14 months of nightmare: Migrant workers' struggle to secure loans from Probashi Kallyan Bank
A migrant worker applied for a loan at the Probashi Kallyan Bank. His application was declined after 14 months of complying with endless requirements for various papers, running to several government offices for a myriad of documents, and two field-level inspections
In late March this year, migrant worker Rifat Mia "warned" Probashi Kallyan Bank's (PKB) Rajbari branch officials that enough was enough, and he would file a complaint against them.
The matter of contention? A loan – the approval of which had dragged on for over 14 months.
After a lot of back and forth, complying with endless requirements for various papers, running to several government offices for a myriad of documents and field-level inspections last year – the new manager at the PKB Rajbari branch recently said they would have to visit Rifat Mia's poultry farm again to investigate his eligibility for the loan.
Rifat Mia was furious. Last November, Rifat Mia and his wife Rabeya were even informed that their loan was partially approved. But again, they were met with a string of bureaucratic nuisances.
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A bank for 'migrants' welfare
Probashi Kallyan Bank was inaugurated on 20 April 2011, based on the Probashi Kallyan Bank Act 2010. From 16 branches in 2012-13, the bank expanded to 100 branches in 2021-22.
Since the inauguration of the bank till the 2021-22 financial year, it has provided Tk1,683 crore loans to 93,537 migrant workers. Among them, migration loans worth Tk1,323 crore were given to 80,243 migrant workers and Tk101 crore was given as rehabilitation loans to 3,714 migrant workers.
Loan distribution too increased every year – from Tk7 crore among 899 migrant workers in FY12 to Tk900 crore among 39,225 migrant workers in FY22.
Due to a comparatively lower and simple interest rates, these loans are increasingly popular among migrant workers, returnees, and their families. In different categories of loan schemes, including migration loan, rehabilitation loan, Bangabandhu Ovibashi Brihat Poribar Loan, and special rehabilitation loan for Covid-19-impacted workers, the bank charges 4% to 9% simple interest with up to 10 years of loan tenure.
However, despite the data suggesting an increasing number of beneficiaries, procuring a loan from the bank remains a daunting task for migrant workers. And experts say the bank has yet to live up to its full potential.
According to the migrant workers The Business Standard interviewed, getting a loan application approved – which includes, but is not limited to, managing a gigantic list of paperwork (such as business trade licence, bank statements, or job attestation and pages of their savings account cheque books, etc.) and securing guarantors who are either established businessmen or government employees – is nothing short of a Herculean task.
Rifat and Rabeya v. Probashi Kallyan Bank
Rifat went to Saudi Arabia in 2020 as a migrant worker, living behind his wife Rabeya. The couple had a poultry farm in their Rajbari hometown since late 2018.
But the farm had fallen on hard times, running out of chickens after making losses. And so, the couple started their loan application at PKB for capital to raise new chickens.
In Rifat's absence, Rabeya was tackling the complicated loan procedures for over a year. Besides, the application for the loan was made under her name.
It all started in February 2022 when the application was filed with a newly registered trade licence and all documents required for the loan in due process. Or so they thought.
The next process was supposed to be a field visit by an official from the bank to investigate their loan eligibility.
When July came sans the official visit, Rabeya probed the bank. This is when Rabeya was informed that the application requires a renewed trade licence since a financial year had just passed. So that became the next course of action for the applicants.
And then an official visited and inspected their farm.
In November, the couple was informed by the bank that Tk3 lakh of the applied Tk5 lakh loan had been approved.
But when Rabeya went to the bank to get the money, she was told that she needed to submit her national ID card. While it is a standard document for nearly all bank-related operations in Bangladesh, the couple distinctly remembers addressing this issue with the bank official at the very beginning. And they were assured by the officials that "it would not be a problem" as Rabeya could use her birth certificate in its stead.
When TBS contacted the current manager at the PKB Rajbari branch, he said NID had been made obligatory by that point.
Rabeya, however, got her national ID card three months later in February this year. "At this point, I was more invested to see the end of how long they can make us suffer than receiving the actual loan. I was determined to see the matter to its end," Rifat said.
