Incorporating Microfinance Institutions (MFIs) to Enhance Food Security for Poor Women Vulnerable to...

Incorporating Microfinance Institutions (MFIs) to

Enhance Food Security for Poor Women Vulnerable to

Extreme Climate Hazards in Rural Coastal Areas in

Bangladesh

Gulsan Ara Parvin, Reazul Ahsan, Hashan Ali, and Kazi Farzana Shumi

Social, economic, and political context for women in Bangladesh makes them more vulnerable to

climate change and food security. Climate change has serious impact on food insecurity. However,

FAO emphasized that food security depends more on socio-economic condition than agro-climatic

ones. To improve the socio-economic condition of the poor women thousands of Microfinance

Institutions (MFIs) are working in Bangladesh and it is expected that there are numerous

opportunities for strategic collaboration allowing Microfinance Institutions (MFIs) and climate

change adaptation, disaster management, and food security of poor. Through, empirical research in

the south-western coastal area of Bangladesh this paper reveal that relatively poor understanding on

climate change coupled with several other coastal issues (salinity, sea level rise, inundation, cyclones

etc.) make rural livelihood a challenge, particularly for women. A number of MFIs are trying to

create alternative employment opportunities to enhance food security of women. But study reveals

that majority of the poor women failed to induce any improvement in their food security after being

member of MFIs. By identifying the problems and expectations related to present forms of MFIs this

study explores the expected model of MFIs, which would ensure food security for the rural poor

women.

KEY WORDS: social vulnerability and vulnerable populations, crisis management, disaster recovery

Introduction

Changing climate not only has a direct impact on natural systems but it also

affects the managed or human system by affecting livelihood patterns and social

structure. Some of the impacts on natural systems have been clearly observed

over the last 100 years, whilst the impacts on the managed system are only now

becoming understood. The impacts on the managed system are the outcome of

the cumulative consequences on natural systems on which the managed system is

solely dependent (Ahsan, Karuppannan, & Kellett, 2011). Climate change

phenomena such as changes in average temperature and increased precipitation

Risk, Hazards & Crisis in Public Policy, Vol. 5, No. 1, 2014

59

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Published by Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford, OX4 2DQ.

have changed the fresh water supply and natural dryland ecosystem. For

example, the sub-Sahara dryland ecosystem is home for two billion people who

are dependent on that ecosystem and who experience relatively low human well-

being and development indicators. The whole ecosystem provides 8 percent of

the renewable fresh water supply for one-third of the global population (IPCC,

2007). Due to high precipitation and temperature, the dryland ecosystem is failing

to provide services like food and water for humans and livestock, irrigation and

sanitation thus changing the livelihoods of the community (Renaud, Bogardi, Dun,

& Warner, 2007).

Climate change impacts on natural systems have a significant effect on food

production and create food crises in different parts of the world: the sub-Sahara

dryland ecosystem is one of the examples. However, the poor who are already

vulnerable and food insecure are the prime victims of extreme climate events

(FAO, 2008). Among the poor, 70 percent are women: It is recognized that women

are more vulnerable to the effects of climate change as their lives and livelihoods

are dependent on nature (WEDO, 2008). Moreover, two-thirds of the female labor

force in developing countries are engaged in agricultural work and are facing

losses of harvest and income with food becoming more inaccessible (UN Women

Watch, 2009; UNDP, 2009). This is due to the changing climate affecting the fresh

water supply, seasonal variations affecting agricultural yield and food sources

becoming unpredictable and scarce (Gregory, Ingram, & Brklacich, 2005). In this

research, scarcity and unpredictable supply of food and limited access to get or

buy food are addressed as “food security”, which needs to be incorporated within

the key roles of microfinance institutions (MFIs), especially in Bangladesh.

In the case of Bangladesh, half of the population is women of whom 80

percent live in rural areas and are dependent on the agricultural sector for their

livelihoods. Not only are they poor, but also they are highly vulnerable to climate

change impacts due to their dependency on natural systems (WEDO, 2008).

