Strom Center Blog

ROLE OF MICROFINANCE FOR PROMOTING INTEGRATED RURAL DEVELOPMENT AND POVERTY ALLEVIATION

 

The concept and role of micro financing is well known for social upliftment as well as for the development of rural and backward areas. Considerable efforts are being made at the public and private sectors to bring in enough number of technologies in the rural areas for their implementation and use through micro financing for the overall development. However, support of micro financing agencies including banks is not reaching at the grass route levels and therefore, most of the developmental programmes get diluted or ineffective and many a times they don’t even take off. In the rural areas people are not much aware about the micro financial schemes and their benefits. Hence, in order to provide sustainable rural development and progressive poverty alleviation the role of micro financing agencies becomes an important in the context of current scenario. In the present communication the whole mechanism of micro finance, its role to achieve sustainable rural development and for social economic benefits are discussed in detail.

ll over the world the role of micro financing for rural development and alleviating poverty is well known and in many a cases it has been proved that well organized micro financing policies have helped in achieving sustainable development of the rural sector. During 11th five year plan Government of India also emphasized development of the rural sector through poverty alleviation and achieves more than 8% economic growth. For this purpose appropriate financial budget allocation has also been announced. For achieving this goal, both public and private sectors have to play important role in macro and micro financing. Numbers of renowned economist have published an account on micro financing for development of rural infrastructure so that in due course of time the outcome of such efforts may lead to sustainable development accruing socio-economic benefits., (Bayadas, et., al, 1997, Ditcher, 1996, Gonzalez Vega, 1998, Trape et., al, 1996 Seibel et., al 1998, Rhye, 1998, Fvan, et., al., CORE International, Inc.,  2003).  Role of micro financing in promoting renewable energy technologies in rural areas for sustainable development and poverty alleviation has been worked out in detail by Shrivastava (2009). While dealing the topic he mentioned that the success of micro financing in rural development and promotion of renewable energy technologies (RET) is dependent on presence of several factors which includes infrastructure, availability of information, education of rural population, and availability of maintenance services and creation of opportunities for incoming generating activities. In other words, integrated rural development and RET based rural energy programmes are dependent on the use of micro financing. Further, he mentioned that only such an approach can bring about poverty alleviation and improve the quality life of the rural poor. Prasad (2006) has brought out in detail about the issues and concerns of micro, small and medium enterprises financing in India.

         

Many underdeveloped countries like Afghanistan, Tajikistan, Sierra Leone, Bosnia and Herzegovina have emphasized how micro financing stimulates growth and development of the rural section in their respective countries (from internet). In India more than 70% of the population lives in villages and most of these villages are underdeveloped. Research and development sector in our country brings number of green and eco-friendly technologies every year. Implementation of these technologies in the rural sector can bring radical change in the rural economy which may also lead to poverty alleviation, create employment opportunities and generate or stimulate good growth. However, for implementing these technologies micro financing through public and private sector agencies is the need of the hour. In the present paper efforts have been made to critically analyze all the issues focusing how micro financing can bring mutational changes in the rural economy for overall benefits to all the communities and weaker sections of the society.

The green technologies are those technologies which are eco-friendly. In other words, the technologies developed by using natural resources and when adopted will not create any nuisance to the environment. In India there are number of R & D scientific organizations like Council of Scientific and Industrial Research (CSIR), Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Indian Institute of Technology (IIT), Conventional Universities, Agricultural Universities, Baba Atomic Research Centre (BARC) and number of private industrial research agencies are contributing in evolving one or other technology which is rather eco-friendly and can be defined as green technology. Depending on the necessity and challenges that are required for the overall development of the rural sector we need to bring in and implement at least some of the green technologies in such locations. For this purpose micro financing is very much needed for applications of green technologies. Integration of micro financing and technological application will definitely stimulate growth and overall development of the rural sector. Today we have number of green technologies namely renewable energy from wind, water, tidal energy, solar energy, development of bio-fuels from natural resources, bio-gas plants, bio-fertilizers, bio-manures, bio-pesticides, bio-waste recycling, bio-conservation, cattle farming and aquaculture, dairy and dairy products, pollution control and water purification, water conservation, rejuvenation for plantation and development of forest etc.

