Recovery and Advancement of Informal Sector Employment (RAISE)
Palli Karma-Sahayak Foundation (PKSF) undertook the ‘Recovery and Advancement of Informal Sector Employment (RAISE)’ project in February 2022 jointly financed by the World Bank and PKSF. The RAISE project will facilitate employability and increase productivity of informal sector, and provide financial assistance to 175,000 low-income youths, micro-entrepreneurs and COVID-19 affected micro-entrepreneurs in urban and peri-urban areas across the country. PKSF will implement the project through its 70 Partner Organizations (POs). In addition, the project has another component on recovery and reintegration of COVID-19-affected returnee migrants which will be implemented by the Wage Earners’ Welfare Board (WEWB) under the Ministry of Expatriates’ Welfare & Overseas Employment.
Bangladesh is one the fastest growing economies in the world and forecasts suggest that the size of the economy could double by 2030. While it was primarily an agricultural economy in 1971, the composition has shifted towards industry and services over the past decades. The informal sector has become the engine of growth for sustainable development in our economy and plays an important role in employment creation. Majority (85.1%) of employed labor in the country is engaged in informal sector where females (91.8%) are more involved than the males (82.1%) (Labor Force Survey 2016-17).
The micro-enterprise (ME) has been playing a significant role in relieving hunger, ensuring good health, and building foundation for inclusive and sustainable economic growth, and sustainable industrialization. Majority of Bangladeshi youths are either employed in the informal sector or self-employed with low income and productivity. Continuous expansion of the micro-enterprise has been contributing to poverty alleviation but it needs further improvement for the sustainable growth. In order to facilitate the growth of micro-enterprise, Palli Karma-Sahayak Foundation (PKSF) initiated the Agrosor program in 2001 to offer financing support for the MEs through its Partner Organizations (POs). In continuation of this, PKSF has been providing financial and technical support to strengthen the micro-enterprises through various projects; such as Micro-Finance and Technical Support (MFTS), Finance for Enterprise Development and Employment Creation (FEDEC), Promoting Agricultural Commercialization and Enterprises (PACE), Rural Microenterprise Transformation Project (RMTP), Sustainable Enterprise Project (SEP) and Skills for Employment Investment Program (SEIP) among others.
In 2018, the World Bank in association with PKSF, carried out a Gap Analysis Study in order to identify the gaps in the services provided under the micro-enterprise programs/projects so that these could be properly addressed. From this study, it was found that the micro-enterprises in the informal sector are constrained by lack of skills of the entrepreneurs including life-skills, entrepreneurial skills and technical skills; lack of access to finance especially for the start-ups and those entrepreneurs are falling behind; use of low-technology which causes lower productivity; and substantial gender gaps in labour market outcomes among others. In addition to that, many skilled youths including females prefer to be self-employed; however, due to lack of business knowledge and start-up capital constraints they are unable to do so. The need for targeted labour market programs for those in the informal sector, especially urban and peri-urban youth, has been made more urgent by the recent COVID-19 crisis, due to the urban and peri-urban informal sector being disproportionately affected by the COVID related shocks. In this context, PKSF undertook the ‘Recovery and Advancement of Informal Sector Employment (RAISE)’ Project in February 2022 jointly financed by the World Bank and PKSF. The RAISE project will facilitate employability and increase productivity of informal sector, and provide financial assistance to 175,000 low-income youths, micro-entrepreneur and COVID-19 affected micro-entrepreneurs in urban and peri-urban areas across the country. PKSF will implement the project through its 70 POs. In addition to this, the RAISE project has another component on recovery and reintegration of COVID-affected returnee migrants which will be implemented by the Wage Earners’ Welfare Board (WEWB) under the Ministry of Expatriates’ Welfare & Overseas Employment.
*This component is being solely implemented by WEWB
**This component is being implemented jointly by PKSF and WEWB
Objective: The overall objective of the project implemented by PKSF is to enhance the access to earning opportunities for low-income youth, including COVID-affected youth in urban and peri-urban areas.
Project Duration: 5 years (2022-2026)
|Total Fund||US$ 250 million|
|The World Bank||US$ 150 million|
|PKSF||US$ 98.32 million|
|POs||US$ 1.68 million|
|Target Participants||Total Number of Participants|
|COVID-affected micro-entrepreneurs receiving microfinance support||50,000|
|Low-income youth and micro-entrepeneurs accessing business management track*||90,000|
|Low-income youth accessing apprenticeship track*||35,000|
*35% of participants under this category will be female
Youths from disadvantaged groups, e. g. Dalit; ethnic minorities; inhabitants of char, haor, hill tracts, tea estate and coastal areas; and persons with disabilities will get priority to be enrolled in this project.
Economic Inclusion Programs under the RAISE Project The project aims to enhance economic inclusion of low-income youth and micro-entrepreneurs in urban and peri-urban areas. The services include skill-acquisition through informal apprenticeship, business management training, and access to credit, among other interventions. The project participants are low-income, less educated youth living in urban and peri-urban areas. The potential path of a participant for the economic inclusion program can be illustrated as follows.
