the member who operates a sweets business, whose house we visit next. She and her husband store their flour and oil in the bedroom, where they also do the mixing. After showing us where the mixing takes place, she shows us the joint kitchen. There is no electricity in this village, so she does her nighttime baking by gaslight. Finally, we visit the home of the member whose husband operates a decorating business. It is a modest one-room house with a sewing machine in the corner. She tells us that she started tailoring before joining Grameen, but her husband had been a day laborer working on someone else's farm.

We mount the motorcycles and quickly proceed to the next village for its center meeting. Upon arrival, Zaman introduces Kathryn and me before we ask questions. Center 41 has 260,000 taka of outstanding loans and a little more than 100,000 taka in savings. With the center having been open for only a year and a half, most members here are leasing land on which their husbands farm rice. Some others have taken loans for livestock. Only two members, both of whom were members of another center before joining this one, are in non-agricultural businesses. One has taken a 25,000-taka loan for her pharmacy, and the other has taken a 16,000-taka general loan and a 20,000-taka micro-enterprise loan for the grocery that her husband operates in the Prashadpur market.

As this is a new center, I decide to ask the new members how much their agricultural output has increased since joining Grameen. For each person who has been a member for only 1.5 years, I ask how much they were able to grow two years ago and how much they are able to grow now. It is perhaps easier to display the information in a chart rather than in narrative:

Member	A	B	C	D	E	F
Loan Amount	10,000	10,000	8,000	10,000	8,000	10,000
2007 Yield	140	100	0	160	40	40
2008 Yield	320	220	80	280	60	100
Net Increase	180	120	80	120	20	60
% Increase	128.6%	120.0%	N/A	75.0%	50.0%	150.0%
Taka Increase	28,800	19,200	12,800	19,200	3,200	9,600
Taka Total	51,200	35,200	12,800	44,800	9,600	16,000

Weights are reported in Mun (4 kg) and price of rice at a conservative estimate of 40 taka/kg. The market price of rice is from 40 to 45 taka per kilogram.

Clearly, members A thru D have been able to improve their families' income through proper loan utilization. However, members E and F have failed to improve their earnings by more than the amount of the loan they have taken. As their total rice production is greater than the amount of the loan, they will likely be able to repay the loans, but they will not be improving their circumstances. In fact, unless they used some of the loan to purchase income-generating livestock of which they failed to tell us, then they will be worsening their condition. This demonstrates that Grameen is not a cure-all for poverty. The members must wisely utilize their loans. Perhaps these women, as with the owner of the agricultural business, will find another trade that better suits their families.

This center also has a member whose son has gotten a Grameen Shikkha scholarship to help fund his studies in class 11 at the college in Naogaon. Her son lives in Naogaon and maintains a 4.63 GPA out of 5. The scholarship pays only 250 taka (~$3.50) per month, but this figure is enough to enable him to continue his studies. "The scholarship pays for his tuition and examination costs," says the woman with great pride. "If he did not get the scholarship, he could not go to school in Naogaon." It stuns me that a monetary amount so small to me can, for someone else, be the difference between dropping out of school and continuing his education.

As the center meeting concludes, we do not have enough time to visit the houses of the members of this center, as we have to travel a relatively far distance to visit a woman who has taken out a Grameen higher education loan for her son. The trip by motorcycle takes us through another market area that is crowded with people. We stop for only a brief moment to visit a sweets store financed by a Grameen loan, and the villagers drop what they are doing and crowd around us. Kathryn and I wave and smile at them, while Mr. Ahmed commands them to move away so that we can leave. We soon arrive in the next village, Inayetpur.

The villagers congregate around us while Mr. Ahmed tries to locate the woman who has taken the education loan for her son. After a brief moment, Rafiq ul Islam and his mother come to greet us on the porch. Rafiq is pursuing a bachelor's degree in accounting from the Naogaon government college, where tuition is free. Admission to government colleges in Bangladesh is as competitive as admission to Ivy League schools in America.

To help quantify the difficulty of gaining admittance, Zaman says, "Five hundred students compete for one seat at Dhaka University." Only 0.2% of applicants are admitted to Dhaka University, so competition for Naogaon must be difficult.

"You must be a very meritorious student," I tell Rafiq.

Rafiq tells us that he has all A's in his major. After obtaining his bachelor's degree, Rafiq says that he plans to pursue his MBA, hopefully at Dhaka University. We ask him what he wants to do after getting his MBA. Like most potential college graduates, he says that he hopes to get a job. He says, "I would like to work for Grameen Bank, so that I can help people like they have helped my mom."

I ask how much he has borrowed for his education. Rafiq is in his first year of college and is borrowing 1,150 taka (~$17.00) per semester to help pay for living expenses while he is in school. His mom is very proud of him and is glad that she can help him with an education loan from Grameen. Her eldest son has already graduated from college financed by a Grameen education loan and is currently teaching. Her daughter got married at 16 years of age. Mr. Ahmed voices disapproval that she "practiced" child marriage, although he says that 16 is better than 14. I take a photograph of Rafiq and his mother before we leave the village to go visit another village where there is a woman who belongs to Grameen's struggling member program.

Through its struggling member program, Grameen Bank gives interest-free loans to beggar women. Unlike the general loan, the struggling member loan has no defined payment plan, so the borrower pays back the principal as she is able. When we arrive in the village, Mr. Ahmed asks where the struggling member is. We discover that she is out in the field with her goat. While we wait for her to return, Zaman speaks to the villagers who have gathered around us.