 

After witnessing a dip in 2009 on account of global financial crisis, the green sector in India is once again attracting the attention of investors and banks. Three reasons have been thought of which are favorable for investors in rural sector i.e. high REO’s (returns on equity), increasing investor comfort with renewable generation risk, and strong commitment from the central government to ensure renewable feasibility. The growth of the green sector is substantiated by pace of lending support financially through banks for implementing green technology projects. Recently Yes bank and State Bank of India have set aside certain percentage allocation of funds to implement projects related to clean technologies. For example Yes Bank has offered Rs 700 crores for a project involving management of municipal solid waste and its disposal in an environmentally friendly manner. State Bank of India has tied up with Managing Emission, a Mumbai-based company involved in business of setting up projects for renewable energy and energy efficiency with carbon embedded assets, to provide 20, 000 energy efficient plants to rural India through micro finance loans. The project involves building bio-gas plants at farmers houses. The project aims at reducing greenhouse emission by saving conventional fuel such as fire wood, LPG and kerosene.

Under the project, farmers contribute 50% of the cost and the balance 50% is financed through low interest micro finance loans from the bank. The repayment of the micro finance loan is then structured in a manner by which the income received from carbon credits is used for repayment.

Though number of green technologies is available, all these cannot be implemented each and every where. Depending upon resources available and geographical and climatic condition, location specific technologies we need to bring in and implemented. In such efforts we may have to critically examine location specific technologies and their feasibility for implementation.    

 

To familiarize about the technologies and develop skill there is again need for training and awareness. For this purpose regular training programmes have to be organized through various agencies and create a kind of awareness and develop expertise. This kind of exercise is very much needed for successful implementation of technological applications. Micro financing including lending and repayment rules and its awareness should be the part of such training programmes.

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Microfinance is defined as provisions of thrift, credit and other financial services and products of very small amount to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standard. Microfinance is provided in varying context either to individuals or groups ranging from personal micro credit to small enterprise support and rural finance.

 

 

 

 

The institution that provide microfinance and credit services are diverse including non-government organizations(NGOs), credit union, non-bank financial intermediaries and commercial banks. Generally, microfinance clients are poor and low income people that do not have access to other formal financial institutions. Microfinance clients are usually self employed or house hold based entrepreneurs. Their diverse “Micro enterprises include small retail shop, street vending, artisan manufacture and service provision”. In rural areas micro entrepreneurs often have small income generating activities such as food processing and trade. However in order to bring rural development on the faster track micro financing is essential to all these clients for technological applications. As referred earlier there are number of technologies available in the country. As the outcome of the efforts made by the R&D institutions in the country and in order to implement such location specific technologies, support of micro financing from the microfinance institutions is required. It is very much essential that while giving such support of microfinance to the different clients,  the lending policies should be clear to take care of the client interest, so that, the technological application becomes a successful programme. While implementing such programmes both micro financing agencies as well as clientele should utilize the expertise for technological applications through outsourcing agencies.

 

Microfinance is considered to be an adequate tool for financing small scale activities/technological applications in the rural areas because of the following features.

 

The principles of sustainable micro-financing are as follows: (1) offers flexible customer friendly services preferred by low-income group, (2) has opportunities for streamlining operations and reducing costs (standardized simple lending process, decentralized loan approval, inexpensive offices, and use staff from local communities), (3) operate in market basis charging market interest rates and fees, and (4) strive to recover the costs of the loan.

Many view rural microcredit as an input, along with business development services, into rural micro-enterprise development. Traditional microfinance products and methodologies generally reflect this model, with products aimed primarily at micro entrepreneurs, especially market vendors, with short loan terms, regular repayment schedules, and ever-increasing loan amounts. Increasingly, a new consensus is emerging among microfinance practitioners, donors and experts. This new view considers microfinance as an industry worth promoting in and of it.

 

Microfinance institutions (MFIs) can be small and medium enterprises at the heart of rural sustainable development. Their development positively correlates with rural business development. A new approach considers a wide range of flexible financial services for a variety of poor clients, not just rural micro-entrepreneurs.