Although data related to the impact of climate change on poor women are not

adequately available, this has already been stated. Moreover, it is also claimed

that the social, economic, and political context for women in Bangladesh makes

them more vulnerable to climate change and food accessibility (FAO, 2008; World

Bank, 2011). Furthermore, the FAO (2003) emphasized that food security depends

more on socio-economic conditions than on agro-climatic ones, and on access to

food rather than production or physical availability of food. Usually are as

hungry as they are poor (Sen, 1999). Therefore, to ensure access to food for rural

poor women, the foremost requirement is to improve their socio-economic

conditions and thus to enhance their food security.

To improve the socio-economic conditions of rural poor women, thousands of

MFIs are working in Bangladesh. Furthermore, Bangladesh has made its

distinctive niche in the world for being the pioneer in the innovation of

microfinance systems for the poor. Microfinance is defined as the delivery of

small loans, savings, insurance, and other financial services to the poor, especially

to rural poor women so that they can generate income opportunities, build an

asset base, stabilize consumption and protect themselves against risk (Hammill,

60 Risk, Hazards & Crisis in Public Policy, 5:1

Matthew, & McCarter, 2008). It is claimed that microfinance can support

economic and social rejuvenation of the poor by providing finance for rebuilding

livelihoods, by strengthening community bonds and by protecting the poorest

from income shortfalls (Poston, 2010). Besides microfinance and its success at the

grassroots level of poverty, Bangladesh and its coastal areas also receive

significant international focus and attention from researchers and environmen-

talists. Almost every year, coastal areas in Bangladesh are affected by severe

climate events such as storm surges, floods and cyclones, and these disasters not

only take lives but also affect the livelihoods of coastal communities. Changing

livelihoods always leads members of these communities to poverty and social

degradation, while the core components of MFIs are to reduce poverty and

ensure social empowerment. Therefore, there are numerous opportunities for

strategic collaboration allowing MFIs to support climate change victims in

adapting to changing livelihoods. By concentrating on their core components,

MFIs can support disaster management and food security of the poor for the

ultimate benefit of vulnerable communities (Mathison, 2003).

However, there has not yet been much research or practical efforts to explore

how the core components of MFIs can be an adaptive tool for the climate

vulnerable especially in coastal communities in Bangladesh.

Taking into consideration the impacts of climate change on agriculture and

food security especially for rural poor women and the efforts of MFIs at the

grassroots level, this study urges that steps be taken and research conducted to

incorporate MFIs. This study then intends to explore the expected model of MFIs,

which would ensure food security for rural poor women. It is expected that this

study would help development workers to realize the nature and extent of the

problems and thus facilitate the undertaking of effective policies and actions.

Through empirical studies among the beneficiaries of MFIs in south-western

coastal areas of Bangladesh, this study aims to investigate the impact of climate

change on the livelihoods and food security of rural poor women. To assess the

impact, it addresses the changes in food availability, consumption patterns and

women’s daily labor and lifestyle to ensure household food security. It also

intends to explore how MFIs can be supported to enhance food security of rural

poor women in the context of climate change.

Methodological Approach

For coastal rural communities in Bangladesh who are already at the edge of

poverty, climate change adds further pressure. Agricultural production is

critically dependent on local temperature and precipitation; therefore, any change

requires farmers to change their traditional practices. Farmers not only in

Bangladesh but also in everywhere are facing this challenge. For a few, changing

livelihoods due to climate change might be beneficial but, for many farmers, it is

a question of survival (IFPRI, 2010).

The depth and extent of the problems related to climate change and the food

security of poor women have been conceptualized through an intensive literature

Parvin et al.: Incorporating MFIs to Enhance Food Security for Poor Women 61

review and a preliminary field investigation. After conceptualization of the

problem, Horikhali, Soladana, and Boyarjhapa villages of Paikgacha thana

(sub-district) of Khulna district have been selected for this study. According to

the Thana Nirbahi Officer (TNO) (the executive officer of the sub-district), these

are the poorest villages of Paikgacha thana and the lives and livelihood of the

poor of these villages are highly vulnerable to climate change.

To assess the impact of climate change and the role of MFIs in enhancing

women’s food security, it was important that responses be received from women

who have been members of MFIs for at least a few years. Therefore, a sample of

120 female members of MFIs was finally determined after knowing the total

number of women who have been members of different MFIs for at least 3 years.

In determining the sample size, efforts were made so that it would be statistically

sound and representative of the community. An average 32 percent of the

members of MFIs were randomly selected for a household questionnaire survey.