A year has passed since the start of the application.
On 15 February when Rabeya went to the bank with her NID copy, there was a new manager at the Rajbari branch. According to Rifat, the manager said that they will now have to submit certain attested land survey papers.
"I already submitted those papers. But he demanded that we resubmit those," Rifat said. "We got those copies again, running after government offices, which cost us around Tk5,000."
But when they went with land papers, the manager said they had to submit the death certificate of Rifat's father as he had passed away. After they submitted the death certificate, the manager said they will now have to submit the inheritance certificate.
"I protested that why don't you tell us about all the papers at once? Why are you doing this?" Rifat said.
In March 2023, the new manager, satisfied with the paperwork, said that they would now visit his farm to check his loan eligibility.
And when the previous investigations were mentioned, the manager told the couple that whatever the previous manager did was not his responsibility. Instead, he will carry out the due process, again, regardless.
It was in late March this year when we talked with Rifat. By then, approximately 14 months had already passed since he applied for the loan. And yet, the second visit had yet to take place despite repeated calls and requests from Rabeya and Rifat.
"At this point, I called the hotline of Probashi Kallyan Bank and told them about my suffering. They gave me a contact number to report to. However, instead of reporting right away, I warned the manager about it and he urged me not to report anywhere, and that they will visit my farm," Rifat said.
In the second week of April this year, Rifat said, the bank official visited his farm for the second time. And then they declined his loan request because his farm did not have chickens.
"If I didn't make a loss and needed the investment for bringing fresh chicken to my farm, why would I ask for the loan in the first place? And it is not like my chicken just disappeared all of a sudden. My farm was empty from the beginning of the loan process," Rifat said.
We visited the Rajbari branch in late April to interview its manager Iqbal Hossain about Rifat and Rabeya's loan issue.
Iqbal admitted he had many conversations with Rifat, and his wife Rabeya had visited the bank.
"I took charge of the bank in December. I cannot say what happened before I came. Ever since I came, I told Rifat's wife about the papers she will need in writing; I didn't make them suffer. If they suffered it was in other offices while procuring papers," Iqbal said.
"Then one of my officers visited the farm and found that there was no chicken in the farm and it was full of trash," Iqbal said.
The official who inspected the farm showed us a video of the farm, and said, "It is not a clean farm. We told them to raise some chickens first if they want to apply for the loan again."
The Business Standard also visited Rabeya and Rifat's farm in a village in Ramkantapur union, Rajbari.
Rabeya, while giving us a tour of her farm, said the manager didn't give her a list of all the required papers as he had told us.
"And they now complain about the state of our farm because they don't want to give us a loan. Ours is the only farm in the area built on plastered floors. Since we couldn't raise chickens for long, there is chalk and wood stored here. But if you look at the structure, we divided the areas based on different types of chickens we raised, they are still well divided," she added.
The case of Rifat Mia at Probashi Kallyan Bank, however, is not an exception. TBS came across a Facebook help thread in a public group where people shared their grievances and their perceptions about the bank.
We also came across Abu Motaleb Sujon in the group who shared his contact number and told people to contact him – he could manage the loans from this bank.
Rifat Mia contacted this person.
"He said if I give him 10% of the loan in bribe, he will get my loans approved. I said I can get the loan at a cheaper rate at other banks if I have to pay you 10%," Rifat said.
The Business Standard could not independently verify Sujon's connection to the bank.
Is the paprrwork really too complicated?
Shahidur Rahman, deputy general manager of Probashi Kallyan Bank, told The Business Standard that their document requirements are no tougher than other banks.
"What we ask while giving loans, other banks ask almost for similar documents," he said.
"Our instruction about the guarantor is that they should be a solvent person from within the area where we distribute the loan. Because there is an issue with loan recovery. In case the loan is not paid back, we try to get it back through the guarantor," Shahidur added.