 

This means that micro credit becomes transformed from input into rural enterprise development into a financial service that available to poor people. What this mean to MFIs and donors is the following:

Under the current micro-enterprise development model, an MFI offers very limited number of range of supply driven credit products, which tend to focus fairly narrowly on micro enterprises needs and activities. Loaning for green technological systems is not a usual practice for MFIs. Under the new approach MFIs need to evolve to provide more demand driven flexible and efficient financial services for the rural poor. These flexible demand-driven services would recognize the varying requirements of poor.

 

Currently, donors design projects to reach the rural micro-enterprise sector or other specific target groups. Many of these projects combine credit with business development services, reflecting the traditional micro-enterprise development model. Donors often insist that the MFIs charge “market” or “sustainable” interest rates in order to become developmental activities sustainable. Under the new approach, donors need to push for the transformation of these MFIs into demand-driven financial service providers with a wider variety of financial products.

                              

The dynamic growth of the microfinance industry has been promoted not only by market forces but also by conscious actions of national governments, Non-Governmental Organizations (NGOs), and the donors who view microfinance as an effective tool for eradicating poverty. The powerful push behind this huge and increasing support for microfinance indicated that national economic and social impacts are significant and it needs to be examined more closely.

              

It is worth to mention few micro-finance institutions that may successfully expand their business to provide small loans for rural development programmes that have a focus on rural sustainable development and poverty alleviation. There are three accepted models in micro financing in India namely, (1) Self Help Group/ SHG Bank Linkage Model (2) Grameen Model (3) Individual Banking Model operated through micro financing institutions. Among the three models the first model is most popular in India. 90% of the micro-credit is being disbursed through SHG bank linkage mode. Infact, with emphasis on capacity building of micro finance institutions and intermediaries, micro credit has transformed into micro finance.

         

The phenomenal growth of micro financing is evident from the fact that the number of SHGs which was 4757 in 1995-96, had increased to 1.83 million by the end of December, 2005 and the volume of credit had increased from Rs. 6 Crore to Rs.8319 crore during the same period. However, in spite of this phenomenal growth, micro financing has not attained the shape of a movement. There exist a vast gap in demand and supply of credit. As per one study, micro credit requirement was assessed at Rs. 50000 crore for the year 1999-2000. By adding other requirements such as housing loan, education loan and micro-enterprise loan, the upper ceiling of loan requirement was assessed at Rs. 2 lakh crore of micro credit. At present date of cost escalation and taking the base at Rs. 50000 crore, it is estimated that the present minimum requirement of micro credit may be Rs. 70000 crore. As against this, the supply is not more than Rs. 10000 crore. Recently, during the 11th five year plan the Government of India has announced an allocation of Rs.145000 crores for the rural infrastructure development.

 

Inspired by global efforts, some websites in the country are providing  a platform to high net worth individuals and professionals who want to extend credit to rural entrepreneurs and get returns on it and these crowd funding sites have started making difference to people’s lives.

 

Crowd funding-sometimes called crowd financing or crowd sourced capital-describes the collective cooperation, attention and trust by people who net work and pool their money together, usually via the internet, to support efforts initiated by other people or organizations. Crowd funding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns.

 

These websites employ crowd funding techniques, informing and encouraging common people online to act as investors in micro finance schemes aimed at the small borrowers. It leads to much larger awareness and participation and helps in covering the previously untapped geographies and communities. In crowd funding platforms like these, all an investor has to do is pledge a sum of money online to a borrower whose business plan inspires some confidence in him. There is a waiting period where the barrower puts the money to use and sees their profits soar. Once that happens, they start repaying the barrower in monthly installments.

                     

Since literacy levels and internet penetration are low in rural segments, these sites have field partners like Gram Utthan, Hope Foundation and Association for Sustainable Community

Development(ASSCOD) and also dip into databases of NGO’s like Saadhan, These partners have good understanding of local conditions and so are able to assess the creditworthiness of each candidate and monitor the progress. This helps build trust in investors who know exactly where their money is being used.

