Microfinance is essential for marginal entrepreneurs in villages as commercial banks do not have branches in remote parts of the country. There are different initiatives to arrange microfinance in a humane way. Citibank's Microentrepreneurship Awards Program (CMA) is one such initiative.

Recently, COAST Trust won the 14th CMA in the ‘creative microfinance’ category for its many initiatives in coastal and remote areas. The Independent interviewed Rezaul Karim Chowdhury, executive director of COAST Trust, on the organisation’s activities, microfinance system and vision. Here are excerpts from the conversation:

The Independent: Do tell us about the CMA.

Rezaul Karim Chowdhury: Citibank, a subsidiary of Citigroup, has been presenting awards to micro-credit institutions for the past 20 years. The awards programme aims to develop the micro-credit system further. This year, 300 entrepreneurs and 50 micro-credit institutions competed in the awards across different categories. COAST Trust received the award in the ‘creative microfinance’ category for 2018.

The Independent: Where does COAST Trust’s creativity lie?

Rezaul Karim Chowdhury: I think the traditional concept of micro-credit is to provide loan to improvised borrowers but it has to be changed. We have to provide technical assistance that is specific to the sector in which they plan to spend the funds. We may have to visit the borrower's home to offer business support and advice. A single business may not be able to stand on its own. That is why we try to develop the business as a part of the overall value chain—so that it has backward and forward linkages. This helps the business survive and our creativity lies here.

Moreover, we work in coastal areas, where storms are common and people worry about the uncertainties associated with tidal erosion. The people who live here are unable to think of new initiatives. Unless we ensure special arrangements to meet their particular needs, activities like microfinance may not survive. That's what we are aiming to achieve.   

COAST Trust reinvests the profits of micro-credit programmes at the local level. For instance, we have a special fund allocated to medical and legal assistance in cases of natural disaster and gender-based violence. COAST does this without any outside help. Also, strengthening our member organisations and holding them accountable are essential parts of our micro-credit programme. We think they complement each other.     

The Independent: How do you view the current state of microfinance?

Rezaul Karim Chowdhury: There is a misconception about microfinance. It is not just a money-making activity. Enhancing the social status of the poor borrower is an important factor. We provide microfinance through a rights-based approach. Instead of merely serving members, we make them aware of their rights. That enables them to raise their voice and get the rights they deserve. We have followed this approach since 1995.

The main idea is that we don't do development work without providing any training. A business or a small enterprise is not just about selling goods and calculating profits. It is also important to focus on the quality development of the product, the future of the business or enterprise, and the ability to factor in current challenges.

The Independent: Where would you like to see microfinance activities in future?

Rezaul Karim Chowdhury: COAST Trust is a people's association. The organisation is now working on a mechanism that can make it accountable to the people involved at all levels, without any need for individual managers.