Sonali Bank


	Rural lending continues to be one of the core lending programs of Sonali Bank Limited. Sonali Bank Limited stepped into rural lending in 1973. Any comparative study would clearly depict Sonali Bank's supremacy in the Rural Finance Market over other private or public sector commercial banks in Bangladesh. All the on-going rural and micro finance outlets of Sonali Bank Limited aim at increasing agricultural output, promote agro-based Small and Micro Enterprises (SMEs), facilitate agro-based support services, create and sustain employment opportunities through linking the rural and urban poor to the various Income Generating Activitis (IGAs) and reduce poverty. Sonali Bank's Rural / Microcredit has been channeled through a wide network of 1073 rural branches.

	Broadly, Sonali Bank's rural and mircocredits are of following categories:

	Program Credit: These outfits aim at addressing the credit need of the mainstream agriculture ( viz. cereal crops, tubers, pulses, oilseeds, etc.) and agro-sub-sectors (viz. dairy, poultry, fisheries, hatchery, etc.) as well as agro-offshoots ranging from medium term as in small and medium agro-enterprises to long term as in agro-based industries. The programs include:

	Special Agricultural Credit Program (credit to subsistence and marginal farmers as well as share-croppers for raising seasonal crops )
	Financing the poor and subsistence farmers grouped under formal cooperative societies.
	Finance to agro-based Small and Micro Enterprises (SMEs) under a scheme named Special Investment Scheme.
	Finance to Agrobased Industries.
	Finance to various farm and off-farm micro enterprises.
	Credit to agro-support sectors (viz. various irrigation equipments, agricultural implements, tractors, powertillers etc).

	Supervised Credit: These programs predominantly aim at reducing the level of poverty and generate self-employment opportunities with the core objective of improving the quality of life.

	Linkage Credit: These credit outlets have been the collaborative efforts and eventually aim at reaching the targeted hardcore rural and urban poor, socially as well as technically mobilized and prepared by Partner Organizations (NGOs and various public bodies).

	In all the cases, Sonali Bank's microcredits aim at socio-economic development and empowerment of the poor with special focus on disadvantaged/destitute women. Sonali Bank LImited has, interalia, three microcredit products that exclusively target the disadvantaged rural and urban women, namely :
	Integrated Rural Women Development Programme (IRWDP). Credit for Urban Women Micro Enterprise Development Programme (CUMED) NGO linkage programme for assisting the women in city slums.
	Linkage with Microfinance - NGOs: Bangladesh has been the world's capital of Microfinance with more than 1,000 Micro Finance Institutions (MFls) concentrating to this sector. Sonali Bank Limited with a mission of building a sustainable business relationship with the MFls has marketed this new product in 1997 and leveraged so far a total sum of Tk. 500 Million (=US$ 10 million approximately) to a number of MFIs. Sonali Bank's NGO-linkage program has been regarded as the single largest linkage outfit in the world.


	Rural/Microcredit clients are usually given incentives for on-time repayments by offering rebate on interest payable.

Nature of Loan

Interest Rates
( Floating )

Mainstream Agriculture

a) Crop Loan

8.00%

b) Other agricultural loan

8.00%

c) Thrust sector (viz. Dairy, Poultry, Fisheries etc)

