Sociology Mind
2011. Vol.1, No.2, 36-44
Copyright © 2011 SciRes. DOI:10.4236/sm.2011.12005
Social Exclusion in Non-Government Organizations’ (NGOs’)
Development Activities in Bangladesh
M. Rezaul Islam1, Koyela Sharmin2
1Institute of Social Welfare and Research, University of Dhaka, Dhaka, Bangladesh;
2Theatre Activist Ain o Salish Kendra (ASK), Lalmatia, Dhaka, Bangladesh.
Received February 4th, 2011; revised February 13th, 2011; accepted February 14th, 2011.
This paper explores the nature and causes of social exclusion of the NGOs’ activities in Bangladesh. Data gath-
ered from two NGOs (Proshika and Practical Action Bangladesh) working for the socio-economic development
in Bangladesh. The paper shows that now a day the NGOs’ target groups and services have been specified to the
people who are able to return back their micro-credit. As a result many people are now being excluded from
NGO services who are known as ‘ultra poor’. The findings of this paper show that many blacksmiths and gold-
smiths were out of services from both NGOs rather the NGOs selected purposeful target groups, replicate of
program, and their short-term development approach, high-flying profile, rent seeking attitude, monolithic de-
velopment approach, lack of accountability, complex loan procedure and high interest rate, and cut-off budget
from their development project were helpful for such kind of social exclusion. The paper argues that that without
inclusion of such groups of people, the overall socio-economic development would not be possible.
Keywords: Social Exclusion, Social Inclusion, NGOs, Development, Bangladesh
Introduction
This paper looks the nature and causes of social exclusion of
the NGOs’ activities in Bangladesh. The research reported in
this article selected two programs from two leading NGOs in
Bangladesh: the Markets and Livelihoods Program (MLP) of
Practical Action Bangladesh (PAB) and the Small Economic
Enterprise Development (SEED) program of Proshika. The
study further selected two groups of people, blacksmiths (MLP)
and goldsmiths (SEED), from two communities served by those
NGOs. The article argues that most of the NGOs in Bangladesh
are included those people as target groups who are capable to
return back their credit and the people who are not being ex-
cluded. As a result a huge number of people are now out of the
NGO services who are known as ‘ultra poor’. The findings of
this paper show that there are many blacksmiths and goldsmiths
in those projects areas who were excluded from both NGOs
services rather the NGOs selected purposeful target groups,
replicate of program, and their short-term development ap-
proach, high-flying profile, rent seeking attitude, monolithic
development approach, lack of accountability, complex loan
procedure and high interest rate, and cut-off budget from their
development project were helpful for such kind of social exclu-
sion. The paper argues that without inclusion of such groups of
people, the overall socio-economic development would not be
possible.
Social Exclusion and Social Inclusion in Development
The term ‘social exclusion’ is relatively recent origin in the
development studies (Bynner, 1998) and the meanings associ-
ated with it have evolved quickly. From use as a synonym of
poverty through the 1960s and 1970s (Gauthier, 1995) to broad,
relational analyses of the exclusionary forces in social structure
and power, there is a wide gamut of thought on many of the
numerous aspects of social exclusion. It is because the vision of
a society in this 21 centuries has been outlined as: a society
which would be characterized by a economic vibrancy; ensured
basic needs of all citizens; participatory democracy; social jus-
tice; women’s rights and equal opportunities; good governance
based on rule of law, transparency, and accountability; guaran-
teed human rights for all; non-communal and progressive social
framework; and a pollution free natural environment (Ahmad,
2009). In this perspective, the term ‘social inclusion’ with so-
cial exclusion becomes an important concept in the world.
Social exclusion is a ‘process through which individuals or
groups are wholly or partially excluded from the society in
which they live in’. The socially excluded are not a homoge-
nous group — they consist of many different groups, hierarchi-
cal as well as horizontal (Ahmad, 2009). The DFID (2005) also
describes this as a process by which certain groups are system-
atically disadvantaged, because they are discriminated against
on the basis of their ethnicity, race, religion, sexual orientation,
caste, descent, gender, age, disability, HIV status, migrant
status or where they live. Here discrimination occurs in public
institutions, such as the legal system or education and health
services, as well as social institutions like the household, and in
the community. On the other hand, Raphael (2004) broadly
describes this both the structures and the dynamic processes of
inequality among groups in society which, over time, structure
access to critical resources that determine the quality of mem-
bership in society and ultimately produce and reproduce a com-
plex of social outcomes. Here he considers social exclusion
both as process and outcome.