The sample size was distributed as shown on Table 1.

During the field investigation from January to February 2012, it was estimated

that six MFIs (all non-governmental organizations [NGOs]) were operating

microfinance programs in these three villages. All these MFIs were investigated

and interviewed for data collection. In addition to the questionnaire survey and

interviews, four focus group discussions (FGDs) were conducted (one in each

studied village and one in the centre of Paikgacha thana). Some 20 persons

participated in each gathering. Participatory rapid rural appraisal (PRRA)

methods were applied during the focus group discussions. Information was

collected through the questionnaire survey and focus group discussions on the

socio-economic realities of MFI clients, the nature and type of MFI support, the

contribution of MFI support to climate change impact and food security, and the

problems and expectations related to MFIs. Data from the questionnaire survey

were verified using information collected from the focus group discussions: no

significant variations were noted.

Site Analysis

The study area is located in the south-western coastal area of Bangladesh.

Due to the presence of both a World Heritage Site and “ecologically critical

Table 1. Sample (Female Members of MFIs) Selected From Different Villages

Name of Villages

Total Number ofHouseholds inthe Village

Number ofHouseholds

Havinga Member of MFI

% HouseholdsHaving MFIMemberSurveyed

Number ofHouseholdsSurveyed

(Sample Size)

Horikhali 74 62 50% 31Soladana 172 146 30% 44Boyarjhapa 320 288 16% 45Total/average % 566 496 32% 120

Source: Field survey January to February 2012.


areas” such as the Sundarbans, the world’s largest mangrove ecosystem, this

south-western coastal area has grabbed the attention of environmentalists

(Agrawala, Ota, Ahmed, Smith, & van Aalst, 2003; Islam, 2008; MoWR, 2006).

However, these areas are lagging behind in socio-economic development and

are vulnerable to different disasters, environmental degradation and the global

climate change process. The majority of these coastal people are low income

agricultural workers, and their lives and livelihoods are vulnerable to climate

change (MoWR, 2006). In addition to the impact on agriculture, with increasing

climate variability, salinisation of drinking water sources is becoming a major

problem (WEDO, 2008) in the south-western coastal area of Bangladesh. Due

to climate change, frequent natural disasters (e.g., Cyclone Sidr in 2007 and

Cyclone Aila in 2009) and salinity intrusions have induced severe hardship in

these people’s lives. People are struggling to ensure food security. At the

same time, they are causing harm to the ecosystem of the Sundarbans

(Mamunur, 2004). Therefore, it is necessary to address the lives and livelihood

of these communities to enhance their food security in the context of climate

change.

Of about 212 small villages of Paikgacha thana, three villages named

Horikhali, Soladana, and Boyarjhapa were selected as the study area for this

research. Paikgacha thana is located in the central part of Khulna district and is

about 65 km from Khulna city centre. These villages are located in the south-

western coastal area of Bangladesh. The Bay of Bengal and the Sundarbans which

are ecologically one of the most significant areas of Bangladesh are located

approximately 6–10 km from these villages. From being located in close proximity

to the coastal area, these villages as well as the Thana (a Thana is a local

government administrative area, usually a police station jurisdiction) are forecast

as being highly vulnerable to climate change impact. In addition to the

geographical conditions, the socio-economic status has made the villagers

vulnerable to climate change as shown on Table 2.

Table 2 reveals that the socio-economic conditions of the respondents are very

poor. They live in temporary houses made with mud and bamboo. Rainwater is

the prime source of their drinking water and they use either hanging or pit

latrines. Family members of the selected households are either illiterate or have

passed Grade V. The livelihoods of about 85 percent of the population are related

to fishing and shrimp culture or to working as day laborers, while most are either

landless or have less than 0.5 acre of land (which is defined as poor according to

the MFI definition). About 10 percent of the population depends on the

Sundarbans and the Bay of Bengal for their livelihood. A small percentage of

people are engaged in van or rickshaw pulling, and working as day laborers in

nearby towns. Estimating the exact amount of average monthly family income of

these rural poor is difficult, since they are mostly daily paid laborers and their

working days vary in different months. Most of the families earn about Tk. 5,000–

7,000 (US$60–85) per month.

