From the delta of the Indus to the mountains of the Karakoram, Pakistan is a land of ancient civilizations – yet still plagued by challenges similar to those of Bangladesh. Launching a microfinance programme here in 2007, BRAC Pakistan has since added pilots to include vital services in health, education and integrated assistance for the ultra poor. In addition to having over 90,000 micro-borrowers, BRAC’s 138 Pakistani health volunteers have referred thousands of patients and its 40 schools have given hundreds of disadvantaged students a head start in pre-primary education.
Pakistan Pakistan 5,000 years of heritage From the delta of the Indus to the mountains of the Karakoram, Pakistan is a land of ancient civilizations – yet still plagued by challenges similar to those of here in 2007, BRAC Pakistan has since added pilots to include vital services in health, education and integrated assistance for the ultra poor. In addition to having over 90,000 micro-borrowers, BRAC’s 138 Pakistani health volunteers have referred thousands of patients and its 40 schools have given hundreds of disadvantaged students a head start in pre-primary education. What started out in 1972 in a remote village of Bangladesh as a limited relief operation, turned into the largest development organisation in the world. Of major non-governmental organisations, BRAC is one of the few based in the global south. Today, BRAC is a development success story, spreading solutions born in Bangladesh to 10 other countries around the world – a global leader in creating opportunity for the world’s poor. Organising the poor using communities’ own human and material resources, it catalyses lasting change, creating an ecosystem in which the poor have the chance to seize control of their own lives. We do this with a holistic development approach geared toward inclusion, using services, community empowerment and more. Our work now touches the lives of an estimated 126 million people, with staff and BRAC-trained entrepreneurs numbering in the hundreds of thousands – a global movement bringing change to 10 countries in Asia, Africa and the Caribbean, with operations in our 11th country, Philippines, being launched in 2012.
Transcript
Pakistan
Pakistan5,000 years of heritage
From the delta of the Indus to the mountains of the Karakoram, Pakistan is a land of ancient civilizations – yet still plagued by challenges similar to those of
here in 2007, BRAC Pakistan has since added pilots to include vital services in health, education and integrated assistance for the ultra poor. In addition to having over 90,000 micro-borrowers, BRAC’s 138 Pakistani health volunteers have referred thousands of patients and its 40 schools have given hundreds of disadvantaged students a head start in pre-primary education.
What started out in 1972 in a remote village of Bangladesh as a limited relief operation, turned into the largest development organisation in the world. Of major non-governmental organisations, BRAC is one of the few based in the global south.
Today, BRAC is a development success story, spreading solutions born in Bangladesh to 10 other countries around the world – a global leader in creating opportunity for the world’s poor. Organising the poor using communities’ own human and material resources, it catalyses lasting change, creating an ecosystem in which the poor have the chance to seize control of their own lives. We do this with a holistic development approach geared toward inclusion, using
services, community empowerment and more.
Our work now touches the lives of an estimated 126 million people, with staff and BRAC-trained entrepreneurs numbering in the hundreds of thousands – a global movement bringing change to 10 countries in Asia, Africa and the Caribbean, with operations in our 11th country, Philippines, being launched in 2012.
Contents
Mission, Vision and Values 01Chairperson’s Statement 02Education 04Health 07
TUP 13BRAC across the world 16Harnessing the past 18Governance 20Management 21Development partners 21Financials 22
Harnessing the pastEnriching the future
1 Annual Report 2011
Vision
A world free from all forms of exploitation and discrimination where everyone has the opportunity to realise their potential.
Mission
Our mission is to empower people and communities in situations of poverty, illiteracy, disease and social injustice. Our interventions aim to achieve large scale, positive changes through economic and social programmes that enable men and women to realise their potential.
Values
InnovationFor forty years, BRAC has been an innovator in the creation of opportunities for the poor to lift themselves out of poverty. We value creativity in programme design and strive to display global leadership in groundbreaking development initiatives.
IntegrityWe value transparency and accountability in all our professional work, with clear policies and procedures, while displaying the utmost level of honesty in our financial dealings. We hold these to be the most essential elements of our work ethic.
InclusivenessWe are committed to engaging, supporting and recognising the value of all members of society, regardless of race, religion, gender, nationality, ethnicity, age, physical or mental ability, socio economic status and geography.
EffectivenessWe value efficiency and excellence in all our work, constantly challenging ourselves to perform better, to meet and exceed programme targets, and to improve and deepen the impact of our interventions.
Vision, Mission and Values
2 Annual Report 2011
Chairperson’s Statement
It gives me great pleasure to present the
statements for the year ended 31 December 2011.
Pakistan has suffered from internal political disputes and low levels of foreign investments for decades. Some of their long term challenges include expanding investments in education, healthcare, electricity production, and reducing dependence on foreign donors. As of 2011, 60.98 per cent of the population is living on below USD 2 a day, with an unemployment rate of 5.6 per cent. On the Human Development Index, Pakistan stands at 145 out of 187 countries.
Amongst the highlights of 2011, BRAC has
total of 100 branches across the country, adding six more branches since 2010. Our total disbursement of micro, small enterprise and agriculture loans for the year 2011 is PKR 1,656,204,000 (USD 19,162,374) among 97,547 borrowers. Small enterprise loans have been initiated in twenty branches across the country, and agriculture loans are provided to male farmers in three districts of Punjab.
Annual Report 2011 3
During this year, we distributed assets as a means of income for 1,500 women in Lasbela through our ultra-poor programme, which serves those living in extreme poverty. These women also received health cards from us so that they can acquire free-of-cost medicine at three of our health clinics in Lasbela. So far, 1,416 of these women have received health subsidies.
Looking ahead, we will be continuing our plan of expanding the health coverage to
seven health clinics by end of 2012.
I take this opportunity to commend our team in Pakistan who have worked with enduring commitment and loyalty to make use of every opportunity that has come our way.
The quality of our performance is attributed to this remarkably competent team, their knowledge, skills and professionalism. I extend my sincere thanks to the members of the governing body, whose leadership and foresight has steered the organisation to success.
I thank the government and our development partners in Pakistan for their continued support as we strive to create greater values in our services to contribute towards the progress and prosperity of Pakistan.