Shakirul Islam, Chairperson of Ovibashi Karmi Unnayan Program (OKUP), a grassroots migrants' organisation, however, believes that the PKB's loan process is tough for migrant workers.
"If you look at the guarantor section, you will see options in the policy to name brother, sister, mother or father besides government officers or established businessmen. But in reality, they hardly accept [family members as guarantors] when it is not a government officer or a prominent person with the capacity for loan recovery," Shakirul said.
Regarding the up-to-date trade licence requirement, he said that it is doable, but complicated for the migrant workers. And our migrant workers send money, but not always through the banks. Sometimes they have to open up a bank account solely for this purpose, in which case they usually do not have transactions. But the bank does not accept the statements if there is no transaction.
When mentioned to Shahidur Rahman that loan is often declined without a government officer or established businessmen as guarantor, he said, "We have received such allegations. We are investigating them. But it is not in our policy that we don't do without a government officer as guarantor."
About the back and forth between the branches, and the allegations of client hassle, the deputy general manager said, "Based on some complaints we received, we have issued a letter against client harassment or wasting of their time. These issues have come to our knowledge. These problems will be solved soon."
CPD and RMMRU recommend setting up a mediator
Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD) was one of the lead researchers for the study "Challenges of Disbursing Special Reintegration Loan of Probashi Kallyan Bank", jointly conducted by CPD and Refugee and Migratory Movements Research Unit (RMMRU).
"[Banking] transactions are made based on client-to-client basis… where a [client] has long-term relations, past records, transaction history, etc. But a migrant worker who comes to take a loan doesn't have the business [yet]. Many don't have banking transactions or track records. They are like new clients to the banks," Moazzem told TBS.
It becomes problematic for banks because this is a business deal. As a result, many feel banks are putting added pressure on them.
For this, they suggested PKB to have a mediator – a local NGO for example – in between the bank and the client to help process the application documents for the migrant workers. The bank could bear the mediator's fee. It could ease things for the bank, and also eases the loan process for the migrant workers, he said.
Did the PKB consider this suggestion?
"They said the suggestion was okay. But they regard this as an added expense which raises a question of who will cover this," Moazzem said. "However, we believe that the bank should bear this expense."
Loan disbursement not adequate
Going through PKB's annual report, we found that what started as a Tk7 crore loan disbursement in 2011-12 was Tk900 crore in 2021-22.
We asked Moazzem if this rise in disbursement was adequate.
"This is definitely not adequate. There is heavy demand among migrant workers for loans that they take from other commercial banks. It becomes clearer if we consider the loan-human resource ratio," he said.
"Also, the government gave PKB Tk500 crore loan for disbursement during Covid-19. They could not disburse it all for various issues. Considering all these, we guess the PKB is falling behind in loan disbursement," he added.
We asked PKB's Shahidur Rahman about this.
"There are several issues here," he said. "We don't have a public deposit for example. Our funds are based on some paid-up capital and some funds come from different ministries. We disburse the total loan based on them. We are often in a fund crisis."
"In this circumstance, Bangladesh Bank issued us Tk1,000 crore loans. They released Tk250 crore of it, which we have disbursed. They are scheduled to disburse another round soon. If they are released, our disbursement will increase," he added.
The CPD and RMMRU research on PKB also found manpower shortage an issue with the bank.
"It still remains the same," Shahidur said. "It takes time to appoint manpower in government organisations. There are many procedures involved in this."
When asked if it impacts the operations, he said, "It is a big issue for us. Some of the branches have only three to four people. Because of it, we cannot solve some issues even if we want to."
However, despite these shortcomings, the deputy general manager said the bank hopes "to achieve remarkable growth in a short time."
We also reached out to Brac Migration's Shariful Islam. He said PKB should proceed with long term visions.
"It has been 13 years since this bank was launched. By this time, this bank had the opportunity to assist the returnee or potential migrant workers more aggressively," Sharif said. "I believe the bank should progress with a five or 10-year vision projecting on why they couldn't give loans to more people and what else they can do. I beli eve the bank has the scope to emerge as a friend to the migrant workers."