Below are maps and other relevant information, which provide a brief

introduction to the studied villages (Figures 1–4).


Horikhali village is about 7 km away from Paikgacha Thana and located at

the western part of the thana close to the river, Mora Bharad Gang. It

accommodates about 350 people in about 74 households. About one-quarter of

the households in this village belong to the Hindu religion.

Soladana village is located mid-way between the study’s other two villages

and is on the southern part of the rivers, Mora Bharad Gang and Shibshah. Rivers

and canals surround this village. A canal named Vaiyer Khal separates this

village from Horikhali. Another canal named Khalia also passes by another side

of the village. All of these canals are under the control of the elites and villages

leaders. Therefore, local people and the poor have almost no access to the canals

which are one of the prime sources of fishing. There are about 172 households in

Soladana village that accommodate 1,065 people. The majority of these house-

holds belong to the Hindu religion.

Table 2. Socio-Economic Conditions of the Households Selected for the Questionnaire Survey

Socio-Economic Parameter Percentage of Survey Sample (%)

OccupationFishing 51Business 6Van/rickshaw pulling 9Day labor 34

Income level (per month in Taka [Tk.])Tk. 1,500–3,000 15Tk. 3,001–5,000 34Tk. 5,001–7,000 40Tk. 7,001–10,000 10Tk. 10,000þ 1

EducationIlliterate 52Grades I–V 36Grades VI–X 8Grades XI–XII 4

Housing conditionsTemporary structure (made of bamboo, mud, straw, wood) 68Semi-permanent structure (made of bamboo, brick, tin) 32

Source of drinking waterPond 7Tube well 22Rain water 71

Toilet conditionsHanging latrine (unsanitary) 55Pit latrine (water-sealed) 45

Family size1–3 134–6 657–10 2010þ 2

Source: Field survey January to February 2012.Note: Percentage may not be 100 percent due to multiple responses: US$1¼Tk. 82approximately as per value in May 2012.


Boyerjhapa village is the Union headquarters and has the role of the main

marketplace for the local rural economy. Boyarjhapa village is l developed

linearly beside the river, Mora Bharad Gang. Besides the Soladana bazaar, there

are some Adarsha Grams. Boyarjhapa village is, in fact, one of these Adarsha Grams.

Adarsha Grams mean ideal villages for the poor landless that have been developed

by the Government of Bangladesh. Boyarjhapa village is about 9 km away from

Paikgacha Thana and located on the southern side of the Soladana village. This

village is also beside the Bashtala Khal (canals), which is 5 km long towards the

Chater Khal (canals) to the river, Shibshah. About 1,900 people live in about 320

households in Boyarjhapa village. This village is dominated by the Muslim

community.

Figure 1. Paikgacha Thana in Khulna District.Source: http://www.banglapedia.org/.


http://www.banglapedia.org/

Role of MFIs in the Study Areas

Name of MFIs

Microfinance is defined as the delivery of small loans, savings, insurance, and

other financial services to the poor so that they can generate income opportu-

nities, build an asset base, stabilize consumption and protect themselves against

risk (Hammill et al., 2008). Although there can be different types of MFIs, in

Bangladesh, NGOs are the primary providers of microfinance to the poor. It is

estimated that there are more than 1,200 certified MFIs in Bangladesh with over

13 million clients (CDF 2002, cited in Agrawala & Maelis, 2010). These MFIs are

working across most of Bangladesh addressing the needs of vulnerable and

disadvantaged communities. Furthermore, it is estimated that more than 400

NGOs are working in coastal areas. However, there is no estimation of the

number of MFIs addressing climate change and socio-economic vulnerabilities of

the poor.

Figure 2. Horikhali Village in Paikgacha Thana.


The field investigation found that there are six noticeable NGOs operating

their microfinance programs in Horikhali, Boyerjhapa, and Soladana villages of

Paikgacha thana. These are the Association of Social Advancement (ASA),

Bangladesh Rural Advancement Committee (BRAC), Sabalamby Unnayan Samity

(SUS), Uttaran, Prodipan, and BURO Bangladesh. These MFIs have been working

in these villages for 10–12 years. Apart from these MFIs, there is a bazaar named

the Bazaar Sammeete beside the Horikhali village which also provides loans to the

villagers.