4 Annual Report 2011
With education programmes in six countries, BRAC has built the largest secular, private education system in the world, including 36,000 schools giving disadvantaged youth a second chance at learning. Complementing mainstream school systems with innovative teaching methods and materials, BRAC opens primary schools in communities unreached by formal education systems, bringing joyful learning to millions of children, particularly those affected by extreme poverty, violence, displacement or discrimination. At the pre-primary level, we target underprivileged children to prepare them for mainstream primary school entry. At the secondary level, we provide need-based trainings, student mentoring initiatives, and e-learning materials to improve the mainstream secondary education system.
BRAC Programmes
Education
BRAC is implementing its educational programme in Pakistan to supplement the government’s drive to establish early childhood education centres in various
targeting those who are underprivileged, deprived, neglected, and are suffering from multiple discrimination, which impacts their ability to access and retain further schooling. Similarly, the education programme is designed to supplement
Eradicating educational inequality
the government of Pakistan (GoP’s) efforts in achieving the Millennium Development Goals of ensuring gender equality in education as well as access to, and completion of, quality primary education for all children by 2015.
Global experiences clearly demonstrate that early childhood interventions
psycho-social development of children.
Pre-primary education is, therefore, an important strategic intervention for promoting quality primary education. It serves as a ‘school readiness programme’ for young children, easing their transition from home into a formal classroom setting and familiarising them with the alphabet and numbers. Creating provisions for pre-primary schooling, especially for girls, can ensure their continued participation in primary schooling, which contributes
A BRAC primary school in Khyber-Pakhtunkhwa.
Annual Report 2011 5Education
Growth in 2011
BRAC Pakistan established pre-primary and primary schools to promote education and reduce the drop-out rate from government schools. Currently, there are
in Haripur and Lasbela respectively, with 465 current students and 1,187 graduates who have completed pre-primary schooling and moved on to government schools.
BRAC’s education programme in Pakistan is not the replication of the BRAC model, but a synthesis of its experience combined with local practices and needs. One of the major distinctive features of BRAC’s approach is the involvement of the community, local government, provincial/
stakeholders of primary education in the design and implementation process.
In March 2009, BRAC USA made a grant amounting to USD 47,143 to support 75 percentof the funding for BRAC Pakistan
to open 20 pre-primary schools, with 620 students (386 girls and 234 boys) in Haripur District of KPK Province. As of
primary schools have been completed. So far, 40 schools have been completed and 1,187 students have graduated.
In 2012, BRAC will open 200 pre-primary schools in Khyber-Pakhtunkhwa province with support from DFID, providing early education to 6,600 children.
to gender equality in education. Early education is therefore a valuable intervention for success in achieving universal primary education.
In March 2009, we piloted an early childhood education project in Haripur, Khyber-Pakhtunkhwa with a grant from BRAC USA. Based on our initial assessment and consultation with community members, we found that education, particularly for girls, has been one of the most pressing needs for the country. Additionally, children from poor families require access to pre-primary and primary school.
The objective of the education programme is to develop an institutional structure with skilled key personnel and trained teachers to deliver a cost-effective and replicable pre-school intervention to strengthen the GoP’s efforts to implement early childhood education. They are aiming to create child-centred learning environments, which are favourable for personal, social and emotional development, language development and communication, knowledge and understanding of the world, creative and aesthetic development, physical development, and mathematical development, as well as building a positive attitude towards further learning.
Part of their strategy includes transitioning pre-primary graduates into Grade I in formal primary schools, so that there is a lower drop-out rate and a greater retention
government primary schools. The effective participation of parents and communities in the educational process is crucial for the development of any child, with a surrounding environment rich in culture and experience.
Sir Fazle Hasan Abed’s life and career embody the values of WISE. He recognised that education is a passport to social inclusion and opportunity. He discovered a successful formula, and he adapted and expanded it – first in Bangladesh and then in other countries. As a direct consequence, millions of people around the world lead healthier, happier and more productive lives. His vision, resourcefulness and determination are vital ingredients of the innovation process and he stands as an example to all of us who believe that education, more than anything else, determines the destiny of individuals and societies.
H.E. Dr. Abdulla bin Ali Al-Thani
WISE (World Innovation Summit for Education) Chairman
6 Annual Report 2011 Education
C A S E S T U D Y
Saiqa Bibi is eight years old and lives with her parents and three siblings in the Old Bakka village of the Haripur district, Khyber Pakhtunkhwa province. Her father earns his livelihood working in a shop, whilst her mother works in the homes of other people. Saiqa’s physical disability has prevented her from receiving any formal education. Even her parents were not hopeful of providing the adequate schooling for their daughter, due to the lack of schools which cater to children with special needs. Saiqa spent the majority of her time at home, refusing to engage in any recreational activities due to her physicall differences.
While opening a pre-primary school in Old Bakka, a surveyor included her
name in the list as a probable student, because they were instructed that the children with special needs and the poorest children will be admitted on a priority basis. Her parents initially asked the surveyor to remove Saiqa’s name from the list of the selected students since they felt she would be unable to attend. However, her name was kept on the list and Saiqa was admitted to the school. Saiqa’s teacher was instructed to pay special attention to her, and during the monthly Mother’s Forum, the BRAC education programme organiser advised her parents to encourage and support her in her daily life, such as helping her with her homework. They wanted Saiqa to feel connected to the school so they motivated her to attend every day. Gradually, through the encouragement from her parents and teachers, Saiqa became more punctual and was participating in all school activities. She was even elected as a group leader.
After the completion of her course from BRAC’s pre-primary school, she was enrolled at the nearby government primary school with the help of BRAC’s staff. Her parents are now very hopeful that Saiqa
will be able to continue her education and achieve great success in her life.
The BRAC education programme
in Pakistan in the spring of 2009. Before establishing the schools, BRAC
communities to get their approval for
task was to establish a partnership with the government of Khyber-Pakhtunkhwa. This enabled BRAC to survey areas in the province to establish the schools where they were needed.
With the support of the local government,
surveys and held a number of town hall meetings with communities to understand their needs.
Saiqa now loves attending school, learning new things and making new friends.
SAIQA BIBI: A truly special student
“Before, I didn’t think someone with my condition could ever go to school, but thanks to BRAC, and the support I received from my teachers, I love going to school now.“
Annual Report 2011 7
Working in eight countries, BRAC’s health programmes promote sustainable and accessible healthcare for the poor in collaboration with both the state and private healthcare sector. Working in their own slums and villages, BRAC’s army of self-employed community health volunteer helps the entire community in staying healthy, with a groundbreaking door-to-door approach. These workers create a cost-effective bridge between the under-served poor communities and formal healthcare systems. BRAC also organises health meetings to encourage an exchange of knowledge, thus empowering people to take care of themselves, their families and neighbours.