Kabeer (2006) focuses on the multiple and overlapping as-
pects of disadvantage not captured by conventional approaches

M. R. ISLAM ET AL. 37
to poverty with their concentration on economic disadvantage
and shortfalls in the satisfaction of basic needs. He agrees with
the statement of the DFID (2005) that the spatial dimension of
poverty thus reflects not only economic or resource deprivation
but also identity-based discrimination: it is usually culturally
devalued and economically impoverished groups that inhabit
physically deprived or marginalised spaces. Saloojee (2001:2)
explains this concept from more social angel that the concept is
highly compelling because it speaks the language of oppression
and enables the marginalized and victimized to give voice and
expression to the ways in which they experience the driving
forces of our society. It is very much a lived experience that
occurs in many different settings and affects, such as street
children, former prisoners, single parents, ethnic minorities and
more. It can occur as a result of an equally wide variety of fac-
tors, including unemployment, poor health, a lack of education
or affordable housing, racism, fear of differences or political
disempowerment (Guildford, 2000:4).
Saloojee (2001:2) has identified multiple and varied sources
of exclusion including:
 Structural/economic (iniquitous economic conditions;
low wages, dual and segregated labour markets; etc.);
 Historical oppression (colonialism);
 Discrimination;
 The absence of legal/political recognition;
 Institutional/civic non acceptance;
 Self-exclusion.
On the other hand, inclusion is a term that is familiar to most
people in their everyday lives – we feel included, or excluded,
for example, from family, neighbourhood, or community ac-
tivities (Shookner, 2002). But social inclusion is even more
than participating and feeling valued; it is also having what is
needed materially and socially to live comfortably (Maritime
Centre of Excellence for Women’s Health, 2000). The Cana-
dian Council on Social Development, drawing on the work of
Amartya Sen, sees an inclusive society as characterized by a
widely shared social experience and active participation, by a
broad equality of opportunities and life chances for individuals
and by the achievement of a basic level of well-being for all
citizens (Jackson, 2001).
In broader perspective social inclusion means that everybody
must be equitably included, and nobody excluded. That is, the
inclusive social transformation process must ensure every-
body’s equitable participation in its constituent sub-processes –
economic, social, political, environment, and so on (Ahmad,
2009). Inclusion is about society changing to accommodate
difference, and to combat discrimination. It sees society as the
problem, not the person. To achieve inclusion, a twin track
approach is needed:
 Focus on the society to remove the barriers that exclude.
(mainstreaming)
 Focus on the group of persons who are excluded, to build
their capacity and support them to lobby for their inclu-
sion.
Inclusive Development therefore is the process of ensuring
that all marginalized/excluded groups are included in the deve-
lopment process (IDDC Paper, undated).
The Laidlaw Foundation in Canada has done extensive work
on the subject of social inclusion and mentions the following
characteristics:
 Social inclusion is about making sure that all people par-
ticipate as valued members of society, rather than just
bringing people on the outside ‘in’.
 It is a normative concept (i.e. value-based) rather than a
descriptive term. It is a way of ‘raising the bar’ – of un-
derstanding where we want to be and what needs to
change. It helps to guide the development of forward-
looking indicators, rather than merely documenting
‘what’s wrong.’
 It suggests a transformative agenda that points to the
changes that are necessary in public policies, attitudes
and institutional practices.
 Social inclusion requires more than the removal of barri-
ers. It requires investments and actions to bring about the
conditions of inclusion (Freiler, 2001:2).
It is more than a critique of oppression, injustice, discrimin-
ation and the other systemic factors that lead to social exclusion.
It promotes a transformative agenda that aims to eliminate the
barriers to full social and economic participation and create a
more just and equitable world. Social inclusion, therefore, has
value on its own as both a process and a goal; it is about under-
standing where we want to be and how to get there. Saloojee
(2001:7-8) suggests that social inclusion moves beyond an ex-
clusion framework in a number of fundamental respects. He
notes:
 Social inclusion is the political response to exclusion.
Most analyses of racism and sexism, for example, focus
on the removal of systemic barriers to effective participa-
tion and focus on equality of opportunity.
