‘Real development happens when capacity, finance, market work together’

Padakhep began its journey with limited resources and a vision to transform lives through a Holistic Development Approach. Over the years, the non-government organisation has focused on uplifting vulnerable communities – particularly women and children – through initiatives in education, healthcare, microfinance, women's empowerment, agriculture, and climate resilience.

Dr Muhammad Risalat Siddique, deputy executive director at Padakhep and a visionary entrepreneur and digital transformation strategist, recently spoke to The Business Standard's Staff Correspondent Tawsia Tajmim about the organisation's humble beginnings, current initiatives, and future plans.

Tell us about Padakhep

Padakhep was founded by my father in 1986 in Agailjhara, Barishal, along with some friends. Initially, activities focused on supporting government projects, particularly in health and infrastructure. Microfinance was added later.

In the 1980s, many early microfinance practitioners realised that simply providing loans was not enough. A holistic approach was needed: before providing money, individuals must identify their interests, build capacity through skills training, and access income-generating opportunities. Alongside financial support, market linkages are essential. When capacity enhancement, financial support, and market connection work in a cycle, real development becomes possible.

Early focus areas

Initially, Padakhep ran campaigns such as "Bachte Hole Jante Hobe". Over time, education became a major focus. The organisation has worked extensively with street children and conducted development programmes broader than microfinance. Padakhep has served over 500,000 people, including 150,000 pregnant mothers, and operates three government urban maternity centres in Netrokona, Cox's Bazar, and Jamalpur.

After Covid-19, drop-out centres were established for 10,500 children who had left school. They studied there for three years and were successfully reintegrated into mainstream schools, completing their education this year.

Climate resilience initiatives

Padakhep has undertaken extensive work in haor areas, introducing climate-resilient projects, training, and support systems. In Kurigram, elevated platforms (machas) were built where families can raise goats, maintain sanitary toilets, and continue cultivation during floods. Market linkages enable them to sell produce and livestock.

In Cox's Bazar, a salt project replaced harmful polythene with reusable beds, making production environmentally friendly and sustainable.

Unique projects beyond microfinance

One notable initiative is the Safe Street Food Project, running in Rangpur and soon in Dhaka. It ensures hygienic street food through financing, training, and safety measures. Vendors receive training on cooking, food safety, and fire prevention and use special cards under the programme. Used cooking oil is purchased at Tk 40 per litre and converted into soap, which is sold back to vendors. This project won an SDG Award last year.

Padakhep also teaches swimming to 9,000 children with support from Bloomberg Philanthropies and the Royal National Lifeboat Institution. Other initiatives include HIV awareness for male sex workers, senior citizens' clubs called Prabin, and health cards to ensure affordable healthcare for the elderly.

Microfinance operations

Padakhep currently serves around 700,000 members, 85% of whom are women. Most loans support agriculture and livestock (60%), while others fund grocery shops or small ventures. The organisation operates nearly 700 offices across Bangladesh, including 400 microfinance branches.

What sets Padakhep apart

Digital transformation is central. Every transaction is SMS-verified. Members access digital passbooks via QR codes or phone numbers. NID verification prevents fake or duplicate loans, and family-level verification for guarantors is being introduced. Savings withdrawals are OTP-verified, and fingerprint verification is being piloted. Members can transact cashlessly through bKash, Nagad, and Upay.

A proprietary credit scoring system determines loan eligibility. All offices are under CCTV surveillance to ensure safety.

Challenges

Regulators often view NGOs only as welfare providers, not financially sustainable institutions. Restrictions on accepting savings deposits limit scope, and graduation from LDC status may shrink development funding and impact investment.

Another challenge is the absence of a centralised credit information system for microfinance, which has been under discussion for over a decade. The sector still largely operates on trust.

Vision for 2030

Padakhep plans to strengthen digitalisation and expand sustainably. The Sustainable Padakhep Index tracks 11 indicators, including business impact, staff skill-building, cultural diversity, environmental footprint reduction, and customer impact.

Customer impact measures whether members improve household finances, gain financial literacy, and experience social justice rather than being trapped in loans.

Padakhep also aligns with the 60 Decibels Index, Gross National Happiness Index, and Human Development Index to gauge real-life impacts. The Sustainable Padakhep Index aims to capture outcomes that truly reflect progress in people's lives.