Health
Within our generation we have seen a worldwide sharp reduction of deaths related to treatable diseases. We owe a lot of this to BRAC.
Jeffrey Sachs Director, Earth Institute,
Columbia University
A BRAC community health worker checks the blood pressure of a woman during her daily door-to-door visits to households in her community.
Growth in 2011
BRAC’s health programme in Pakistan can now boast 16 lady health workers, and 158 health volunteers in helping to provide primary healthcare services in Nowshera, Sahiwal and Lasbela. With a focus on knowledge retention, BRAC organised monthly refreshers for 34 programme assistants and 138 health volunteers in 2011.
During 2011, 200 traditional birth attendants received training on safe delivery, while antenatal care was provided to 3,821 pregnant women, while 3,526 mothers received post-delivery care. Around 8,526 patients who had contracted malaria were treated through the malaria programme, and 180
TB control programme. Pneumonia is another deadly disease that kills a large number of children and vulnerable adults and BRAC was able to offer treatment to 6,549 patients. As of December 2011, 7,856 children and women were immunised.
Amongst the highlights of 2011, BRAC in Pakistan began issuing health cards to its
cards, the ultra poor can receive medicine free of cost from any of the three health clinics established by BRAC in the Lasbela
received health subsidies.
BRAC Programmes
8 Annual Report 2011
Improving health in Pakistan
Pakistan has made reasonable progress in improving the health status of its population over the last decade, as
coverage, and reduced infant mortality. However, the situation still remains dire in most parts of the country as the health status is well below the average amongst all low income countries. Unsanitary conditions, polluted water, illiteracy amongst rural mothers, urban slums, high fertility, small budget allocation, and inadequate administrative structure have
the progress of health conditions. The government’s effort to reach out to the poor through lady health workers (LHWs) have been a success in many aspects, although in certain areas this initiative has failed to provide full coverage.
BRAC initiated their health programme in Pakistan with the aim to improve the access to health care, and consequently improving the health status of the poor, particular the women and children. The programme provides basic primary health care services and maternal, neonatal, and child health (MNCH) services to the local community.
Health and nutrition education is provided through separate health forums for men and women at the community level as in some regions of Pakistan, gender segregation is strictly maintained. BRAC also has alternative methods to deliver health messages through the imams during prayers in the mosques. A greater
planning as the population of Pakistan is increasing at an accelerated rate. BRAC’s community health volunteers (CHVs) provide door to door family planning service, including supplying temporary birth control methods. The CHVs also provide follow-up services on
household visits, keeping a record of their immunisation and Vitamin A intake status in a family card. They also provide health and nutrition education to all the families.
The health programme targets the immunisation of infants less than one year, and also women of childbearing age, especially pregnant women. They also provide antenatal and postnatal care, promote breast feeding, encourage family planning, advise to use a trained birth attendant in the case of normal
Farhanda Naveed (from left), forty-two years old. She is a health worker of BRAC Pakistan health program. Farhanda has been taking weight of a pregnant woman at weekly BRAC health forum meeting in Midhali village of Sahiwal district of Punjab province of Pakistan.
delivery, and refer mothers to hospital if complication arises. The CHVs are trained to provide basic curative services by diagnosing and treating 10 common diseases and referring patients with serious complications to the nearest government facility.
Activities under the water and sanitation intervention are regularly conducted by raising awareness among community people about the importance of using safe water and sanitary latrines through household visits and group health education.
Health
Annual Report 2011 9
Azra Bibi, a 42-year old woman, who lives in Mohalla Rajpura, Pakistan, is among the many women who have been empowered by BRAC’s health programme. She was informed about a BRAC health forum held in her neighbourhood by Rashida, a BRAC community health worker. Community health workers (CHW’s) and community health volunteers (CHV’s) are
training that enables them to deliver quality services to the community members, such as Azra. They are knowledgeable
and equipped to treat many common illnesses that can be treated effectively with common medicines. They are also educated on many basic health matters, such as sanitation, family planning, ante/post-natal care, vaccinations, and respiratory and stomach illnesses. Rashida is provided with extensive training from BRAC that gives her the essential information to brief community members on health topics such as the symptoms, prevention and initial treatment of pneumonia, which is one of the topics of the health forum. Azra was intrigued by this forum which led her to become eager to participate in future forums.
During the forum, Azra listened attentively while the topic of tuberculosis was discussed and found the session to be very informative and educational. At the end of the health forum, she met Nasreen, who was a health worker and speaker of the forum, to share some of her concerns. Azra mentioned to Nasreen that some of the symptoms explained during the session were common symptoms her husband was experiencing during that time. Although he has been taking
medicine for the last two months, there have been no visible improvements. Nasreen visited her home afterwards and advised Azra’s husband, Aslam Ali, to take a sputum test called Directly Observed Therapy (DOT) for the treatment of tuberculosis performed by community health workers themselves.
Nasreen performed the DOT on Ali, and the results of the examination
from tuberculosis. Although both the husband and wife were distraught by the results, Nasreen explained to them that tuberculosis is a curable disease and she can help assist Ali in getting free medicine from a local hospital. As part of her responsibility, Nasreen consistently followed up with Ali, and after nine months of medication and treatment, he was
Ali and Azra were thankful to BRAC because Nasreen was able to help identify Ali’s disease at the initial stage and, as a result, he was able to seek treatment. This educational forum and follow up treatment left a positive impact on Azra, which inspired her to work with BRAC as a health
Azra is proud to serve her community as a health volunteer.
AZRA BIBI: Learning to save her husband’s life
“I can help my people as BRAC helped my husband. The BRAC health forum left a remarkable impact on my life because through this forum I was able to recognise early symptoms of tuberculosis and I was able to help my husband. Thank you very much BRAC.”
Health
10 Annual Report 2011
Pakistan is a developing country with unevenly distributed access to economic opportunities or basic services. The
services to the poor. The country’s present infrastructure is able to meet the demands of only 10 per cent of the potential market estimated at 10 million
and an opportunity for growth, product
Foreseeing the opportunity to serve the poor, BRAC started operations with the objective of poverty alleviation and human
Microfinance
holistic approach to support livelihoods. Over the course of the last four decades, we have grown to become one
manage their lives.
BRAC shows how microcredit schemes are a very important means of delivering self-sustainability in the poorest communities and how women are proving to be the most responsible and successful beneficiaries.