 Social inclusion is proactive. It is about anti-discrimina-
tion. It is not about the passive protection of rights, it is
about the active intervention to promote rights and it
confers responsibility on the state to adopt policies that
will ensure social inclusion of all members of society
(not just formal citizens, consumers, taxpayers).
 Social inclusion, by virtue of the fact that it is both proc-
ess and outcome, can hold governments and institutions
accountable for their policies. The yardstick by which to
measure good government becomes the extent to which it
advances the well-being of the most vulnerable and most
marginalized in society.
 Social inclusion is about advocacy and transformation. It
is about the political struggle and political will to remove
barriers to full and equitable participation in society by
all.
 Social inclusion is embracing. It posits a notion of de-
mocratic citizenship as opposed to formal citizenship.
Democratic citizens possess rights and entitlements by
virtue of their being a part of the polity, not by virtue of
their formal status (as immigrants, refugees or citizens).
Shookner’s Inclusion Lens (2002) identifies (Table 1) some
of the elements of exclusion and inclusion and the different
dimensions in which they operate: cultural, economic, func-
tional, participatory, physical, political, relational, and struc-
tural.
Social Exclusion, Poverty and NGOs in Bangladesh
The relationship between social exclusion and poverty is well
recognized in development studies. Both concepts are getting
more popular to the developing countries, especially in Africa

M. R. ISLAM ET AL.
38
Table 1.
An inclusion lens: workbook for looking at social and economic exclusion and inclusion.
Elements of Exclusion Dimensions Elements of Inclusion
Disadvantage, fear of differences, intolerance, gender
stereotyping, historic oppression, cultural deprivation. Cultural Valuing contributions of women and men to society, recognition of differ- ences, valuing diversity, positive identity, anti-racist education.
Poverty, unemployment, non-standard employment,
inadequate income for basic needs, participation in
society, stigma, embarrassment, inequality, income
disparities, deprivation, insecurity, devaluation of care
giving, illiteracy, lack of educational access.
Economic
Adequate income for basic needs and participation in society, poverty eradi-
cation, employment, capability for personal development, personal security,
sustainable development, reducing disparities, value and support care giving.
Disability, restrictions based on limitations, overwork,
time stress, undervaluing of assets available. Functional Ability to participate, opportunities for personal development, valued social roles, recognizing competence.
Marginalization, silencing, barriers to participation,
institutional dependency, no room for choice, not
involved in decision making.
Physical
Access to public places and community resources, physical proximity and
opportunities for interaction, healthy/supportive environments, access to
transportation, sustainability.
Denial of human rights, restrictive policies and leg-
islation, blaming the victims, short-term view, one
dimensional, restricting eligibility for programs, lack
of transparency in decision making.
Political
Affirmation of human rights, enabling policies and legislation, social pro-
tection for vulnerable groups, removing systemic barriers, will to take action,
long-term view, multi-dimensional, citizen participation, transparent decision
making.
Isolation, segregation, distancing, competitiveness,
violence and abuse, fear, shame. Relational Belonging, social proximity, respect, recognition, cooperation, solidarity, family support, access to resources.
Discrimination, racism, sexism, homophobia, restric-
tions on eligibility, no access to programs, barriers to
access, withholding information, departmental silos,
government jurisdictions, secretive/restricted commu-
nications, rigid boundaries.
Structural
Entitlements, access to programs, transparent pathways to access, affirmative
action, community capacity building, interdepartmental links, inter-govern-
mental links, accountability, open channels of communication, options for
change, flexibility.
Source: Shookner (2002:5).
and South Asia. It is because majority of their populations are
finding that the remaining minority (sometimes called the ‘last
10 percent’, though it might be more or fewer based on the
country), are a ‘hard to reach’ category, not responsive to gen-
eral ‘pro-poor’ policies. In Bangladesh, there are approximately
23,000 NGOs (non-government organizations) working with a
number of activities for these disadvantaged people in order to
improve their socio-economic conditions including poverty
alleviation. But it is counted that approximately 14 millions
people are ultra poor who are excluded from NGO services.
The Head Count Rate (HCR) of incidence of poverty is esti-
mated using both upper and lower poverty lines in Bangladesh.
