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The CDF had identified and internalized the prime needs of NGOS, specially small and medium ones in the juncture of donors fund saturation for micro credit program. As network and capacity builder, CDF has been searching alternative funding sources for its member NGOs. A proposal for Bank loan to NGOs was submitted to different Banks spelling out a linkage and guarantee approach. After long discussion and review about pros and cons, the new lending approach has been agreed by the biggest government commercial Bank. Thus CDF and Janata Bank have signed a Memorandum of Understanding (MOU) to lend loan fund to NGOS for Microcredit programs. As a result, the final partnership has been built on Tripartite Mechanism of lending from Janata Bank as provider of loan, CDF guarantor and the NGO as recipient of loan for micro credit program operation.

There is serious need of revolving loan fund for small and medium NGO on the demand stream and idle fund in the supply stream. Bank thus both the NGOs and Nationalized commercial Bank (NCB) are not benefited mutually, rather loosing. The micro credit linkage partnership program will enable both bank/specialized financial institutions to overcome their liquidity problem and small /medium NGOs will have acceptance to bank loan to meet up their fund crisis for micro credit operation. The CDF as network organization facilitates by guarantee and technical assistance to build trust between Bank and NGOs. Thus the approach is opening up a new dimension for Micro credit linkage partnership between NGOs and Bank for coverage of get to cover poor and help banks to earn profit out of idle money use. This new mechanism is an innovative lending approach for all concerned by collective efforts of CDF, NGOs and Janata Bank.

CDF has instigated the linkage micro credit program with 26 NGOs throughout the country. Their program performance is excellent. We disbursed under the Linkage Micro credit Program Tk.11million among those NGOs and recovery rate in NGO level is 100% and also 100% repayment rate exists in NGO to Janata Bank level. Most of the Linkage partner NGO is small level Community Base Organization (CBO) has been performing well for a long time in the program operation but in terms of capacity aspect still they have lot of limitations and deficient in the Credit program operation and they have need for capacity building/technical assistance support. CDF as a capacity builder and technical assistance provider has been providing support with price because this is an self dependent income base program not donor supported program. Hence those small and marginal NGOs are unable to afford the cost base capacity building training or technical assistance opportunity for the reason of fund constraint. Thus CDF is seriously looking for alternative support provider from anywhere for its Linkage Micro credit NGOs capacity/technical assistance program. CDF's efforts and lobby to proliferate micro credit program were forward moving during this year, too as the formal banking system increased its interventions in this sector and more and more banks established partnerships with the NGO-MFIs. The pro-poor and pro-farmers policy of Bangladesh Bank and the Government by and large, facilitated Bank-NGO partnership move further in implementing the portfolios with new dimension, e.g. SME financing, Agricultural lending, renewable energy etc.


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