Cherie BlairHuman Rights Activist
Cherie Blair Foundation for Women
Serving the poor in Pakistan
Working mostly with women, this programme aims to strengthen the income base of the poor by providing easy access to institutional lending to start small and medium income generating activities, as well as mobilise women to contribute to household income.
be wielded by the poor to pave their way out of poverty by taking advantage of new opportunities and better managing the sufferings they face. The social
in the form of group functions can build social capital among the poor which,
potential to be a powerful mix in the
such social capital through the process
used as an entry point to challenge other structures that reproduce poverty. It is such a holistic vision of possibilities that
The overall objectives of BRAC’s
of poverty, create self-employment opportunities, enhance household income level and reduce the vulnerabilities of the rural poor of Pakistan, especially the women. In order to accomplish these goals, BRAC will emphasise on the following immediate objectives:
Increase permanent access to credit to poor households, and subsequently offer
BRAC Programmes
Annual Report 2011 11Microfinance
savings services through a regulated
Give opportunities to the disadvantage, especially women, for income generating activities, so they could be empowered and have greater decision making power both within her household and beyond, and
Alleviate poverty in rural Pakistan and contribute to attaining the Millennium Development Goals (MDGs).
Growth in 2011
As of December 2011, we have 97,547micro, small enterprise and agriculture loan borrowers from our 100 branches. A total amount of PKR 1,656,204,000 (USD 19,162,374) has been disbursed in loans as of December2011. BRAC has also initiated its small enterprises programme (SEP) in 20 branches in the Nowshera, Peshawar, Rawalpindi, Gujrat, Lahore, Sahiwal and Multan Districts in Pakistan. All
arrangements, including the recruitment of relevant staff and their proper training have already been conducted. In addition, we initiated the agriculture loan through eight branches in the Sahiwal, Multan, Muzaffargarh and Multan districts of Punjab Province.
BRAC is successfully replicating its
platform to spearhead its health and education programmes, and improve market access of the poor by developing extension services and sub sectors such as poultry and livestock. It combines with a grant-based assistance to craft a graduation scheme for the ultra-poor. The basic business model is one that focuses on building the structure for sustainable
the appropriate scale. To do more, our programme builds on that structure of
managed separately and sustainably,
development interventions.
in the Khyber Pakhtunkhwa (KPK) of Pakistan in August 2007 at a small scale. By December 2008, BRAC was
districts in KPK, Sindh and Punjab. During 2007 to 2008, the organisation gained knowledge and experience assessing potential demand and socio-cultural dynamics in the local market. Through this learning process, BRAC has made
environment.
Looking ahead to the future, BRAC
programme, increasing their number of members to 142,081 and their number of borrowers to roughly 117,724 in Pakistan. For our agriculture programme, we are planning to steadily increase the number of districts we cover by end of 2012, targeting to reach 2,836 borrowers.
Boshra sits with her husband Saeed and a group leader who will sign as guarantor to receive a loan from BRAC in Quanchi Amer Sadhu branch in the city of Lahore, the capital of Punjab Province in Pakistan.
12 Annual Report 2011
Naziran came from a poor family, living in Sukkur in the Sindh province of northern Pakistan. As a day labourer, her husband’s
children to school was not an option
situation. Naziran desperately wanted to do something to help her family overcome their present situation.
One day, a female staff working for BRAC in Pakistan visited her home and informed
BRAC, which she utilised by initiating her own small business. In March 2010, she took out a loan amounting to PKR 10,000
(USD 110) from BRAC and invested on a bangles shop, since there were no other shop of such kind in the surrounding areas. Soon after entering the business,
profession. She was earning a good income from her business, but soon the region was affected by a natural disaster.
and shops destroyed, affecting the lives of 14 million residents.
During this time, BRAC played a vital role in aiding those affected by the
re-establishment of the businesses by providing those affected by the disaster
Naziran reshaped her business and
her the ability to pay back both her loans in time. Recently, she took out a third loan from BRAC to expand her business. She is hopeful that she will be able to earn a
lead a comfortable life. Eventually, she will be able to send her children to school as well.
BRAC focuses on both the economic and social needs of their target borrowers in Pakistan, recognising and understanding that communities of borrowers require multiple interventions to move out of poverty. BRAC’s aim is to strengthen the income base of underprivileged women by providing easy access to institutional lending, which in turn will enable them to begin their own income-generating activities. BRAC’s policy in Pakistan is to encourage investments for women in productive activities. They place primary focus on women borrowers because they play a pivotal role within the local and
operate businesses that provide products or services to their local communities.
C A S E S T U D Y
Naziran and her husband are now financially secure, and can send their children to school.
NAZIRAN: Finding hope through BRAC
“I am very appreciative of the steps undertaken by BRAC in Pakistan to alleviate poverty, and to lend us a hand and
when we were desperately in need of assistance.”
Microfinance
Annual Report 2011 13
Targeting the Ultra-Poor
BRAC’s ground-breaking ultra-poor programme focuses on improving the economic and social situation of extremely deprived women and their households. Upholding BRAC’s holistic approach to development, we carry out a sustainable model by creating prospects for the most disadvantaged people within communities to overcome extreme poverty through careful selection, intensive integrated support including asset grants, skill development, personalised healthcare support, and ensuring social security through community mobilisation.
Reducing extreme povertyIn the Balochistan province of Pakistan, the poorest people suffer the most due to the seasonal income crisis, acute food insecurity, severe malnutrition, and scarcity of water and sanitation. Due to unfavourable weather, and subsequently the underutilisation of resources, most of the poor only manage to survive with low purchasing power. In order to address the particular need of the extremely poor population in Balochistan, BRAC implemented a full grant based programme called challenging the frontiers of poverty reduction, targeting the ultra-poor (CFPR-TUP) in the Lasbela district in Pakistan. The programme operates using innovative approaches with a mission to identifying and addressing the heterogenic factors which are prevalent in the poverty situation in the region, and thus offering tailor made services to the target group.
Zareen Khan tends to the goat that her mother received as an asset from BRAC.
STUP
INTERVENING
INVESTING
TARGETING
OTUP
BRAC Programmes
14 Annual Report 2011
Growth in 2011
BRAC Pakistan started its CFPR-TUP programme in 2010, with funds from the Pakistan Poverty Alleviation Fund (PPAF) in Uthal, Bela and Hub Tehsils of Lasbela district of Balochistan. The two-year programme reached out to
cash stipend, asset transfer, enterprise development training, social development
received economic, social, and health support for a full 24-month cycle. All 1,500
the basis of their interest, awareness and involvement, so that they can take the proper steps to use their assets more effectively. After receiving appropriate
receive the assets.