 

These sites also arrange for investors to contact the borrowers to check on the progress of the business, suggest ideas and discuss future plans

                               

Besides the support of micro finance and technology applications, development of organized markets is an essential component in bringing growth of the rural economy. Proper micro financing with the technical expertise for technological application may lead to varieties of product development. These products may be in the form of consumables/non-consumables. However to generate income the products should find a proper market so that money in the form of profit will be realized out of the sale of the products. In order to bring this kind of effective mechanism, organized and well structured market are essential at least at taluka level. This kind of system helps both micro finance agencies and a clientele to keep the lending and borrowing policies in a healthy way. For example the World Bank states that “one of the most powerful ways to improve energy supply is to ensure that the energy market is determined by consumer choices that means both that the prices of energy should reflect its cost and that regulation of energy industry should encourage competition and choice” (World Bank,1956).

 

 

In India development of market are not well organized not only at district, town and village level but also in metropolitan cities. In order to build well structured market the role of donor agencies and their intervention become and important factor. Well structured market helps in keeping and maintaining the quality of products made out of technology applications and these products in turn helps both at consumer level as well as manufactured level benefiting collaterally. This kind of market linked technology application may help micro finance industries to be sustainable benefiting each and every unit and leading to overall development of the rural sector.

                               

          Micro-finance plays an important role in integrating rural development and poverty alleviation. The impact of micro finance on rural development and poverty reduction has been measured in terms of several dimensions such as improved income, employment and household expenditure and reduced vulnerability to economic and social crisis.

   

 However, integrated rural development and technology based programmes leading to incoming generating opportunities for rural population can easily be put on fast track by the use of micro financing.  For implementing these technologies we have to make efforts to examine location specific technologies and its implementation.  People belonging to villages are still unaware of the banking policies and credit systems. They are lacking the knowledge of the technologies available and how micro finance is used. We must make villagers to familiarize about the technologies by conducting training and awareness programmes and the aim of these programmes should be not only on lending and repayment of microfinance but proper use of micro finance for technology implementation. NGOs should also communicate to them and share their views with villagers. Banks should convert and build up professional system into social banking system for poor. While giving micro finance to the villagers the micro finance institutions should also arrange the experts who are aware of how, when, where and which technology is being used and how best they are useful for villagers so that it will build and sustain the rural developmental activities. In these efforts, the Government of India and the State Government should also provide the support for capacity building initiative and ensure transparency and enhance credibility through disclosures.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                                                                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                          

 

 

 

 

 

 

 

                         

 

 

Source: ArticlesBase.com

Access to Justice through State-led Rural Justice System in Bangladesh: A Case Study in Kansat Union Parishad

opens up the basic premises of the study. It starts by describing the rural adjudication systems in Bangladesh. As it discusses, the adjudication systems in rural Bangladesh are broadly divided into two categories: state-led rural justice systems and non-state rural justice systems. The two state-led rural justice systems active in Bangladesh are the Village Court and the Arbitration Council. On the other hand, there are several non-state justice systems in Bangladesh. A commonly referred non-state justice system is the traditional ‘shalish’ system. There is also a practice of clan (gusthi) based dispute settlement. In the recent years, NGO-organised modern ADR (alternative dispute resolution) systems have been started in some parts of rural Bangladesh. All these forums come under the non-state rural justice system (p.3).

The prime features of both the state-led and non-state justice system in rural Bangladesh is discussed (p.3). The fundamental difference between these two categories of justice systems is that state-led rural justice systems do have the specific body of laws to follow, while the non-state rural justice systems don’t have any specific law and procedure to adhere to.

Chapter one makes clear that this study concerns only the Village Court and the Arbitration Council. Both the justice forums are quasi-judicial in nature. The Arbitration Council is formed under the provisions of the Muslim Family Laws Ordinance, 1961. On the other hand, the Village Courts are formed under the provisions of the Village Court Act of 2006.

That both the justice bodies have peculiar informal character is discussed. Both are legally required to follow informal procedure for adjudication of disputes. But like the formal court systems, for these rural justice system also, there are legal provisions for matters relating to filing of a case, court fees and case registration, notice to the parties for the selection of their representative, issuance of summons, recording judgment or decision, and implementation of the decision (p.6).