Services to be Provided through this Project:
|Target Participants||Major Services/Tasks||Details||Selection Criteria|
|COVID-affected micro-entrepreneurs 50,000||
||o Average loan size: BDT 100,000 o Reduced service charge for Agrosor-RAISE loan: 18% (declining method)||© Partial or full shutdown of enterprise due to COVID-19 related lockdown for at least 4 weeks; or © Irregular repayment of loan installment due to COVID-19 (two missed repayments in a quarter); or © Reduced the number of workers due to COVID-19 (equivalent to at least 10 percent of staff); or © Inability to cover rent and staff salaries twice in one quarter © Did not receive any enterprise-level financial support from PKSF-funded programs or GoB for COVID-related impacts. To be eligible, the micro-entrepreneur has to be an existing borrower of the respective PO before February 2020|
||o Training duration: 3 days/12 hours o Stipend for training participants|
|Youth and micro-entrepreneurs from low-income households 90,000||
||o Average loan size: BDT 116,500 o Reduced service charge for Agrosor-RAISE loan: 18% (declining method)||© Age: 15* to 35 © Have a Primary School Certificate (PSC), and not have educational attainment greater than Higher Secondary Certificate (HSC), or its equivalent © Household income no more than BDT 20,000 © Resides in urban or peri-urban area © Have a minimum of 2 years of experience in self-employment © Own and operate an income generating activity (IGA) or micro-enterprise © Employ or intend to employ at least 1-2 persons, either part or full-time © Have total capital investment (excluding land & building/house) not exceeding BDT 700,000 Age and educational requirements can be waived for women and members of disadvantaged communities. *To be eligible for inclusive finance, minimum age has to be 18|
||o Training duration: 12 weeks/96 hours; 2 days a week; 4 hours a day o Stipend for training participants|
|Youth from low-income households 35,000||
||o Training duration: 6 months o Stipend for apprentices o Stipend for Recognition for Prior Learning (RPL) test (10% of the participants under this category)||For Apprentices: © Age: 15* to 35 © Have a Primary School Certificate (PSC), and not have educational attainment greater than Higher Secondary Certificate (HSC), or its equivalent © Household income no more than BDT 20,000 © Resides in urban or peri-urban area Age and educational requirements can be waived for women and members of disadvantaged communities. *To be eligible for inclusive finance, minimum age has to be 18|
||o Average loan size BDT 116,500 for Apprenticeship trainee o Reduced service charge for Agrosor-RAISE loan: 18% (declining method)|
|Master Craftsperson (MCP) for Apprenticeship Program under the RAISE Project: 7000 MCPs will be eligible for receiving inclusive finance at reduced service charge of 18% to expand their business. The average loan size will be BDT 129,600 per MCP. Each MCP will also receive a stipend of BDT 1,500 per month per apprentice hosted. The selection criteria for the MCPs are as follows: © Age: minimum 25 years © Have minimum 5 years of relevant experience © Have a Junior School Certificate (JSC) © 1 to 3 apprentices can work together in the enterprise © The working environment has to be hygienic and decent © Enterprise type: listed trade under this project © Willingness and capacity to follow project guidelines (Gender policy, OHS guideline, social & environmental guideline & GRM policy)|
Major Features of the Economic Inclusion Program
Risk Management and Business Continuity Training and Inclusive Finance for COVID-affected Micro-entrepreneurs: COVID-affected micro-entrepreneurs who were previous borrowers of the PO and are in need of financial assistance will receive inclusive finance on easy terms under the project to restore their enterprise/business. In order to develop the capacities of these micro-entrepreneurs, they will be provided training on Risk Management and Business Continuity. Informal sector micro-entrepreneurs are exposed to various risk factors including man-made and natural disasters but do not usually have the capacity to deal with those. Through this training, the micro-entrepreneurs will learn how to incorporate risk management, coping, and business continuity in the event of a shock. This will help the local youth build their capacities to secure sustainable employment for themselves which will, in turn, help them to support their families and contribute to national economy.
Business Management and Entrepreneurship Development Training and Inclusive Finance: 85.1% of total labour force is engaged in the informal sector (Labour Force Survey 2016-17). Taking into account the importance of this sector, PKSF will provide training on Business Management and Entrepreneurship Development to young micro-entrepreneurs who are lagging behind in order to develop their capacities on Risk Management & Business Continuity, Life-skills Development, Generic Business Management and Occupation specific Technical Skills Development. These young micro-entrepreneurs will also be eligible to receive inclusive finance for the expansion of their business.
Apprenticeship Program: “Ustad-shagrid” system is a centuries old system of transferring skills from generation to generation and is mutually beneficial for both ustads (masters) and shagirds (apprentices). Under this project, youth from low-income households will be matched with skilled and experienced Master Craftsperson (MCP) selected by the POs according to the eligibility and selection criteria to host an apprentice. The apprentice will receive on-the-job training under the MCP and will also receive Life-skills Development training from a skilled trainer in order to develop his/her capacity to ensure sustainable wage employment. 10% of the apprentice trainees will also receive inclusive finance as start-up fund to start a new business/enterprise.