Figure 3. “Gher” (shrimp farm) at Horikhali Full of Weeds Due to Change of Salinity.Source: Field survey January to February 2012.

Figure 4. “Gher” (shrimp farm) at Soladana.


Target Group

Similar to the approach taken by the Grameen Bank, the founder of

microfinance programs for the poor, the beneficiaries of most of the MFIs in the

study area are the poor who have land of 0.5 acre or less. The women who are

poor are the main target group of the MFIs. The age limit of these women is

generally 18–52 years. In addition, some MFIs welcome a small percentage of

poor male members as their beneficiaries.

Although it is often claimed that the extreme poor can rarely become

beneficiaries of MFIs in the study area, Uttaran provides credit to the hard-core

poor and those who are landless.

Amount of Disbursed Credit and Sector of Use

Fishing, trading, rearing domestic cattle and vegetable cultivation, small

farming and share cropping are the main sectors of credit disbursement in the

study area. Since the prime economic activities of the poor in this study area are

related to fishing and small trading, these two sectors comprise the major part of

the disbursed credit. The poor use their credit to buy fishing nets and to carry out

trading. Buying a rickshaw or van is another common purpose of credit use in

this area. Besides these uses, most often a part of the credit is used for

consumption, children’s education and medical treatment, and to pay back other

credit. According to the MFIs’ regulations, a woman can be a member of only one

MFI. However, it is common for most of these families to have an average of

three loans from different sources and to be members of three or four MFIs. This

is a kind of open secret of both MFI officials and beneficiaries. As most

beneficiaries have loans from several sources, they take the loan from one MFI to

pay the installments of loans from other MFIs. The vast majority (77 percent) said

that their indebtedness has increased after being a member of MFIs. They claimed

that they are in the indebtedness trap which is restricting their economic progress

and that it was really hard to break out of this trap.

Different MFIs have different ranges of credit disbursement patterns. General-

ly, the minimum amount of a loan from MFIs in this area is about Tk. 5,000 and

the maximum amount is up to Tk. 200,000 (for small entrepreneurs). For the poor,

usually the amount of microcredit varies from Tk. 5,000–20,000. Officially, the

beneficiaries have to pay 15 percent interest. However, beneficiaries of MFIs claim

that MFIs receive interest rates of 33–38 percent from them and earn only 10

percent interest from their savings deposited at MFIs’ offices.

Special Support and Approaches After Disasters

MFIs also perform humanitarian activities such as distributing emergency

food support not only for their beneficiaries, but also to others after any natural

calamity. After any disaster, especially devastating ones like Cyclone Aila, most

MFIs postpone their weekly installment collection for a few weeks. For example,


after Cyclone Aila, Uttaran provided financial aid to the severely affected

beneficiaries to start small businesses, as well as material support, food, and

drinking water. SUS provided low interest (4 percent interest) business loans,

housing loans and, in some cases, housing materials. BRAC supported poor

farmers with no interest loans under the ACP (Agricultural Credit Program) to

encourage farmers to produce alternative climate adaptive crops such as beans,

corns and sunflowers to respond to climate change as these crops require very

low amounts of water. What MFIs are doing to enhance food security in the

context of climate change can be understood more from the discussion in the next

section.

MFIs’ Response to Support Vulnerable Women With Food Security in the

Climate Change Context

Interestingly, this study has found that none of the MFIs has expertise in

climate change or disaster management at the field level and they are very much

concerned about distributing microcredit. Among the local staff, the level of

understanding about climate change varies. In most cases, the local staffs are

informed or have heard about climate change, but how that affects the local

communities and to what extent is not clear to them. Among the staff of Prodipan

and BRAC, the understanding about climate change is relatively better. However,

most MFIs have recently been trying to incorporate awareness about climate

change and disaster preparedness among their staff with short training courses

for the benefit of employees and beneficiaries. Most training, however, has

focused on disaster preparedness and an early warning system, and not on

climate change adaptation.