In 2011, the assets were distributed as such: 295 people received livestock, 512 received goats for rearing, 248 received sheep and poultry for rearing, 377 received one cow and 10 birds, 60 for non-farming activities, and eight for vegetable cultivation. So far, 75 per cent of their assets have commenced production.
To strengthen their social security, social acceptance, a sense of volunteerism and sympathy, BRAC has formed a poverty reduction committee called Gaonki Goribaonki Madad Korneki (GGMC) in every village under Uthal, Bela and Hub branches. These committees are responsible for recommendations and serve as a communication channel when
BRAC has served as an important model for microfinance institutions in other countries hoping to reach the bottom of the pyramid. Programmes including SKS and Bandhan in India and Fonkoze in Haiti have launched replications of TUP (Targeting the Ultra-Poor)...[that] share the fundamental approach of targeting and subsidising the poorest of the poor.... For USD 135 per participant, BRAC aimed to forever remove the need for participants to require future handouts. The evolution of the Targeting the Ultra-Poor programmes signals the challenge of reaching that goal, but the overall vision behind the programme remains compelling.
From the book The Economics of
Beatriz Armendáriz,Lecturer in Economics, Department of
Economics, Harvard University
Jonathan Morduch, Professor in Public Policy and Economics,
Wagner Graduate School of Public Service, New York University
a TUP member suffers from any loss of property or livestock. They also play an important role in raising awareness through
level of the TUP members to participate in the mainstream development. In light of the recommendations from the GGMC committee, 263 houses, 476 latrines and, 53 sinking hand pumps were constructed, and 6,000 trees were planted.
BRAC has implemented its TUP programme effectively in Pakistan, and thus the PPAF has approved further funds for expansion of the programme to the remaining areas of Lasbela and Khuzdar. A survey is being conducted for the
9,846 households, 6,595 from Lasbela and 3,251 from Khuzdar, have been interviewed by using a poverty score card.
Data collection has been completed and data entry and compilation is currently
from the data, as well as by following the selection criteria, the selection of TUP
CFPR-TUP programme is specially designed to meet the needs of extremely vulnerable, and who are unable to access
reduction programmes. The CFPR-TUP’s advocacy component functions as an agent of change to bring about
in the larger society. The main objective of the CFPR-TUP programme is to help the ultra-poor graduate from extreme
the programme works to ensure regular and sustainable participation of clients in income-generating activities, removing socio-economic constraints against human development and assisting the ultra-poor households to have access to the mainstream development services.
Targeting the Ultra-Poor
Annual Report 2011 15
C A S E S T U D Y
In the midst of all the challenges, Noor was fortunate to qualify for BRAC’s targeting the ultra-poor (TUP) programme. The programme provides intensive support to extremely poor families, especially those headed by women. Eligibility is assessed based on several different indicators such as income level. Women selected for the programme had the option of choosing from multiple asset packages and related enterprise development trainings. Noor received professional training in poultry and goat rearing. After completing her training, BRAC gave her four goats and 10 hens.
Noor is currently earning PKR 60-80 a day, and has accumulated 11 goats. The BRAC programme organisers (POs) are very involved from the beginning to the end, selecting TUP clients and continuing to follow up on them after the asset transfer, in which the types of assistance delivered by the POs differ from client to client.
After getting to know Noor and observing her interest in handicraft, BRAC advised her to save PKR 20 daily from her income to invest in supplies for her hobby. With the savings she acquired, she was able to purchase materials such as needles and other handicraft tools. Now she has been
earn a good income.
Noor has been given the opportunity to provide a better life for herself and, most importantly, for her family. BRAC’s TUP programme has opened the door for her to establish herself as an entrepreneur and invest in the future of her children as well. She has gained respect from the community and her husband whom she was able to reconcile with after their separation. Her family has been reunited and the children have enrolled in school.
Noor Bano, like many young women in Pakistan, was married at a very young age. She was married, at 17, to a man twice her age. Noor had to take on many responsibilities, both great and small. At
child. Within a few years, she had a total of seven children. Her husband was a wage earner and with such a large family,
instability within their family, Noor moved out of the house with her seven children to raise them on her own. She was not
her children, especially in regards to their education.
A financially independent Noor, with the assets she received from BRAC.
NOOR BANO: From ultra-poor to entrepreneur
“I was very much dependent on my husband to provide for me and our family. I never thought I could make an
independent, but the TUP programme has given me a lifeline and hope when I had none.”
Targeting the Ultra-Poor
16 Annual Report 2011
BRAC across the world
Annual Report 2011 17
Functional education
Life skills development education for adults that helps to build solidarity, create a savings mentality and prepare people for new income generation
Para-professionals
Pioneering models for vaccinators, community health workers and ‘barefoot lawyers’ that provide incentive based jobs for those ready to serve their own communities
Harnessing the Past: Our innovations in the last four decades
Homemade oral rehydration solution campaign
A groundbreaking campaign in which 13 million households in Bangladesh learned how to make oral saline at home – a lesson that continues to save millions of lives from diarrhoea
Incentive salary system
A result oriented incentive package that measures effectiveness of and compensates our community workers and volunteers accordingly
Education for dropouts and non entrants
Our own primary schools that help disadvantaged children make successful transitions to formal schools
Enterprises for value chainsupport
An integrated network of our development programmes, enterprises and investments that result in a unique synergy that supports our holistic approach for alleviating poverty
Directly observed treatment (DOT) for TB control
An effective treatment method for tuberculosis, a result of our incentive based salary system for community health workers, ensuring patients’ daily intake of medicine for six months or more
Credit ++ approach
An integrated set of services for the landless poor, marginal farmers and small entrepreneurs working together to strengthen the supply chain of the enterprises in which our microfinance borrowers invest
Village organisations (VOs)
The most effective medium for catalysing change in disadvantaged communities
18 Annual Report 2011
Pre primary schools
Our own pre primary schools where we prepare underprivileged children to enter mainstream primary schools
Birthing huts
Safe and culturally accepted childbirth places with appropriate services for mothers in urban slums
Hybrid maize
A pioneer venture to commercialise corn harvesting, which plays a key role in making farmers shift from traditional single cropping to multiple cropping to maximise land usage during idle seasons
Popular theatre
A traditional platform became an effective communication medium to advocate for social changes in rural communities, particularly to the illiterate
Unique management model
A unique management model that focuses on internal control without suffocating creativity, runs our large scale interventions cost effectively, and enables us to constantly learn from the communities we serve across the world
We transformed over 2,000 rural poor into entrepreneurs with an innovative livelihood opportunity: providing fee based ‘door to door’ artificial insemination and education services for livestock farmers
M-health services
A mobile based platform that community health workers use to collect data and provide a range of real time automated services such as storing patient records, categorising and assessing medical risks, prioritisingmedical responses and monitoring referrals
Empowerment and livelihood for adolescents
A range of initiatives to empower adolescents including skills training, social development and micro-loans for their future businesses.