8.00%

Microcredit

Poverty alleviation has appeared to be the focal point of all policy formulation and development issues of the nation. As such, it has been globally accepted as an effective strategy for poverty alleviation in one hand and generating employment opportunities on the other.
In commitment to reduce poverty in urban, semi-urban and rural areas, Sonali Bank has started functioning in Micro Credit through a full pledged micro credit division in its Head Office in the year 2003. Presently, 32 projects/programmes are being run under the control and supervision of this Division. Among all others programmes, Bank-NGO Linkage program and Credit for Urban Women Micro Enterprise Development (CUMED) in Dhaka City, Goat rearing, Lamb rearing, Fruit, Herbal, Medicinal and Nursery Project, Micro- enterprise program- ‘Unmesh’ in Moulavibazar district, MSFSCIP in Kurigram district, Loan for Disable Persons etc. deserve special mention for channelising the financial resources into the various potential avenues of microfinance.
Sonali Bank jointly with Swanirvar Bangladesh,BRDB and ADB has been providing huge investible funds into the different Upazillas within the country. 152 Upazillas have been covered by the Rural Livelihood Programme (RLP). Further, this Division has provided taka 179.09 crore to 68 NGO’s under its widely accepted Bank-NGO Linkage Programme on whole sale basis and whose recovery rate is 100%. Specially, for the disable people Disable Loan Programme has been undertaken to bring the disable section of the people under the micro credit facilities. The Goat Rearing Programme undertaken by this Division has been running with a remarkable impact in reducing the rate of massive- scale rural poverty. Sonali Bank has already disbursed 46.47 crore upto 31 December, 2007.
Further, in order to create employment opportunities and to generate income of the rural people two loan schemes under the name and style " Rural Small Farming Loans scheme " and "Rural Small business loan" scheme have been introduced in-2004 . In both the programs there is a provision of collateral free loan upto Tk. 50,000/- . In 2006 a new program has been introduced named ‘ Daridra Bimochane Sahayta Karmasuchi’’for the extremely ‘Monga’ affected rural people. Moreover, in 2007 a special program has been introduced for SIDR affected 12 areas in which there is a provision of collateral free loan upto TK.20,000/-.
Upto December 2007, Tk. 3299.47 crore has been disbursed under various project/ programs of this Division where as this disbursement figure was Tk. 3056.63 crore upto December 2006. The key features of some running projects/Programs of Micro Credits given as follows:-

SL.	Project/Programs	Target group		Loan size in Tk.	Rate of Interest
1	Swanirvar Credit Program	Poor & Landless people		1,000-15,000	9%
2	Crop Godown Credit Project	Small & Medium Farmers		Highest 10,000	9%
3	Sonai Bank -BARD, Comilla Priogik Gabesana Rin Prokalpa	Bittahin rural male & female		Highest 10,000	9%
4	Sonai Bank- RDA, Bogra Priogik Gabesana Rin Prokalpa	Bittahin rural male & female		Highest 10,000	9%
5	Marginal and Small Farms System Crop Intensification program(MSFSCIP)	Marginal, Poor & Small Farmers		Highest 10,000	9%
6	Herbal & Forestry, Medicinal Plant & Nursery Development Credit program	Bittahin, Poor Energetic Youth		5000-25000	9%
7	Grameen Khudra Babsa Rin Karmasuchi	Poor People		Highest 50,000	10%
8	Daridra Bimochane Sahayta Rin Karmasuchi	Hard Core Poor People		5,000-10,000	8%
9	Loans to Disable People	Disabled People		25,000-50,000	10%
10	Unmesh Credit Program	Micro Entrepreneurs		50,000-2,00000	9%
11	Goat Rearing Credit Program	Small &Medium Entrepreneurs		Highest 50,000	8%
12	Credit for Urban Women Micro Enterprise Development (CUMED)	Urban Women Entrepreneurs		Highest 5,00,000	10%
13	Bank-NGO linkage Credit Program	Poor People		Highest 5000-50,000 (Loan Wholesaling to NGOs)	11%
14	Khudra Khamar Rin Karmasuchi	Small Entrepreneurs	Highest 50,000		9%
15	Salt Production Credit Program	Actual Salt Producer	5,000-12,500		9%
16	Individual Irrigation / Agriculcural Equipment Credit Program	Small, Marginal & Medium Farmers	10000-165000		9%
17	BRDB Crop Credit Program	Small, Marginal & Medium Farmers	8,000-15000		8%
18	BRDB Integrated Rural Development Program	Co operative Poor Male & Female Member	1,500-20,000		8%
19	BRDB Rural Livelihood Program	Co operative Poor Male & Female Member	5,000-20,000		6.25%
20	BRDB -Shrimp Culture Credit Program	Small, Marginal & Medium Farmers	2333-28000		8%
21	Special Loan for SIDR affected Area	SIDR affected People	Highest 20,000		8%