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“I am not sure if I can repay more loans, and I don’t want to be overburdened by debt.” That was how Noyon, a small grocery shop owner with a physical disability, replied when BRAC asked whether he would like to take a loan to expand his business.
This is a common response we hear from clients with disabilities when they’re offered credit products. Many prefer to avoid taking loans unless absolutely necessary. They guard their reputations closely against a society that sees persons with disabilities as less capable, and defaulting on a loan is not a risk they are willing to take. This insight raises an important question with regard to the financial inclusion of persons with disabilities: Is access the biggest barrier?
In 2015, BRAC scaled up its Engaging People with Disabilities project with ADD International, an organisation that focuses on campaigning for equal rights and ensuring social justice for people with disabilities. The objective of this partnership is to leverage the access and coverage that ADD International has with people with disabilities in Bangladesh and provide financial services (eg, savings, loans, insurance, etc) to interested beneficiaries. As of May of this year, the project has a client base of over 7,000 people with disabilities, with an average loan size of USD 282 and a repayment rate of 100 per cent. Clients are saving on a regular basis, with an average saving account balance of USD 50. The majority of the clients are entrepreneurs—they own and operate grocery shops, tea stalls, small vending businesses, and the like.
One objective of BRAC is to empower all clients by building their financial capabilities. A by-product we see in many of our clients from this pursuit is, on top of enhancing their knowledge about financial management, it raises their confidence and self-respect. Commentary on the lack of financial services available to people with disabilities often cites financial services providers’ reluctance to have them as clients. Furkan, a client with a disability and owner of a small tea stall, expressed his thoughts about BRAC’s initiative: “It’s a good start since it provides access to financial services with the backing of a well-known organisation! I think it is a step towards getting positive attention from society not as a disabled person but rather as a potential client. However organisations need to understand the needs of disabled people because not everyone wants to be an entrepreneur…those who want to support us need to provide options, opportunities, and skills training so that we can choose according to our needs.”
These are real concerns from an organisational or service delivery perspective and need to be addressed to enable more people to benefit from access to financial services. For example, BRAC is hoping to prioritise people with disabilities in its new skills training initiative.
While progress has been made in Bangladesh in terms of extending access, full financial inclusion of people with disabilities requires skills training and financial literacy that enhance their ability to understand financial products and use them most productively. Currently, both financial service providers and persons with disabilities are losing out. BRAC’s preliminary experience demonstrates that financial inclusion for people with disabilities is within reach.
There is no reason why this group shouldn’t become a fully integrated and highly-productive part of providers’ clientele. For more on developing services to best fit client needs, the research and development unit of the BRAC Microfinance programme has developed similar projects to address clients’ needs like credit shield insurance, medical treatment loan, and many more.
Alvina Zafar is a deputy manager at financial education and client protection unit of BRAC’s microfinance programme.
Originally posted on the Center for Financial Inclusion Blog.