The connection of the state-led rural justice systems with the local government administrative body called Union Parishad is clarified (p.9). Both the Village Court and the Arbitration Council function under the aegis of a Union Parishad. A Union Parishad has clearly specified 38 multifaceted functions laid down in the Local Government (Union Parishads) Ordinance, 1983. Along with these functions, it has been entrusted with the responsibilities to run the Village Court and the Arbitration Council by the Village Courts Act 2006 and the Muslim Family Laws Ordinance, 1961 respectively (p.9).

The overall rural justice scenario is investigated into through a literature review (p.10). It shows that still two third of the rural disputes do not enter the formal court process.  They are disposed of either in traditional Shalish systems, or in the Village Courts and Arbitration Council or they remain unsettled (p.10). It explains how the informal Shalish system becomes susceptible to manipulation and corruption, and how the local rich and powerful people dominates the shalish adjudication, and makes the positions of the poor and disadvantaged more venerable (p.11-12). That the state-led rural justice systems have failed to become better alternative to the shalish and as a result the poor and marginalized people are almost denied the right to access to justice is also discussed (p. 3-15).

The previous studies on rural justice have been critically reviewed. The researcher opines that the findings of the previous studies are ‘not only inadequate but also confusing and to some extent misleading’ (p.24). He explains that ‘a reform perspective requires more specific, concrete and lucid analysis of problems and issues, and demands practical and workable recommendations. In view of that, these studies are inadequate. ….. The data and information provided by these studies are raw, unarranged and very limited in their scope” (p.24).  Then how the findings of the previous studies were inconsistent and misleading are explained (p. 24-27).

The need for the present study is explained in the concluding part of this chapter. The objective of the study is ‘to explore the scope for the access to justice under the existing legal and institutional arrangements for state-led rural justice systems’ (p. 27). In attaining this objective, the whole body of the study concentrated on the five main research questions as follows: (i) What are the legal remedies available to the rural people under the state-led rural justice system in Bangladesh? (ii) Whether the remedies are adequate and desired by the rural people? (iii) What are the legal and institutional capacities of the system to provide the legal remedies? (iv) How is the state-led rural justice system functioning with the existing legal and institutional capacities? And (v) What are the other ‘access to justice’ arrangements such as legal aid and counsel to provide the justice through the state-led rural justice system? (p. 28).

discusses conceptual and analytical frameworks for access to justice in detail. It demystifies the concept of access to justice, exposes the crucial issues and debates in the access to justice arena, and reveals the various dynamics in the access to justice process.

The fact that there are various conceptions of both the concept of ‘access’ and ‘justice’; hence there are various conceptions of ‘access to justice’ also – is discussed in pages 30-41. It discusses various  principles and forms of justice, as well as various ways of improving ‘access’ to justice, such as providing legal aid and introducing ADR, as developed through the access to justice movement worldwide that began in the mid 1960s. However, it makes clear that by access to justice is generally meant to access to a legal process that ‘enables people to claim and obtain justice remedies, whenever conflicts of interests or particular grievances put their well-being at risk’ (p 41).

That the ‘access to justice’ can be seen as a process is discussed pages 41 – 42. The access to justice process can be divided into different stages, starting from the moment a grievance occurs or a dispute arises to the moment the grievance is redressed or the dispute is settled or resolved. These different stages involve a variety of strengths or capacities the people needs as a justice seeker and the system as justice provider. In the discussion of ‘access to justice as a process’ the access to justice process has been divided into five different stages namely (1) Legal protection (2) Legal awareness (3) Legal aid and counsel (4) adjudication and (5) Enforcement and oversight (p.42).

Legal protection is described as the first stage in the access to justice process, which determines the legal basis for all other stages in the process (p.43). It involves the legal capacities of a justice system to ensure that people’s rights are recognized within the scope of justice systems.  The legal protection is provided through normative framework which defines crime or offence in a given society. If a grievance not recognized in law, no legal remedy or justice remedy is possible.

Legal awareness is described as the second most crucial stage in the access to justice process (p.45). Even if there are provisions for complete legal protection in a justice system, and people don’t know about the legal remedies, the system can help little to achieve the goal, the justice (p. 45).  That the legal awareness is also ‘an important element of legal empowerment’ is also explained (p.46).