Case Management System: A Case Management System (CMS) software will be developed to organize and store collection of data which will include contact, demographic and employment details of the program participants, program schedule, batch schedule and history, billing info, human resources and other necessary information required for the project. This will help capture the progress of the youth engaged in the Apprenticeship Program and their milestones.
Psychometric Profiling: Psychometric Profiling is the process of understanding an individual’s personality, behavioural style, and reasoning skills using a data-directed objective and structured approach. The main aim of using psychometric profiling in RAISE project is to ascertain an entrepreneur’s entrepreneurial ability and creditworthiness, i.e., personality traits, aptitude, attitude, intelligence, motivation, etc. related to business development. Proper application of this tool can be effective in providing start-up capital loan to new entrepreneurs and microenterprise loans to the established micro-entrepreneurs. The POs have been using various methods to determine the creditworthiness of the potential borrowers which is mostly based on the judgement of the lender. The Psychometric profiling, on the other hand, lends a data-driven approach to screening by providing a comparative view of all entrepreneurs.
RAISE Project Activities: Till July 2022
Up to 30 June 2022, PKSF has disbursed BDT 175 crore (1,750 million) under this project to 45 POs in order to provide 17,500 COVID-affected micro-entrepreneurs access to inclusive finance in the fastest possible time.
Up to 31 July 2022, BDT 63.3107 (633.107 million) crore has been disbursed by 45 POs among 4,079 COVID-19 affected micro-entrepreneurs.
The World Bank’s Implementation Support Mission
The World Bank conducted an ‘Implementation Support Mission’ from 20-30 June, 2022. The World Bank’s representatives had meeting with PKSF’s Managing Director Dr. Nomita Halder ndc, Additional Managing Director Md. Fazlul Kader and RAISE Project officials during this mission. Furthermore, the mission visited BASTOB-Initiative for People’s Self Development, one of the POs for the RAISE Project and their microenterprise program located at Atibazar and Kholamora in Keraniganj Upazila, Dhaka, in 23 June to observe the preparation for loan disbursement for the COVID-19 affected micro-entrepreneurs at the field level. Senior Economist & Task Team Leader of the RAISE Project Mr. Syud Amer Ahmed, Senior Social Protection Economist & Co-Task Team Leader Ms. Aneeka Rahman, RAISE Project Coordinator and other officials from the World Bank, RAISE Project as well as PKSF participated in the field visit.
Field visit to BASTOB-Initiative for People’s Self Development to observe the preparations for loan disbursement to COVID-19 affected micro-entrepreneurs under RAISE project
The RAISE Project: Through the Lens
RAISE Project Agreement Signing on 27 October 2021
Orientation on RAISE Project and Loan Policy of Covid-19 affected micro-entrepreneurs for the senior officials and regional and branch managers of different POs
COVID-19 affected micro-entrepreneurs who received Agrosor-RAISE loan Photo Credit: PMU
RAISE PMU Team Members
PKSF has formed a Project Management Unit (PMU) that is responsible for overall management of the project, capacity development of PIU and POs and monitoring the project activities along with the micro-finance program department of PKSF on a regular basis.
|1||Dilip Kumar Chakravorty||Project Coordinatorfirstname.lastname@example.org|
|2||Golam Gilane||Deputy Project Coordinator (Enterprise Development)||email@example.com|
|3||S M Khaled Mahfuz||Deputy Project Coordinator (Training & Skills Development)||firstname.lastname@example.org|
|4||Quazi Moshrur-Ul-Alam||Program Manageremail@example.com|
|5||Anjuman Ara Begum||Program Managerfirstname.lastname@example.org|
|6||Md. Faruk Hossain||Program Manageremail@example.com|
|7||Md. Faizul Tarique Chowdhury||Program Managerfirstname.lastname@example.org|
|8||Md. Shahinur Rahman||Environment Specialistemail@example.com|
|10||Md Al Amin||Procurement Specialistfirstname.lastname@example.org|
|11||Md. Dewan Zinnah||Social Development Specialistemail@example.com|
|12||Md. Jahirul Islam||Program Officer (Case Mangement)||firstname.lastname@example.org|
|13||Shehreen Saba||Program Officer (Communication & Knowledge Management)||email@example.com|
|14||Suma Saha||Accounts Officerfirstname.lastname@example.org|
|15||Md. Atiqur Rahman||Assistant Accounts Officeremail@example.com|
|16||Anamika Laskar||Assistant Accounts Officerfirstname.lastname@example.org|
|17||Sharmin Sultana||Assistant Accounts Officeremail@example.com|
|18||Md. Samsuddin Khan||Assistant Officer (Admin & Logistics)||firstname.lastname@example.org|