During the interviews, most of the MFI officials recognized the impacts of

climate change in the study area in the form of temperature variation, rainfall

irregularities (heavy rain in the off season and low rain in the rainy reason), water

stress, salinity intrusion, and the increase in the frequency and severity of natural

disasters. However, none of the MFIs in the study area have programs directly

addressing climate adaptation especially with regard to the food security issues

of poor women in the context of climate change. However, most MFI officials

recognized that increases in food price, debts and food insecurity that affected

their beneficiaries, especially after Cyclone Aila in 2009, were different impacts of

climate change that had a direct impact on food price and availability as was

addressed in IFPRI (2010). According to the beneficiaries, the overwhelming

majority (87 percent) acknowledged that the role of MFIs was to disburse credit

for employment generation and to facilitate savings generation in order to face

shocks and crises (Table 3). Apart from these two activities, MFIs were seen by

beneficiaries as having almost no other role in the study area. Just after Cyclone

Aila, some MFIs supported their beneficiaries by providing food, housing

materials, drinking water, housing loans, agricultural loans, etc. which was

discussed earlier. However, all these activities were for a short time just after

Cyclone Aila and were not currently continuing.


After Cyclone Aila, most of the households received loans to start economic

activities and housing loans (about Tk. 20,000 [US$245]) for construction: those

loans were nothing but the traditional form of microfinance that supported

everyday living rather than supporting them to adapt to the changing climate.

Therefore, a major portion of this money was used to buy basic necessities such

as food, clothes, beds and utensils. As the housing loan was large compared to

their income, it increased their debt burden. Most MFI beneficiaries spend 70

percent of their weekly income to repay loans to different MFIs, increasing their

food insecurity. The women claimed that after the cyclone, they ate at least twice

a day but now many have only one meal a day so they can repay loans.

Currently, MFIs are not tackling these issues. According to the responses of both

men and women in the study area, although the MFIs intended that beneficiaries

would create alternative income or businesses to start a new life through the use

of their loan authority, the MFIs never bothered about what beneficiaries did with

their loan. Therefore, in many cases, a large portion of the loan was spent

repaying other loans and for consumption rather than being used effectively to

generate income for their food security. In response to queries about changes in

economic conditions and food security after being members of MFIs, the majority

(64 percent) replied about there were no changes (Figure 5). About one-fifth of

the respondents claimed that their food security had deteriorated after being

members of MFIs. Those who failed to make efficient use of credit in income-

earning activities and who had used the loan for consumption had taken out

loans from different sources (sometimes as many as 7–10 sources) to repay the

loan and eventually their indebtedness had increased and their food security had

deteriorated. “[The] loan from the MFI has deteriorated our economic condition. I

have no food stock at home. My housing condition is also so poor. All this is

from the MFI’s loan and my indebtedness,” stated Anima (42), a poor Hindu lady

from Soladana village.

Table 3. Types of Activities Performed by MFIs to Enhance Food Security of Rural Poor Women inClimate Change Context

Contribution/Role of MFIs Percentage of Respondents (%)

Credit for employment diversification 87Credit/support for emergency preparedness/

recovery from shocks and disaster0

Facilitate savings to face shocks and disasterand to secure food

87

Training and skill development (specify) 0Provision of consumption credit 0Provision of emergency food 7Provision of material aid (housing material) 7Awareness building and motivation/advice related to

agriculture in climate change context6

Advice/non-financial support to have alternative income 0Drinking water supply 34

Source: Field survey January to February 2012.Note: Percentage may not be 100 percent due to multiple responses.


After being members of MFIs, some women (about 16 percent) have become

successful in improving their food security. Sobiron (56), a Muslim lady from

Boyarjhapa village, stated that “I am grateful to the MFI, as the loan from it

helped me to buy a Nosimon [type of auto-rickshaw] for my son. Now he is

earning a lot, which has contributed to enhance our economic condition and food

security. Otherwise, my son may become a thief.” Kobitarani (52) from Soladana

village had similar views about the positive role of MFIs. She conducted a

business in rice buying and selling with the investment of the MFI’s loan. She has

significantly improved her family’s economic conditions and food security. She

stated that “If any one uses the credit with intelligence, he or she can improve

their economic condition with it. But only about 20 percent of people are doing

better with the MFI’s credit and 80 percent are deteriorating their condition.”