Legal aid and counsel is described as another most crucial stage in the legal process of access to justice, when it refers to equal access for all, poor and rich (p.47). People need to reach these remedies for which they may require professional help to make informed decisions and choices.  They may need to engage a professional lawyer. For the poor and disadvantaged, the inability to communicate effectively to reach an informed decision and the inability to pay for litigation costs are seemingly two, among others, immovable blockades to the way to justice.  The ‘legal aid and counsel’ can remove these blockades.

Adjudication is described as the most crucial stage in the process of access to justice where decisions as to justice are made (p.49). Adjudication as a process of judicial decision making may be voluntary, involuntary, adversarial or inquisitorial, formal, informal (p.50 – 53).

That there may be various stages in the adjudication process is discussed (p.53).

The various actors involved in these different stages of adjudication are also discussed (p.54).  That the different actors and duty bearers both in formal and informal justice system need different types of capacities and skills is also discussed in detail (p.55). These capacities and skill are described are legal, judicial, administrative, and technical and operational.

An adjudication system has been seen from the access to justice perspectives also (p.55). From access to justice perspectives there are some basic characteristics or capacities of adjudication system, be it formal or informal. All those characteristics – under the headings of (a) Operational Efficiency (d) Human Resource (c) Integrity and Accountability (d) Independence and (e) Accessibility – are discussed.

‘Enforcement and oversight’ is described as the final, hence, vital stage of access to justice process. The stage of enforcement relates to the implementation of orders, decisions, and settlements emerging from formal or traditional adjudication. The enforcement authorities such as police and prison are discussed (p. 57).  The necessity of oversight mechanism to improve accountability within the system is also explained (p.58).

This chapter lays down the access to justice framework for the present study, and thus, clarifies the scope of the study. It defines access to justice as ‘the ability of the common people to demand justice, and the ability of state-led rural justice system to provide the same (p.60).

That how the ability of the system and the people has been assessed in the study is also explained in this chapter (p.60). For assessing the capacities of the systems to provide access to justice, the legal and institutional frameworks for the village Courts and Arbitration Councils have been examined. For assessing the capacities of the people to demand justice, the aspects of legal awareness and legal aid and counsel have been examined.

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This chapter also explains the methodological approaches to this study (p 61-65). In different stages of the study, it utilises the data from law, rules and procedure, judicial decisions, court records, research reports, and so on. For the purpose of collecting data form these secondary sources content analysis methodology is used. For collection of the primary data, case studies methodology is used. The methods and techniques used in this case study are in-depth interviews, focus group discussion (FGD), group interviews, and direct observation of court proceedings. The case study was carried out in the historic Kansat Union under the district of Chapainowabgonj.

looks at the rural justice system form various perspectives such as economic, socio-cultural, legal, and constitutional, and thus shows that an effective rural justice system is a basic demand of the economically poor, disadvantaged, culturally amicable and peace-loving common people.

This chapter reminds the Constitutional promise of ‘a society in which the rule of law, fundamental human rights and freedom, equality and justice, political, economic and social, will be secured for all citizens’ – rural and urban (p 67).  It discusses the facts that more than 75% of which lives in rural areas, where there are considerable amount of disputes and existences of crime which are very much of rural nature (p.69). It also discusses that majority of the rural population are poor and disadvantaged and that more than 50% of them earns less than US a day(less than 15 BDT) (p.68).

The nature of rural society is discussed in pages 70-72. It discusses that Bangladesh rural society is generally peaceful and  people live in harmony, but  there is also enough power, control and influence of the wealthy people, political leaders and religious pundits in rural society.Patriarchal attitude of the society poses a great challenge towards gender equality and women empowerment in the society (p.70).

That the rural power structure is based on a number of formal and informal institutions such as gushti (lineage), samaj, and Union Parishad is also discussed (p.71). It explains how the rural power structure is deeply rooted in patron client relationship, which is ‘anti-poor by its characteristics’. However, it suggests from some literature review that Bangladesh rural power structure is in transition, and as a result of this transition rural people are getting self-empowered and experiencing new perspectives of life.  This is in some way breaking the patron client relations and hence the rural power structure. But still these are very scanty challenges to the embedded rural power structure and to the patron client relations (p.72).