The estimated HCR of incidence of poverty using upper pov-
erty line declined from 58.8 per cent in 1991/92 to 40.0 percent
in 2005 at national level and those using lower poverty line
declined from 42.7 percent in 1991/92 to 25.5 per cent in 2005
at national level. Both estimated HCR declined in urban and
rural areas respectively, except for those in urban areas during
the period from 1995/96 to 2000. While the poverty rates have
decreased rapidly due to the high economic growth, inequalities
in the growth are observed as well. According to the Prelimi-
nary Report on Household Income and Expenditure Survey
2005 (HIES, 2005), the inequality widened rapidly in the 1990s
and the Gini coefficients have deteriorated from 0.388 in
1991/92 to 0.451 in 2000 for national level; from 0.364 to
0.393 for rural areas; and from 0.398 to 0.497 for urban areas.
In terms of calorie intake, the incidence of poverty has im-
proved in rural areas, but has worsened in urban areas. The
number of population, which falls below a threshold calorie
intake (2,122 kilocalories per person on a dairy basis), had de-
creased by 4 per cent from 58.35 million in 1983/84 to 56 mil-
lion in 2005. The number has decreased by 40 per cent from
30.22 million in 1983/84 to 18.7 million in 2005 if the dairy
calorie intake per person of 1,805 kilocalories is applied. Fol-
lowings are reasons of the widened inequalities.
 While rural areas achieved growth based on new income
sources such as non-farm self-employment income, sala-
ried wages and remittances from abroad in the 1990s, the
extremely poor could not be benefited from those new
income sources. Therefore, inequalities have increased in
rural areas throughout the 1990s.
 In urban areas, the extremely poor are unable to fully ac-
cess to new income sources such as non-farm self-em-
ployment income, salaried wage, and remittances from
abroad and rental value of housing. Further, nearly all an-
tipoverty programs including human capital develop-
ment.
About 80 per cent of the total population lives in rural areas
in Bangladesh and the incidence of poverty is overwhelmingly
seen in rural areas. After the 1990s, the regional disparities
became apparent between the areas, which benefited from the
rapid high economic growth and those did not. The incidence of
poverty is the highest in the Western areas including Rajshahi
Division, following Khulna Division. Compared with Barisal
and Rajshahi Divisions, the poverty reduction rates are higher
in Dhaka, Chittagong and Sylhet Divisions. The rate of poverty
has slightly increased in Khulna Division (Japan Bank for In-
ternational Cooperation, 2007).
In Bangladesh, the rural development is getting less priority
for the last thirty years. In addition, as Curtin et al. (1997) ar-
gues that ‘traditional rural development’ perspectives have
generally taken for granted that rural poverty, in the sense of
economic and social peripherality, is identical with or as a re-
sult of geographical peripherality, and have sought intervene-

M. R. ISLAM ET AL. 39
tions that would make rural areas less marginal or less ‘spa-
tially excluded. Due to natural disaster and geographical loca-
tion many parts of the country are difficult to reach. Many N-
GOs’ target population are such kind of disadvantaged and
ultra-poor, but there are many causes which encourage such
kind of exclusion of the NGOs’ activities. As a result, the num-
ber of people in this group is increasing overtime. The DFID
(2005) explains how the social exclusion leads to increase pov-
erty in one hand and make obstacles in development on the
other:
Social Exclusion Causes the Poverty of Particular People,
Leading to Higher Rates of Poverty among Affected Groups
 It hurts them materially – making them poor in terms of
income, health or education by causing them to be denied
access to resources, markets and public services. It can
also hurt them emotionally, by shutting them out of the life
of their community.
 Socially excluded people are often denied the opportuni-
ties available to others to increase their income and escape
from poverty by their own efforts. So, even though the
economy may grow and general income levels may rise,
excluded people are likely to be left behind, and make up
an increasing proportion of those who remain in poverty.
Social Exclusion Reduces the Productive Capacity – and
Rate of Poverty Reduction of a Society as a Whole
 It impedes the efficient operation of market forces and
restrains economic growth. Some people with good ideas
may not be able to raise the capital to start up a business.
Discrimination in the labour market may make parents de-
cide it is not worthwhile to invest in their children’s edu-
cation.
 Socially excluded groups often do participate but on un-
equal terms. Labour markets illustrate this most clearly by
exploiting the powerlessness of excluded groups and at the
same time reinforcing their disadvantaged position.