Problems and Expectations Related to MFIs in Enhancing Food Security of Rural Poor

Women in the Climate Change Context

According to female beneficiaries of MFIs, different problems are related to the

present forms of MFIs. As shown on Table 4, about half of the respondents (48

percent) claimed that MFIs were very strict in their policy on loan recovery.

Regardless of any emergency, family crisis, shocks or job loss due to natural

disasters, they needed to repay their loan installments on a weekly basis. Therefore,

sometimes they were forced to borrow from other sources to repay a loan, which

increased their indebtedness. Mrs Rokeya (52) emotionally stated that “I took out Tk.

10,000 from an MFI and invested it for house construction. But Cyclone Aila

destroyed our house and we failed to pay back my installments. As the MFI is very

strict in loan recovery, I had to sell my nose pin. Although my husband is alive, I am

passing days without any nose pin, as I could not arrange money to buy a nose

pin.” Here, it should be noted that a nose pin is a very sensitive ornament for a

Figure 5. Change in Economic Conditions to Purchase Food and Daily Needs as Members of MFIs.Source: Field survey January to February 2012.


married Muslim woman in rural Bangladesh. However, many of the women have

also appreciated that, compared to previous years, the strictness in installment

collection has been relaxed to some extent. However, the high interest rate of MFIs’

loans was a significant problem for beneficiaries. MFI officials claimed that the

interest rate was 15 percent but the beneficiaries stated that it was actually 33–38

percent. Beneficiaries also claimed that the climatic conditions and eventually their

income-earning opportunities were changing; but that this did not concern the MFIs.

Since women’s job scarcity is increasing and income is decreasing day-by-

day, rural poor women expect a lot from MFIs just to maintain their food security.

The MFIs are redesigning their policies so that loans are repaid six monthly or

yearly. This new mechanism could help, but in the long term, the interest rate is

too high for these rural poor communities to repay.

The rural poor women were demanding support and training so they could

have alternative income-earning opportunities rather than working as daily

laborers and collecting shrimp fry. In fact, working as daily laborers and shrimp

fry collection are relatively available only from November to March. For more

Table 4. Problems and Expectations Related to MFIs in Enhancing Food Security of Rural PoorWomen

ProblemsPercentage of

Respondents (%) ExpectationsPercentage of

Respondents (%)

No consumption creditduring disasters/slack season

21 Provision of consumption creditor food support duringdisasters/slack season

23

No material aid or food support 28 Provision of material aid or foodsupport

39

High interest rate 39 Supports and training to womenfor alternative employmentgeneration in climate changecontext

67

Very strict in loan recovery 48 Motivation and awarenessgeneration for women’s rightsand food security

14

Cannot get savings back in atimely way/long waiting time neededto get back savings

6 Relaxation of installmentpayments during disasters/slack season

48

No supports during crisisperiod/disasters

21 Low interest rate 59

No support services for healthand education

27 Provision of health and educationsupport services

27

No support for housing 52 Provision of housing supportwith low or no interest

38

No training facility for women inemployment generation

41 Awareness generation on climatechange impacts, adaptationand disaster preparedness

28

Increase in number ofinstallments

56

Source: Field survey January to February 2012.Note: Percentage may not be 100 percent due to multiple responses.


than half the year, women have no income-earning opportunities in their locality.

Therefore, more than half the women (67 percent) (Table 4) expected that if MFIs

offered income generating training for them, they could utilize the training for

alternative ways of earning income. The field investigation revealed that although

MFIs gave credit to the female members of a household, except for a few women,

in most cases, the husband or male family members were using the credit for

economic activities and the women had no control over the income. All these

women expected their own income-earning opportunities with the help of MFIs.

Since most of their housing conditions were poor protection against cyclones

and tidal surges, the overwhelming majority of these poor women expected

housing materials as aid so that they could have secure homes. In addition, more

than one-third (39 percent) of the women and especially those who lived in

Boyarjhapa village expected water tanks from MFIs so they could conserve

rainwater. Many of the poor women could not afford the cost of earthenware

water containers that they usually used to conserve water. The provision of health

and education supports by MFIs was also demanded by many beneficiaries. After

experiencing Cyclone Sidr and Cyclone Aila, most of the villagers along with the

female beneficiaries were interested in receiving training from MFIs to learn

about climate change impacts, adaptation and disaster preparedness.