Bangladeshi rural culture, its rich cultural background, and its impact in rural life are detailed in page 72- 74.  It discusses that the continual economic poverty and other social biases never prevent the rural people of Bangladesh from their cultural expositions. Various celebrations and festivals round the year adorn the village life with the touches of charms, joy and happiness. These cultural activities create a network of informal exchange and sharing, which keeps the community people informed about each other (p.74).

Rural dispute settlement mechanisms and peoples’ attitude toward them is also discussed (p.74). It discusses that 60-70% of local rural disputes are resolved by the traditional shalish system. The shalish systems are largely presumed as unfair, biased and anti-poor and disadvantaged. Nevertheless, majority of rural people prefers the shalish system than the formal courts for dispute processing, because of its comparative benefits.

Chapter three also exposes the close linkage between poverty and justice, and explains why rural justice is a must for eradication of rural poverty (p75). As it discusses, over the past decade, the thinking about poverty has been changed immensely. The concept of poverty has been broadened with increasing attention to issues of vulnerability, inequality and human rights. In this changing scholarship, ‘access to justice for all’ is recognized as a prime condition for alleviation of poverty (p.76). The discussion here also refers to UN Commission on the Legal Empowerment of the Poor, to focus specifically on the link between exclusion, poverty and law.

The historical backgrounds of rural justice systems in Bangladesh are discussed (p.77-83). It clearly shows the gradual development of the traditional shalish systems into semi formal court systems and into ADR.  It depicts the development of state-led rural justice systems also.

looks at three important aspects of access to rural justice in the light of the legal frameworks for the Village Court and the Arbitration Council. These three aspects are (a) the legal protection (b) the adjudication process, and (c) the arrangements for enforcement and oversight (p.86).

The chapter first discusses on the Village Courts. It shows that the Village Courts in Bangladesh have been working since 1976. A Union Parishad runs a Village Court, but it has no permanent seat. Usually, a Village Court takes place in the Union Parishad Building or premises, but it can hold its sessions in any suitable places (p. 87).

The legal remedies available in the village courts are discussed (p.87).The Village Courts Act 2006 contains a Schedule, which provides a list of criminal cases and civil disputes that a Village Court can deal with. This chapter discusses on those crimes and disputes in detail in pages 88-91. While the criminal cases involve some petty offences, the civil disputes involve an amount of or property valued not more than 25,000 taka. That the Village Courts have exclusive jurisdiction to try these criminal cases and civil suits, and no other civil or criminal court can theses cases and disputes is also discussed (p.91-92).

The arrangements for adjudication in the Village Court are discussed elaborately (p. 92-100). It discusses the provisions on the constitution of a Village Court (p.92), territorial Jurisdiction of a Village Court (p.94), powers of a Village Court (p.94), procedure of adjudication (p.96), appeal against a decision of a Village Court (p.99), transfer of certain cases to village court to formal courts and vice versa (p.100) and  investigation by police (p.100).

About enforcement and oversight mechanism is discussed in pages 100-101. It shows that the Village Courts Act keeps provisions for the enforcement of decree, but there is no specific provision for oversight or monitor in the Act or in the relevant frameworks. However, there is a Rule, which can be treated as part of monitoring mechanism. About this Rule is also discussed (p.101).

The second part of the chapter discusses on the Arbitration Council (p.102). The Arbitration Council can provide legal remedies in family matters relating to (a) polygamy, (b) dissolution of marriage, (c) maintenance and (d) dower (p.103).

The arrangements for the adjudication in the Arbitration Council are elaborately discussed (p.105).  In the case of polygamy, divorce and maintenance, the arbitration Council of the Union Parishad where the wife resides enjoys the jurisdiction (p.105). However, there is a limitation on the jurisdiction that an Arbitration council can not deal with the disputes among non-Muslim communities (p.106).

Procedure of adjudication in Arbitration Council is discussed in detail (p.106-7).

It discussed how the process of adjudication starts (p.107), how the Arbitration Council is formed or composed of (p.107), how it conducts its proceedings and how decides upon a dispute (p.108). Along with the common procedure, there are specific procedures for the polygamy and divorce, which are discussed in detail (p.108-9).