 Social exclusion also increases the level of economic ine-
quality in society, which reduces the poverty reducing im-
pact of a given growth rate.
Social Exclusion Makes It Harder to Achieve the Millennium
Development Goals
 Social exclusion explains why some groups of people
remain poorer than others, have less food, die younger, are
less economically or politically involved, and are less
likely to benefit from services. This makes it difficult to
achieve the MDGs in some countries without particular
strategies that directly tackle exclusion.
Social Exclusion Leads to Conflict and Insecurity
 Social exclusion is a leading cause of conflict and insecu-
rity in many parts of the world. Excluded groups that suf-
fer from multiple disadvantages may come together when
they have unequal rights, are denied a voice in political
processes and feel marginalized from the mainstream of
their society.
 Peaceful mobilization may be the first step, such as
marches, strikes and demonstrations. But if this has no ef-
fect, or if governments react violently to such protests,
then groups are more likely to resort to violent conflict if
they feel there is no alternative.
 When social groups feel unequal and suffer compared with
others in society, conflict is more likely. Research over
several decades has revealed that political and social forms
of inequality are the most important factors in outbreaks of
violence (particularly ethnic conflicts, revolutions and
genocides).
Social exclusion also causes insecurity in the form of gang
violence. Young people who feel alienated from society and
excluded from job opportunities and decision-making may turn
to violence and crime as a way of feeling more powerful (DFID,
2005).
Methods and Data
This paper is based qualitative approach, which was influ-
enced also by the ethnographic approach, considering different
interacting social and cultural factors, such as people’s attitudes,
norms, values and practices in their day to day life. The field
work was carried out in the two communities from two NGOs:
Proshika and Practical Action Bangladesh (PAB) and from two
core projects such as the Markets and Livelihoods Program
(MLP) (of PAB) and the Small Economic Enterprise Develop-
ment (SEED) Program (of Proshika). One community was
urban (Mirpur (1) Market for Proshika) in the capital Dhaka
and another rural (Mostofapur Bazar (market) for PAB) in
Madaripur district in Bangladesh and data were obtained from
the two indigenous occupations: the goldsmiths and black-
smiths respectively. The other stakeholders were NGO staff
members and community leaders. A number of qualitative data
collection methods such as participatory rural appraisal (PRA),
social mapping, participant observation, in-depth study, focus
group discussion (FGD) and documentation survey were em-
ployed. The study uses twelve sets of research questionnaires/
guidelines and data were collected from forty two respondents
(community people, local leaders and NGO staff members) of
two NGOs and two communities. The data collection procedure
was considered as a triangulation approach.
Findings from the Two NGOs
The exclusion of many poor people in program objectives is
quite a common feature of NGO activities in Bangladesh. The
realities of those, who were poor and marginalised, are often
ignored or misread (Chambers, 2004:8). The notion of social
exclusion focused on inadequate social participation, lack of
social integration, and lack of power (Hunter, 2004:2). The
NGOs’ conventional role towards development has been exten-
sively debated. Bebbington (2005:937) notes that NGOs’ inter-
ventions became biased toward the less poor. It is observed that
the NGOs were concentrated in urban areas, where replication
of their activities is frequent, but many of the bottom people are
excluded from NGOs’ target. NGOs’ bureaucratic approach can
not ensure a ‘sustainable community’; rather they further mar-
ginalise many local people, such as blacksmiths and gold-
smiths.
The paper finds a number of elements of social exclusion,
such as NGOs’ purposeful target group selection and repli-
cation of program, short-term development approach versus
impact of globalization, high-flying profile, rent seeking atti-

M. R. ISLAM ET AL.
40
tude, monolithic development approach, lack of accountability,
complex loan procedure and high interest rate, and cut-off
budget from social services (Figure 1).
The major findings in term of social exclusion are shown as
follows:
Selection of Purposeful Target Groups and Replication of
Program
The field data confirms that micro-credit based NGO-
Proshika, did not provide loan support to those goldsmiths,
who were not guaranteed to re-pay such loans. As a result,
many of the extreme poor remained beyond their services. Re-
cent research has also criticised NGOs for lacking the capacity
to involve the ‘ultra-poor’ (Rahman & Razzaque, 2000), and
the poorest villages and neediest communities (Fruttero and
Gauri, 2005:760). It was found that NGOs’ rigid practices kept
away such vulnerable communities (Buckland, 2004:135 and
139). Proshika’s social and economic empowerment process
usually side-lines the vulnerable population (Fatmi and Islam,
2001:253). One gold businessman said:
“SEED selects the people to give loan support who are able
to return their loan safely. I cannot find any difference between
the normal bank and NGO bank. Both are same. But I think
they should provide loan support to them who actually need it.”