Adolescent clubs
Safe spaces where peer driven intervention for adolescents enhance their personal growth and social skills
Sharecroppers scheme
A phenomenal initiative to offer soft loans for tenant farmers (sharecroppers) with a specially tailored recovery plan
Challenging the frontiers of poverty reduction
A unique model focusing on extremely deprived women to improve their economic and social situations, allowing ultra poor households to graduate from extreme poverty and enter mainstream development programmes
Annual Report 2011 19
20 Annual Report 2011
Governance
Tanwir RahmanDirector, Finance, BRAC and BRAC International
Previously, Mr. Rahman was the Divisional Controller for HBG (Hollandsche Beton Groep) Royal BAM, Assistant Controller for Mitchell engineering, Senior Project Accounting Manager for Bovis Lend Lease. Before joining BRAC he worked as Controller for Allied Container System.
Sir Fazle Hasan AbedFounder and Chairperson, BRAC
Sir Fazle is recognised by Ashoka as one of the “global greats” and is a founding member of its prestigious Global Academy for Social Entrepreneurship. He was also appointed Knight Commander of the Most Distinguished Order of St. Michael and St. George (KCMG) by the British crown in 2010 in recognition of his services to reducing poverty in Bangladesh and internationally. He has received numerous national and international awards for his achievements in leading BRAC, including WISE Prize – the world’s first major international prize for education by Qatar Foundation (2011), the David Rockefeller Bridging Leadership Award (2008), the Conrad N. Hilton Humanitarian Prize (2008) – the world’s largest humanitarian prize, the Inaugural Clinton Global Citizen Award (2007), the Henry R. Kravis Prize in Leadership (2007)
Dr. Mahabub HossainExecutive Director, BRAC and BRAC International(Ex-officio)
A renowned agriculturaleconomist, Dr. Hossainis former head of SocialSciences Division ofthe International RiceResearch Institute(IRRI), Philippines andformer director Generalof the BangladeshInstitute of DevelopmentStudies (BIDS). Hewas awarded thefirst Gold Medalfrom the BangladeshAgricultural EconomistAssociation in 1985,in recognition ofoutstanding contributionto understandingthe operation ofrural economy inBangladesh.
Muhammad A. (Rumee) AliManaging Director, BRAC (Ex-officio)
Mr. Rumee is the vice chairmanof BangladeshAssociation of Banksand a member ofthe Global SteeringCommittee ofthe ‘PerformanceBased Grants Initiative’of the InternationalFinance Corporationand the TechnicalAdvisory Committee ofBangladesh InvestmentClimate Fund. Heserved as the deputygovernor of BangladeshBank, and countryhead and generalmanager of GrindlaysBangladesh. He wasappointed the CEO ofthe Standard CharteredGroup in Bangladesh,heading both StandardChartered Bank andStandard CharteredGrindlays Bank. He alsoserved as a member ofthe Governing Body ofPKSF.
S.N. KairyCFO, BRAC Group
Mr. Kairy joined the Accounts Section of BRAC in April 1982. He is responsible for ensuring the effective Procurement and Asset Management of BRAC Group. Currently, Mr. Kairy is serving on the board of BRAC Bank Limited as a Director nominated by BRAC. He is also the Chair of the Board Audit Committee of BRAC Bank Limited.
Annual Report 2011 21
Management
Development Partners
Muhammed Faridur Rahman Chief Executive Officer and Country Representative
Md.Zinnur Rahman Programme Manager, Microfinance
Dr. Muhammad Umar Farooqui Project Manager, Health
Ulfat Mehmood Khan Project Manager, Education
Md. Wazedul Islam Pahlowan Project Manager, CFPR-TUP
Ghulam Ahmed Country Head, Accounts
Md. Nazrul Islam Talukdar Country Head, Monitoring & Investigation
Md. Golam Sorwaor Country Head, Internal Audit
Major (Retd) Syed Muhammad Feroz Shah Manager, Communication & SecurityTI(M)
Side-Al-Fahad Programmer, IT Mohamamd Emdad Hossain Financial Analyst
Service charges onmicrocredit receivables 314,052,242 3,633,602 208,208,346 2,472,783
Transfer from restricted grant 14 97,443,800 1,127,432 115,372,550 1,370,223 Deferred grant recognised as income 11 3,454,243 39,966 1,972,634 23,428 Admission fee from group members 3,441,201 39,815 2,860,792 33,976 Sale of passbooks 567,723 6,569 960,306 11,405 Interest on bank deposits 8,060,545 93,261 9,692,845 115,117 Other income 564,957 6,537 1,203,455 14,293 427,584,711 4,947,182 340,270,928 4,041,225
Adjustments for:Depreciation charge for the year 4 5,965,360 69,020 4,056,415 48,176 Provision against microcredit receivables 5.2 35,187,767 407,124 26,289,028 312,221
Interest on short term loans 18 95,556,240 1,105,591 79,858,880 948,443
Working capital changes:(Increase) / decrease in current assets
Other receivables - - 15,924,827 189,356
Increase / (decrease) in current liabilities
Interest and service charges received 319,202,971 3,696,776 217,366,648 2,530,808
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of property and equipment - - 1,976,805 23,477
CASH FLOWS FROM FINANCING ACTIVITIES
Contribution received from BRAC group companies 10 - - 170,643,000 2,033,886 Short term loans received during the year 15 916,800,000 10,607,429 949,000,000 11,311,085
Cash and cash equivalent at beginning of the year 421,357,799 5,022,144 470,914,470 5,599,459
Total comprehensive income (78,568,546) (909,042) - - 18,706 (78,568,546) (890,336)
As at 31 December 2011 (219,022,871) (2,683,778) 170,643,000 2,033,886 112,039 (48,379,871) (537,853)
__________________ _____________ ____________
1. STATUS AND OPERATIONS
to the Company on 04 February 2008.
