BRAC: Anatomy of 'Poverty Enterprise'

This paper studies the growth of Building Resources Across Community (BRAC), the largest development organization in Bangladesh, from a small relief distribution agency into a poverty enterprise.

The paper describes a poverty enterprise as one that combines three distinct features, namely a non-profit NGO, a for-profit NGO with an internal market and a profit-making industrial and business concern. It analyzes the capital accumulation process and profit-risk mechanism in BRAC by examining its savings and credit operations, internal market and new business ventures. The paper states that BRAC is unique in its ability to design activities to attain financial sustainability using the poverty market as well as business activities not related to poverty.

The paper traces the evolution of BRAC over the years and identifies three distinct phases in its growth. They are:

• The first phase is shaped by development imperatives, characterized by donor-financed microfinance operations with social objectives;
• The second phase is influenced by institutional imperatives, in which BRAC formulated a strategy to become a business corporation rather than a solely development-focussed organization;
• The third is the current phase wherein BRAC has shifted to market-financed microcredit programs.