In addition to this, the replication of a program in a comm-
nity had a strong negative effect on the flow of programs of the
same sector or run by the same NGO.
Short-Term Development Approach versus Impact of
Globalization
PAB worked with people’s existing employment rather than
focusing support on new employment. Some NGO staff mem-
bers, community leaders, and local producers raised questions
about NGOs’ short-term development approach. This approach
failed to sufficiently mobilise indigenous social and political
capital that would build, or re-build, community capacity and
Figure 1.
Elements of social exclusion in NGOs’ activities.

M. R. ISLAM ET AL. 41
ensure sustainability of impact (Buckland, 1998:237). The
NGOs also observed that the indigenous people, such as black-
smiths and goldsmiths were suffering ‘minority’ and ‘isola
tion’ problems, and their trust of NGOs was marginal. The local
producers thought that, due to the expansion of large and sized
industries through globalisation, they might disappear in the
near future. The paper finds that there was a clear lack of con-
fidence in their reluctance to face this global competition, as
their education and quality of production were not sufficient.
They were also afraid of the future, as they were not getting any
kind of GOs’ and NGOs’ supports, and national and interna-
tional networks towards their working capital, and modern tools
and technologies. It was found that national and international
involving technology-based firms were much stronger than
local ones (Hendry et al., 2000).
The finding of this paper is that, in the ‘winners and losers’
game of globalisation, more and more people were excluded
from the benefits of this so-called progress of development.
Only those who could sell their labour or services as a com-
modity in an increasingly globalised economic system could
survive; the majority who could not were left out (Tagicakibau,
2004:8). Local languages, oral histories and cultural traditions
were also threatened (Holmes and Crossley, 2004:197). Equity
and redistribution were increasingly recognised as the ‘missing
link’. Devine (2003) found that the ‘ultra’ poor had been com-
pletely marginalised in the NGO budgets in Bangladesh. It was
not simply a lack of available resources; it was also fundamen-
tally an issue of unequal power relations in which the poor were
permanently marginalised and vulnerable, dependent as they
were on local élites (Wood, 2003).
High-Flying Profile
Data found through reviewing policy documents confirm that
both NGOs; policies were well written, and the NGOs had
high-flying goals and objectives, and set out interesting pro-
grams. The documents described how these would be achieved
within the time framework. Notably, we gathered very good
impressions from our meetings with the head office staff mem-
bers in FGD sessions, who explained how they were helping
the local producers. At this point, we would like to emphasise a
couple of interesting arguments: the first is about their written
‘policy’, which was just ‘a policy by which they caught the
attention of the donors’. However, there was a big ‘gap’ be-
tween their written policy and real implementation at the field
level. One Proshika staff member stated:
“There is a gap between policy and implementation because
of financial dependency. Most of the NGOs are project oriented.
When final funding comes it is too small for the purposes, then
the NGOs change their target and the donors again shorten
their funding allocation during final allocation. Then the NGOs
again shorten their project target.”
Rent Seeking Attitude
Many local producers and community leaders raised ques-
tions about the ultimate controversial objectives of NGOs. A
number of local producers and community leaders argued that
the NGOs were ‘new money laundering’ agencies. They stated
that the NGOs were using donations to ‘make money for them-
selves’. Many said that they were confused, whether or not the
NGOs used more than ten per cent of their resources at the field
level, but they had expensive furniture, high salaries, and high
consultancy fees and so on. Edwards (1999:367) found the
same finding, when he reviewed the cost-effectiveness of two
NGOs in Bangladesh because of high overheads (a large num-
ber of staff and buildings). In this regard, Stubbs (2006:13)
argues that the most active ‘high-profile NGOs’ are more con-
cerned with personal gain rather than with the wider cause of
poverty elimination. In addition, some NGO staff members’
attitudes were negative about their own value. They could not
believe that their help would contribute a great deal of benefit
for the local producers. This opinion was given by a field
worker of PAB. Local producers also claimed that the staff
members came to them just to take their kisti (instalment) and
they gave them nothing, which eventually benefited them.