After conversing with them, Zaman tells us that the straw house behind us belongs to the beggar woman. He says, "This is the struggling member's house. It is on the village's common land." Pointing at another nearby house, Zaman continues, "That house also belongs to a beggar who has taken a struggling member loan."

"In America, most beggars do not have a house that is theirs," I offer. "Many sleep in parks and on the streets. Some have cardboard boxes. It is nice that the village allows them to build a permanent shelter."

Zaman says, "There is a lot of land around here, so a place for a house is not a problem. Most probably, other villagers helped them build their houses."

"It is good that people help take care of them," Kathryn says.

A frail older woman with a mouth full of rotten teeth approaches us. "This is the struggling member," Mr. Ahmed says. He tells her that we are from America and that we are here to study with Grameen Bank. She smiles at us. "Would you like to ask her questions?"

I begin, "How much have you borrowed from Grameen Bank?"

"2000 taka."

"What did you do with the loan?"

"I bought a goat, so that I can sell the milk."

"How much do you earn from the milk?"

"I drink some milk. I sell the extra in the market for 13 to 17 taka per day."

"Is that enough for you to stop begging?"

"No. I still have to beg for rice. I get two handfuls of rice each day from begging."

"What do you do with the money that you make from selling the milk?"

"I save 20 taka each week to pay back my loan to Grameen. I use the rest to buy vegetables to eat."

"How much time do you spend begging and taking care of the goat?"

"I spend a lot of time taking care of the goat. It is the only thing I have to take care of, and I like tending to it. I don't have to spend much time begging. The villagers take care of me."

Kathryn asks, "How did you become a beggar?"

The woman responds, "My husband died 10 years ago. He worked as a day laborer. He did not make enough money to save any. He did not have any assets when he died. Our house was rented, so I could not pay for it without him. My son has a wife and family now, and he also works as a day laborer, so he cannot take care of me."

Tears begin to well up in my eyes as this woman tells us her story. This woman is truly a victim of circumstance. The death of her husband left her completely assetless, with no option but to beg. She was able to build a house because of the kindness of her village. With the loan from Grameen she was able to buy a goat—a goat that serves not only as a source of income, but as something for her to care for—something that gives a sense of purpose to her day.

While we talk to the woman, villagers (especially young children) have begun to crowd around us. As the woman finishes, we thank her for sharing her story and offer our sympathy as best we can without understanding her language. I ask her if it is okay to take her picture. She says it is okay. Upon seeing the camera, the children get excited. After I take the struggling member's picture, the children begin pointing to themselves, as if to say, "Me next! Me next!"

I oblige. Kathryn asks me to take a picture of her with the children. I show the children the picture that I have taken, and each of them is ecstatic as they point to themselves on the digital cameras display. Kathryn takes a picture of me with the children and then some individual shots. In particular, she tries to photograph a shy little girl with incredibly deep eyes and a Batman shirt. After minutes of hiding behind other children, the girl concedes, and Kathryn snaps a photograph of the little girl. Upon seeing herself in the camera's display, the girl giggles. As Kathryn puts up her camera, Mr. Ahmed says, "Let's move!"

Back at the town center, Ms. Barui and the town councilman tell us that they have arranged a big meal for us. They emphasize that they are treating us and that we will not have to pay for the feast. Zaman tells us that we should pack our things to get ready to leave after lunch. Kathryn and I return to our rooms.

After packing, Kathryn and I talk about how sad we are to leave this village that has so wholeheartedly welcomed us. As we sit on the balcony outside of our rooms, the town councilman comes up to get his photograph taken with us. I shake his hand and thank him as best I can, "Donobod." Motioning with my hands to indicate all that is around us, "Kub bahloh. Kub shundor." Thank you. Very nice. Very beautiful.

As we sit in the main office of the town center, Alim serves us a huge lunch of chicken, fish, rice, potatoes, green beans, and lentils. It is much more food than we can eat. We talk about how much we have learned about Grameen Bank and thank them profusely for their generosity and hospitality. Wahab's car arrives for us. We take photos in front of the town center and the branch office. Ms. Barui presents us with our bill for food and electricity and tells us that she and the union manager paid for 1,000 taka of the 1,700 taka worth of fuel we used for electricity. We say our goodbyes and again thank them for everything they have done for us.

Munjor drives us back to the Naogaon bus stop. We buy our tickets and board the business-class bus. The 190 km (118 miles) bus ride back to Dhaka takes well over seven hours. We stop only three times for a total of one hour, so we average only 20 miles per hour while driving. Traffic crawls to a standstill for two hours outside of Dhaka. Getting off the bus, Zaman hails two rickshaws for us. Our poor rickshaw driver pedals almost four kilometers, hauling Kathryn, me, and our 40 pounds of luggage. Arriving at the hotel the driver is drenched in sweat and breathing heavily. Zaman tells us to pay him only 50 taka. I slip him an extra 100 taka for his effort; although his struggle should earn him more than $2.00. We thank Zaman and pay him 4,200 taka (~$60) for three days of his service. Kathryn and I go to our rooms, shower, and meet in the restaurant for dinner. After a light dinner, I go to my room and bask in the cool breeze of the air conditioner.