Introducing MFIs as Part of the Climate Change Adaptation Process

The role of microfinance in poverty alleviation has been examined by several

researchers but how MFIs can contribute and play a pivotal role in supporting

food security for the poor in the climate change context has not yet been well

addressed. Recently, MFIs and their microfinance activities have been strongly

criticized for their high interest rate (Agrawala & Maelis, 2010). Scholars have

claimed that it is the modern version of the moneylender (Ahmed, 2011). It has

also been recognized by research that, in many cases, microfinance is creating

dependency among the poor and is not able to reduce their indebtedness while,

at times, it increases their hardship and poverty. It has also been suggested that

MFIs need to embrace social interventions in addition to economic interventions

to induce sustainable benefits for the poor (Parvin et al., 2008). Similar

perceptions and expectations were noticed among the MFI beneficiaries of this

study. Along with the credit, many of them expected skill development training,

housing, health and education support, and awareness generation and support

for climate change adaptation, disaster risk reduction and recovery (Table 4). The

economic interventions (credit support) on their own have failed to enhance food

security for the poor women. The majority (64 percent) of respondents failed to

enhance their food security with the support of credit from MFIs in the climate

change context (Figure 6). Furthermore, about one-fifth of the respondents’ food

security had deteriorated since being a member of MFIs. MFIs’ activities were

criticized: while a large number of rural poor women were found to be dependent

on MFIs for their socio-economic development, it is necessary to redesign MFI

programs and priority components to improve food security.


Figure 6 presents the model of an MFI that respondents expected would

enhance their food security in the climate change context.

Conclusion

As in other developing countries, the women in the study area had little

understanding about climate change and its induced impact on their lives and

livelihood. However, climate changes in the form of climatic variability and

salinity intrusion, as well as other man-made factors, are affecting coastal

communities of Bangladesh. This is changing women’s livelihoods, increasing

hardship in their daily lives and lowering food security. A number of MFIs are

Figure 6. Model of MFI Expected to Enhance Food Security of Rural Poor Women in Climate ChangeContext.


trying to create alternative employment opportunities for women by providing

microcredit. However, economic interventions of MFIs (mostly credit and savings

program) have failed to address climate change impacts and to enhance the food

security of poor women in the climate change context. Therefore, both economic

and social interventions should be included in the program of MFIs, and an

integrated and comprehensive approach to socio-economic development of rural

poor women in the context of climate change should be given priority. MFIs were

also found to have limited understanding about climate change and its impact on

women’s lives. Therefore, there is a great need to conduct research on gender and

climate change issues focusing on how institutional efforts, such as microfinance,

can help women adapt to the impacts of climate change.

While conducting this research, it has been noticed that several other

important issues in the study area demand urgent research and action. For

instant, due to climate change and salinity intrusions, there is a scarcity of

income-earning opportunities in the locality and many families are temporarily

migrating to nearby towns/cities or even to the capital city. This migration has

had a severe impact on their children’s education, which requires serious

attention. Furthermore, for almost half the year, the majority of the women had

no income-earning activities. However, alternative employment generation

approaches are not considered an urgent need either by the Government of

Bangladesh or by NGOs. The drinking water and fuel supply crises and their

impacts on women’s life should also be addressed. Policy makers need to pay

attention to the problems, expectations and potential of local communities,

especially among women. Policy makers need to highlight the role of MFIs and

that they need to address climate change and food security when offering loans

to women. Policy makers should also highlight the need to create a balance

between agriculture and shrimp farming, and to evaluate the role of these two

activities in climate change adoption and environmental protection. It is noticed

that salinity intrusion due to climate change and shrimp farming has mainly

benefited the upper class of the community (landowners). Therefore, concerns

about the majority of these communities who are poor are an urgent need.

Gulsan Ara Parvin is at Pathikrit, Social and Human Development Organization,

Khulna, Khulna, Bangladesh.Reazul Ahsan is at Khulna University, Urban and Rural Planning Discipline,

Khulna University, Khulna, Khulna, Bangladesh.Hashan Ali is at Khulna University, Urban and Rural Planning Discipline,

Khulna, Khulna, Bangladesh.Kazi Farzana Shumi is at International Islamic University, Department of

Business Administration, Dhaka, Bangladesh.

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