2. BASIS OF PREPARATION
under the Companies Ordinance, 1984, provisions of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail.
2.3 Functional and presentation currency
been rounded off to the nearest Rupees.
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
follows:
2.4.1 Property and equipment
The Company reviews the useful lives and residual value of property, plant and equipment on a regular basis. Any change in estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with a corresponding effect on the depreciation charge and the impairment.
The Company reviews the carrying amount of liabilities on a regular basis and appropriate amount of provision is made as and when necessary.
2.4.3 Impairment
any such indication exists, recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Impairment loss is recorded on judgmental basis, for which provision may differ in the future years based on the actual experience.
For the purpose of convenience translation:
year as quoted by the State Bank of Pakistan.
average conversion rate is the monthly average of the selling rate as quoted by the State Bank of Pakistan. The difference between average and year end exchange rates is recognized in reserves as convenience translation foreign currency reserve.
Amounts presented in foreign currencies are for the purpose of convenience only and do not necessarily represent amounts at which assets and liabilities could be realised.
3. SIGNIFICANT ACCOUNTING POLICIES
Grant received and utilized for capital expenditure is accounted for as deferred grant in balance sheet. An amount equal to the annual charge for depreciation on assets so acquired is recognized as income in the income and expenditure statement.
3.2 Property and equipment
These are stated at cost less accumulated depreciation and impairment loss, if any. The initial cost of property and equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is charged to income applying the straight-line basis using the rates as mentioned in note 4.
Maintenance and normal repairs are charged off as these are incurred. Major repairs are capitalised.
Gains and losses on disposal of assets are recognized in the year in which the asset is disposed off.
and subsequently measured at the original effective interest rate at reporting date. All microcredit receivables are recognized when cash is advanced to borrowers.
Management regularly assess the adequacy of allowance for impairment based on the age of the loan portfolio. At the year end, the Company calculates
Standard No arrear Watch list 1-30 Substandard 31-180
Doubtful 181-350Loss 350+
is not realizable due to death, dislocation of the borrower or any other natural or humanitarian disaster that affects the livelihood of the borrowers. Subsequent recoveries are credited as income in the income and expenditure statement.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
Cash and cash equivalents include cash in hand, cash at banks and short-term highly liquid investments that are readily convertible to known amounts of cash
Revenue is recognized on accruals basis.
is recognised thereafter only when it is received.
Membership fees and other charges are recognized as and when the money is received.
Other Income Other income comprises interest from short term deposits, gains less losses related to trading assets and liabilities, and includes gains from disposal of assets and all realized foreign exchange differences. Interest income on bank deposit is earned on accruals basis at the agreed interest rate with the
Grants
from restricted funds at the year end to match with the extent of expenditure incurred during a particular accounting year, grants in kind are recognized on the
3.6 Foreign currency transactions
Foreign currency transactions during the year are recorded in functional currency at the exchange rates approximating those ruling on the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange which approximate those prevailing on the balance sheet date. Gains and losses on translation are taken to income currently. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using exchange rates at the date of the initial transaction.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
3.7 Taxation
3.8 Financial instruments
to such contractual provisions of the instruments.
are short term loans, markup on loan, payable to related parties, security against microcredit receivables and accrued and other liabilities.
3.9 Impairment
any such indication exists, recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Impairment loss is recorded on judgmental basis, for which provision may differ in the future years based on the actual experience.
3.10 Stock in trade
selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The Company reviews the carrying amount of stock in trade on a regular basis and provision is made for obsolescence if there is any change in usage pattern and physical form.
required to settle the obligation and a reliable estimate can be made of the amount of provision.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
Financial assets and liabilities are set off in the balance sheet, only when the Company has a legally enforceable right to set off the recognized amounts and intends either to settle them on a net basis or to realize the assets and settle the liabilities simultaneously.
3.13 Restricted grant
every account. Restricted grant is transferred to income to the extent of expenditures incurred out of these funds in a particular accounting year.
3.14 Borrowing costs
Markup, interest and other direct charges on borrowings are capitalized to the related qualifying asset till substantially all the activities necessary to prepare the qualifying asset for its intended use are complete. All other markup, interest and related charges are charged to the income and expenditure statement.
3.15 Mark-up bearing borrowings
Mark-up bearing borrowings are recognised initially at cost being the fair value of consideration received, less attributable transaction costs. Subsequent to initial recognition, mark-up bearing borrowings are stated at their amortised cost less subsequent repayments.
The following standards, amendments and interpretations of approved accounting standards will be effective for accounting periods beginning on or after 01 January 2012:
amendment provides an exception to the measurement principle in respect of investment property measured using the fair value model in accordance with IAS 40 Investment Property. The measurement of deferred tax assets and liabilities, in this limited circumstance, is based on a rebuttable presumption that the carrying amount of the investment property will be recovered entirely through sale. The presumption can be rebutted only if the investment property is depreciable and held within a business model whose objective is to consume substantially all of the
of the Company.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
The amendments address inconsistencies in current practice when applying the offsetting criteria in IAS 32 Financial Instruments: Presentation.
considered equivalent to net settlement. This amendment may result in certain additional disclosures and presentational changes without any impact on the results of operations.
or subject to master netting agreement or similar arrangement. This amendment may result in certain additional disclosures and presentational changes without any impact on the results of operations.
interpretation requires production stripping cost in a surface mine to be capitalized if certain criteria are met. The amendments have no impact on
4. PROPERTY AND EQUIPMENT
Rupees
Cost As at 1 January 2010 5,664,423 5,925,468 2,878,088 2,161,932 - 16,629,911 Additions during the year 12,419,762 1,829,335 1,761,063 4,189,769 - 20,199,929
As at 31 December 2010 15,718,235 7,752,153 4,595,851 6,351,701 - 34,417,940
As at 1 January 2011 15,718,235 7,752,153 4,595,851 6,351,701 - 34,417,940 Additions during the year 9,165,146 1,217,396 1,847,837 6,910,120 618,000 19,758,499 As at 31 December 2011 24,883,381 8,969,549 6,443,688 13,261,821 618,000 54,176,439
Depreciation As at 1 January 2010 737,109 579,362 272,681 367,716 - 1,956,868 Charge for the year 17 1,815,117 773,964 714,933 752,401 - 4,056,415
As at 31 December 2010 1,922,620 1,351,551 949,244 1,120,117 - 5,343,532
As at 1 January 2011 1,922,620 1,351,551 949,244 1,120,117 - 5,343,532
year / adustment 17 3,365,639 894,153 657,937 1,047,631 - 5,965,360 As at 31 December 2011 5,288,259 2,245,704 1,607,181 2,167,748 - 11,308,892
Opening balance 702,521,013 8,373,315 363,183,203 4,318,468 Disbursements during the year 5.3 1,656,204,000 19,162,374 1,248,655,000 14,882,658
979,860,892 10,893,397 702,521,013 8,373,315
Opening balance 32,383,097 385,973 13,852,715 164,717 Provisions made during the year 35,187,767 407,124 26,289,028 312,221 Provision adjusted against
63,966,706 711,136 32,383,097 385,973
5.3
against personal guarantees of local community members of the borrowers. Further, the Company withholds 10% of microcredit loans disbursed to the borrowers which is settled against last installments due as disclosed in note 5.5. These receivables are repayable in 48 equal weekly installments.