Monolithic Development Approach
Data gathered from different sources confirm that the NGOs’
development approach was ‘monolithic’. The MLP of PAB just
provided training and advocacy, and SEED of Proshika mi-
cro-enterprise loans, training, and advocacy. It has been argued
that credit does not necessarily help the poor to accumulate
assets, improve productivity, escape poverty and improve em-
powerment (Nawaz, 2004:170). It is true that microfinance
programs and institutions are increasingly important in devel-
opment strategies, but knowledge about their impact is partial
and contested (Hulme, 2000) and promotes lively debate (Si-
manowitz, 2003:1). There were some other concerns within
micro-finances, such as the distribution and usage. Nawaz
(2004:170, 173 and 175) conducted a study in Comilla district
in Bangladesh on the micro-finance clients of three NGOs:
Grameen Bank, ASA and BRAC, and found that micro-credit
did not reach two thirds of the households, and in particular did
not reach to the bottom layer of extremely poor households. In
addition to this, a significant amount of micro-credit was pro-
vided to non-poor and non-targeted households. Importantly,
the paper argues that micro-finance does not ‘automatically’
empower, just as with other interventions, such as formal edu-
cation and political quotas that seek to bring about a radical
structural transformation that true empowerment entails
(Kabeer, 2005:4709). This approach can foster sustainable de-
velopment if, and only if, it is integrated in a view of commu-
nity development that links the social, economic and environ-
mental dimensions (Vargas, 2001:11).
Lack of Accountability
The accountability of NGOs, particularly their ‘downward
accountability’1 to their beneficiaries, affected NGOs’ effect-
tiveness in the process of empowerment for the poor and mar-
ginalised people in developing countries (Kilby, 2006:951)
such as Bangladesh. This debate is well travelled, and much
less concern is given to the NGO’s broad values and its effect.
There was a considerable gap between ‘the talk and the walk’
(Keystone, 2006). This notion of accountability created practi-
1The question of downward accountability is sensitive to power issues
and the word ‘beneficiaries’ is problematic in its own right. The term
‘downward’ reinforces the idea of power asymmetry. Mulgan (2003)
and Kilby (2006:961) caution that the use of the term “downward”
accountability can exaggerate the weakness of the beneficiary or client
and so suppress the essential ingredient of authority inherent in the
accountability relationship.

M. R. ISLAM ET AL.
42
cal knowledge gaps. While, in principle, donors generally as-
signed a high value to it, in practice the ways in which they
managed their grants and investments did not support it. Here,
some areas such as common planning tools, reporting formats
and information systems did not capture the quality of ac-
countability in relationships between NGOs and their constitu-
ents, nor did they actively enable learning and improvement
(Keystone, 2006). It was seen in the findings that micro-credit
demanded ‘a type and quality of relationship that actually lim-
ited poor people’s room to manoeuvre’. Moreover, NGOs were
replacing traditional informal credit sources (Davis, 2006:
12-13).
Complex Loan Procedure and High Interest Rate
Informal discussions with the local producers, who were nei-
ther the members of SEED nor took a loan from any NGO,
suggested that enterprises required larger amounts to be loaned,
which the local NGOs found risky, and many of the local
NGOs did not have the capacity to provide such enterprise de-
velopment loans to the small enterprises. The government and
private commercial banks also suffered from bureaucratic prac-
tices and required collateral, which the small entrepreneurs in
most cases were unable to provide (Chaudhury, 2006:64). In
reviewing the conditions of a SEED loan, it was seen that the
SEED provided loans on specific terms and conditions, which
the goldsmiths found hard, complex and unaffordable. They
calculated that, including all, the interest rate became up to
thirty eight percent, which a producer had to pay from his first
month of the instalment. It was also found from the list pro-
vided by SEED (2006) that the flat rate of other NGOs (such as
BRAC 15%, and MIDAS 16%), and other government and
private banks (Janata Bank 12.5%, Agrani Bank 14%, and
Prime Bank Ltd 15%) was comparatively low.
