Despite significant and breakthrough work in pioneering access to finance (A2F) for the poor in Bangladesh, such services remain scarce in remote locations such as the chars. Traditionally, financial actors have been unwilling to extend their services to the chars due to high transaction costs, lack of information and poor intermediation functions. This left char farmers with very limited options and bargaining power, and often they would have to settle for loans from local money lenders who charged extortionate rates.

Lack of access to appropriate microfinance (and to formal financial institutions) in the chars was a significant obstacle to the continued evolution, growth and expansion of businesses that CLP has supported and helped to grow as part of its market-based projects.

In an effort to help tackle this issue, CLP teamed up with Making Markets for the Jamuna, Padma, and Teesta Chars (M4C) and United Finance Limited (UFL). CLP, with the help of its partners, is expanding the reach of a new loan product to the chars. The aim is to provide loans to 14,590 char-based borrowers across CLP and M4C working areas in six Districts over four years. A total of BDT 642 million has been allotted for loan distribution.

CLP’s new A2F case study discusses CLP’s market-based interventions, developing and piloting the new seasonal loan product tailored for the chars, the building blocks needed for systemic changes, and lessons learnt. The full study can be accessed here.