2011- Gross 2010- Gross
Rupees US$ Rupees US$
Not yet due 920,800,528 10,236,804 663,172,759 7,904,324Over due by: - 30 days 6,788,566 75,470 9,910,228 118,120 - 31 to 180 days 8,405,536 93,447 13,246,404 157,883 - 181 to 365 days 1,344,409 14,946 867,089 10,335 - above 365 days 42,521,853 472,728 15,324,533 182,652
979,860,892 10,893,395 702,521,013 8,373,313
microcredit receivables considered doubtful.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
5.5 This represents amounts withheld from microcredit loans disbursed by the Company. These will be settled against last installment microcredit installments due from the borrower.
5.6on microcredit receivables. Accordingly third balance sheet has been presented in accordance with the requirements of IAS 1.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
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16. COMMITEMENTS
As at 31 December 2011, there were no capital commitments of the Company.
17. ADMINISTRATIVE AND PROGRAM EXPENSES
2011 2010 Note Rupees US$ Rupees US$
Rent expense 18,948,469 219,235 17,512,502 207,987 Utilities 8,078,755 93,472 5,613,873 66,673 Printing and stationery 5,534,228 64,031 3,773,073 44,81Travelling and transportation 22,200,994 256,867 17,251,823 204,891Depreciation 4 5,965,360 69,020 4,056,415 48,176 Training and development 8,464,922 97,940 2,271,907 26,982
Maintenance and general expenses 16,829,393 194,717 15,416,120 183,089
and management fee 14.2 32,434,121 375,265 21,547,472 255,908 Program supplies and related expenses 14.2 44,938,583 519,942 65,987,849 783,704 Professional charges 1,171,366 13,553 1,169,136 13,885Audit fee 870,716 10,074 738,320 8,769
364,288,596 4,214,842 321,319,100 3,816,142
18. FINANCIAL CHARGES
Interest on short term loans 95,556,240 1,105,591 79,858,880 948,443 Bank charges 1,509,415 17,464 775,687 9,212
97,065,655 1,123,055 80,634,567 957,655
19. TAXATION
1984.
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
BRAC PAKISTANNotes to the Financial StatementsFor the year ended 31 December 2011
20. TRANSACTIONS WITH RELATED PARTIES
statements. Transactions with related parties are as follows:
2011 2010
Rupees US$ Rupees US$
BRAC Bangladesh - Capital contribution - - 44,691,451 529,506 - Liabilities undertaken by BRAC Bangladesh from BRAC Afghanistan - - 44,793,000 533,250 - Expense incurred on behalf of the Company 23,671,016 273,875 20,753,821 232,902
BRAC Stichting International
fee for the year 32,434,121 375,265 21,547,472 145,735
Others
Remuneration to key management personnel 2,396,521 27,728 1,716,343 20,547
Chief Executive is also provided with the Company maintained car and Company maintained residence.
22. FINANCIAL INSTRUMENTS
- Credit risk - Liquidity risk - Market risk
and constructive control environment in which all employees understand their roles and obligations.
the adequacy of the risk management framework in relation to the risks faced by the Company.
22.1 Credit risk
credit risk is primarily attributable to microcredit receivables, security deposits, interest accrued, other receivables and balances at banks.
the following headings.
22.1.1 Counterparties
to manage risk in relation to these couter parties are as follows:
Microcredit receivables including interest
credit repayment timeline. The Company limits credit risk by limiting the loan up to a maximum amount and continuing to evaluate creditworthiness of loanees after transactions have been initiated. The Company controls its credit risk of micro credit advance by the following methods:
The maximum exposure to credit risk by geographic region is limited to Pakistan.
22.2 Liquidity risk
be predicted, such as natural disasters.
2011 - Rupees
Short term loans 781,191,951 819,222,461 819,222,461 - Payable to related parties 159,136,002 159,136,002 159,136,002 -Accrued and other liabilities 51,309,181 51,309,181 51,309,181 -
991,637,134 1,029,667,644 1,029,667,644 -
2011 - US$
Short term loans 8,684,735 9,107,532 9,107,532 -Payable to related parties 1,769,161 1,769,161 1,769,161 -Accrued and other liabilities 570,419 570,419 570,419 -
11,024,315 11,447,112 11,447,112 - 2010 - Rupees
Short term loans 803,966,852 856,751,765 856,751,765 -Payable to related parties 97,497,122 97,497,122 97,497,122 -Accrued and other liabilities 7,836,273 7,836,273 7,836,273 -
909,300,247 962,085,160 962,085,160 -
2010 - US$
Short term loans 9,582,442 10,211,582 10,211,582 -Payable to related parties 1,162,063 1,162,063 1,162,063 -Accrued and other liabilities 93,403 93,403 93,403 -
10,837,908 11,467,048 11,467,048 -
22.3 Market risk
change in credit rating of the issuer or the instrument, change in market sentiments, speculative activities, supply and demand of securities and liquidity
22.3.1 Currency risk
receivables and payables exist due to transactions entered into foreign currencies. The Company is exposed to currency risk on its bank balances denominated in foreign currencies, primarily US Dollars.
2011 2010
Rupees US$ Rupees US$
Bank balance 51,002 567 4,549,897 54,230
BRAC PAKISTANNotes to the Financial Statements
For the year ended 31 December 2011
2011 2010 2011 2010 Rupees Rupees Rupees Rupees
US Dollars 86.43 84.20 89.95 83.90
22.3.2 Interest rate risk
rates. Majority of the interest rate exposure arises from microcredit receivables and loans from PPAF.