The goldsmiths had serious problems formulating loan pro-
cedures; for example, to complete nine pages of an application
form with information on personal, business, property, business
appraisal, and profit. SEED required ten types of documents,
such as the original property or tenant agreement, two copies of
a passport size photograph, letter (with two witnesses) and one
copy of a passport size photograph from guarantor, citizenship
certificate or two pages photocopy of passport, bank certificate
mentioning current account of the business, photocopy of last
month’s electricity bill, photocopy of last month’s rent payment
receipt, photocopy of trade licence and two revenue stamps of
Tk. 4, four non-judicial stamps of Tk. 150 (£1.36) each (two by
the name of shop, one by the name of producer and one guar-
antor). In many cases, the goldsmiths had difficulties to pro-
duce such kind of documents.
Cut-off Budget from Social Service Projects
The paper argues that financial capital such as micro-credit is
meaningless without the support of other services such as tech-
nological support, management support, help to get access in
the market, etc. The financial capital alone cannot build the
social economy and develop communities; it has to be used in
conjunction with other forms of capital, such as social, human,
environmental and cultural capital (Kay, 2005:168). Recent
literature has also shown that possessing physical and human
capital is not in itself adequate to ensure project success (Nel et al.,
2001:4). Even local knowledge alone was not enough any-
where, but perhaps particularly in rural areas (Malecki, 1998:4).
Both NGOs had limitations of resources as they could not
provide additional support for local people, dependent upon
their own assets, skills and enterprise. The findings found that
the local producers had little capital, very limited access to
credit, very little power in the market and rarely received sup-
port from the formal institutions. Proshika’s social program, a
small part of the budget, was the ‘glue’ that held community
groups and the whole program together (Yildiz et al., 2003:
v-vi). But recently the cuts in the social program of this NGO
had been too deep. Compared to the first three years of Phase
VI, the social programs had declined by 90 per cent for the
training and health infrastructure components, and by 40 per-
cent for universal education (Table 2).
Table 2.
Social component and achievement of Proshika.
Social components
Achievement
First nine month compared to Annual
Work Plan (2002-2003)
Achievement compared to Phase VI targets
(1999-2004)
Organisational building
Area expansion Low: 27% High: 139% for village/slum expansion
Primary groups Low: 40% High: 86%
Federations Very low: 6% to 28% Medium: 66% to 74%
Training & popular theatre
Human development Low 25% to 40% High: 53% to 144%
Practical skills Low 13% to 37% Very low to very high: 22% to 128%
Cultural programs Very low: 7% to 27% High: 81% to 99%
Health
Health training Medium to very high: 54% to over 500% High: 73% to over 300%
Health infrastructure Very low to medium 13% to 51% Low to high: 15% to 100%
Universal education
NFP school & learners New schools: 0% High: 83%
Adult literacy centres & learners New ALCs: 8% Medium: 56% to 61%
Post literacy centres New PLCs: 0% Medium: 49% (first 4 years)
Source: Yildiz et al., (2003: vi)

M. R. ISLAM ET AL. 43
It was found that the local producers were keen to participate
in those projects, where their immediate financial benefits were
obvious. The overall picture was that the local producers’ satis-
faction level was comparatively poor with the long-term social
development interventions. Allegedly, the NGOs neither gave
advice, nor helped to link with other institutions, nor were they
cooperative in linking with other people, such as business lead-
ers, money lenders, and local administrators. In addition, some
local producers argued that they had problems when they said
that they were the client of a particular NGO. This situation was
worse for SEED producers as they felt that the NGOs should
link with the Government bank, where they had no access for
loan facilities, though they were paying all kinds of taxes to the
Government. The community leaders also added that the role of
NGOs should be that of the ‘negotiator’. They also believed
that their low amount of micro-enterprise loan would not be
very helpful for their overall development without providing
other supports.
Conclusions
The overalls assessment of the above discussion proves that
NGOs’ social exclusion debate was extremely sharp, not only
among community people such as blacksmiths and goldsmiths,
but also among NGO staff members, community leaders, civil
society, development thinkers, and policy makers. The NGOs’
conventional roles such as micro-credit business, target based
approach, monolithic development approach, exclusion of the
‘ultra’ poor, work with existing employment rather creation
new employment sectors, and downward accountability, were
caught in this complex situation. However, the NGOs could not
fulfil the demands of the marginal communities, such as black-
smiths and goldsmiths because of their lack of services and lack
of dedication to their services. In addition, their feeling of iso-
lation was high in the competitive globalize markets.
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