Association for Social Advancement

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The non-governmental organization based in Bangladesh which provides microcredit financing.


The association was established in 1978 by Md. Shafiqual Haque Choudhury and a team of people who were then working for other established NGOs,[1] but who themselves were arguing for a more radical way to alleviate the exploitation of rural villages caused by the 1971 Bangladesh atrocities.[2] The founding framework of ASA was aimed at empowering rural landless villagers from the “bottom up” through “people’s organizations”.[2] These were run by volunteers who advocated that a consciousness for solidarity amongst the village poor would lead to collective social action.[3] ASA has currently over 5.3 million members forming different groups with special emphasis on saving practice and 21,477 employees engaged in disbursing and collecting loans and savings deposits.[4]

For many years, ASA sought to combine social development (in health, education, nutrition, and sanitation) with credit provision, but in 1991, these were abandoned, and ASA shifted its focus solely to microcredit lending.[5] This was because they wanted to stop “donor dependence” and become specialized and financially self-sufficient. Since then, it has become a fully self-sufficient microfinance institution – operating mainly in Bangladesh, but with presence in Africa and South America.[6] ASA offers financial services to including micro-credit, small business credit, regular weekly savings, voluntary savings and life insurance – and aims to follow a simple, standardized, low-cost system of organization, management, savings and credit operations.[4]

It was initially funded by donors, then some small commercial bank loans, then low-cost loans from a subsidised wholesaler, and finally from client deposits and retained earnings. The core service has remained the low-value year-long weekly-repayment loan. ASA has not had to undergo large-scale internal reorganisation or training because the basic product and its delivery have remained largely unchanged.[7] Also, savings from clients are used to provide security against default by protecting the small loan portfolio, instead of being used in more risky ventures like raising capital.

Microfinancing model[edit]

ASA offers an alternative microfinancing model to that of the Grameen Bank. In December 2007, it placed Number 1 in Forbes Magazine’s list of the world’s top 50 microfinance institutions.[8] Grameen Bank placed Number 16, despite having won the Nobel Peace Prize 2006.[9]

Its flat interest rate was 15% (approximately 32% annual percentage rate) until July 1995, when it dropped to 12.5% at a time when micro-finance institution (MFIs) were coming under increasing criticism in the press for their prices.[10]

Internal organization[edit]

ADB describes ASA as the “Ford motor model” of microfinance” because of its standardisation of low-cost microfinance.[3] Its flat organizational structure consists of three tiers: a relatively small central office in Dhaka,[11] district offices, and branch offices. The branch offices are the main channel through which their core loan products are disbursed. These branches report to the district offices, who in turn report to the head office.[12]

Each of its 3,324[13] branches in Bangladesh is a self-sufficient unit, run by six people: a branch manager, an assistant branch manager, and four loan officers. The branch manager is allowed to approve all transactions within the branch, provided they meet the guidelines of an operating manual. Each branch is run as a profit centre, and is expected to fully recover costs between 9 and 12 months.[3]

Operating information[edit]

Up to December 2009 ASA's cumulative loan disbursement has been TK. 342,514 million (US$ 5,418 million) while loan outstanding (principal) is TK. 31,322 million (US$ 457 million) among 4 million borrowers.[citation needed] At the end of 2009 ASA's Operational Self Sufficiency(OSS) was 143.38%, Financial Self-sufficiency (FSS) 112.49% and rate of loan recovery 99.64%.[14] It has 24,021 staff serving more than 5.50 million clients.[citation needed]

Impacts on Bangladesh[edit]

A 2008 study conducted by ASA’s Research and Documentation Cell showed that ASA's Credit and Savings Program increased, among other outcomes, business capital, education, employment and sanitation.[15] In 2011, ASA, together with Grameen Bank and BRAC, accounted for 62 per cent of Bangladesh’s 18.5 million micro-borrowers and 69 per cent of the sector's gross loan portfolio.[16]

At the industry level, overall average borrower numbers and portfolios have been rising steadily, ASA’s active borrower accounts in 2008 and 2009 fell by 32 percent.[17][not in citation given] This was data was analysed as a need for ASA to diversify their products and increase their quality of service.[16]

Women are the main demographic to which ASA provide their services. In 2007, 71% of services were to women.[18] Women who belong to ASA are reported to be among the least active within community and political life.[5]


  1. ^ Stiles, K. (2002) International Support for NGOs in Bangladesh: Some Unintended Consequences. World Development. Vol. 30, No. 5, pp. 835–846.
  2. ^ a b Rutherford, S. (2009) The Pledge: ASA, Peasant Politics and Microfinance in the Development . New York: Oxford University Press.
  3. ^ a b c Meyer, R., Fernando, N. (June 2002). "ASA – The Ford Motor Model of Microfinance." (PDF). Asian Development Bank. Retrieved 2011-09-11. [dead link]
  4. ^ a b Barrès, Isabelle (July 2003). "Focus On Savings" (PDF). THE MICROBANKING BULLETIN (9). Retrieved 14 February 2012. 
  5. ^ a b Kabeer, N., Mahmud, S. & Castro, J.G.I. (June 2010) Ngo’s Strategies and the Challenge of Development and Democracy in Bangladesh. (Working Paper 2010/343). Brighton: Institute of Development Studies.
  6. ^ ASA Foundation (2008). "ASA Foundation Country Focus". Retrieved 2011-09-11. [dead link]
  7. ^ Rutherford, Stuart. "Managing Growth of MFIs: ASA Bangladesh - single-minded growth" (PDF). Retrieved 14 February 2012. [dead link]
  8. ^ Forbes (2007) (2007-12-20). "The Top 50 Microfinance Institutions". Retrieved 2011-09-11. 
  9. ^ The Nobel Prize Official Website (2011). "The Nobel Peace Prize 2006". Retrieved 2011-09-11. 
  10. ^ "Identification of Microfinance Institutions - - Bangladesh" (PDF). Retrieved 14 February 2012. [dead link]
  11. ^ Wood, G.D. & Sharif I.A. (1997) Who Needs Credit? Poverty and Finance in Bangladesh. New York: St Martin’s Press.
  12. ^ ASA Bangladesh (2008). "ASA Ornonogram". Retrieved 2011-09-11. [dead link]
  13. ^ ASA Foundation (2008). "ASA Foundation One Million More". Retrieved 2011-09-11. [dead link]
  14. ^ "ASA Bangladesh (2008)". Retrieved 14 February 2012. [dead link]
  15. ^ ASA Bangladesh (2008). "ASA's Contribution to Microfinance Sector". Retrieved 2011-09-11. [dead link]
  16. ^ a b Bangladesh Rural Advancement Committee (BRAC) (August 2011). "Bangladesh Microfinance Review". BRAC Development Institute (BDI). Retrieved 2011-09-11. [dead link]
  17. ^ Nahar, K. (26 August 2011). "Three microlenders control two-thirds of MF industry". The Financial Express, Bangladesh. Retrieved 2011-09-11. 
  18. ^ Shafiqual Haque Choudhury (2008). "Goodwill Message of ASA's president" (PDF). ASA - 30th Anniversary Newsletter. Retrieved 2011-09-11. 

External links[edit]