That the provisions about appeal against or revision of a decision of an arbitration council are also discussed (p.110). It mentions that the decision of an Arbitration Council cannot be appealed against. However there are options for revision of decision as to polygamy. How the application for the revision is made is also discussed (p.110).

That there is no specific enforcement mechanism for a decision by an Arbitration Council is discussed (p.110). However, the Union Parishad acts as an enforcement agency for the Arbitration Council in a case where a payment of money is ordered (p.111). Also, there is no specific body to monitor the functions of the Arbitration Council (p.111).

makes an endeavour to assess the different capacities of the rural justice systems and the people that enable them to provide and receive justice. (p.114). Two things are examined here. First, whether the existing legal and institutional arrangements are adequate to meet the demand of justice in rural Bangladesh. Second, whether the common people are capable to utilize the existing system (p.114). In assessing these two aspects, the study mostly relies on the data obtained from a case study in the Kansat Union Parishad (p.114).

In assessment the capacities of the state-led rural justice system, the functioning of the village Court and Arbitration Council in the Union were examined by using different methodologies. In assessing people’s ability to demand justice under the existing legal and institutional arrangements, eight focus group discussions (FGDs) were conducted.

The chapter reveals the awareness level of the common people as well as the other people concerned with the rural justice system. Almost 100% of the common people don’t have any clear idea about the Village Court and Arbitration Council (p.119), let alone they are aware of different legal provisions relating to the constitution, proceedings, court fees, arrest and summons, investigation, taking evidence and decision making, and enforcement of the decisions (p.120). Similarly unaware of are the former and the existing members of the Union Parishad because there are no arrangements for training of awareness raising programme for them, and also there is no monitoring from the higher authorities (121).  They are not even updated on relevant legal and judicial matters (p.121).

Other concerned authorities like the appellate civil and criminal courts and the Thana administration are not also much aware of the legal provisions on the Village Courts and the Arbitration Council; hence they generally do not comply with the legal provisions (p. 122- 123).

The state of legal protection under the state led rural justice systems is discussed in pages 124-5. It is revealed that the legal protections in state-led rural justice systems are neither adequate nor inadequate (p.124). It is explained that the common types of cases and disputes that arise in the locality fall under the jurisdiction either of the Village Courts or Arbitration Council. But there are exceptional cases like murder, rape, acid throwing and eave teasing which neither the Village Court or nor the Arbitration Council can deal with. But when such a case comes, the Chairman and members cannot bypass trying the case in excuse of lack of jurisdiction. As a people’s representative, people expect a lot from them and hence, they become obliged to arrange for shalish to settle these cases (p.125). The financial or pecuniary jurisdiction of the Village Court, which is 25,000 Taka, is also not adequate (p.125)

Referring to a finding from an earlier study, where the public was confused as to giving more power to the Village Courts fearing the abuse of the power, the chairman of the Kansat Union Parishad said, ‘This fear and confusion is groundless’. He explained that when more power will be given, legal guidance will also be given, hence the scope for abuse will be slimmer (p.125).

The state of adjudication in the Village Court and Arbitration Council is detailed in pages 126 -134. The adjudication process involves the parties in disputes, the community leaders, the members, the chairman and the secretary of the Union Parishad, the village police (chowkidars), the appellate civil and criminal courts, the thana administration and the police. All these actors need different legal, judicial, administrative, and technical and operational capacities and skills to make the adjudication system efficient and effective. All these things are discussed (p.126).

That the operational arrangements for the state-led rural justice system are inadequate is discussed. The Chairman of a Union Parishad is the only person legally designated to deal with the cases and disputes under a Village Court and the Arbitration Council. He acts as the Chairman of both the forums.  He is also the one and only clerk or administrative officer for them.  He himself is to do the documentation and clerical jobs like registering the cases, giving the number to cases, issuing notice and summons, recording the evidence, decisions and the history of enforcement and sending reports to the higher authorities. There is no other support stuff or court official.  There is no legal provision or separate fund for the justice bodies, so that necessary support staff can be appointed (p. 129).

About the incapacity of the institutional and operation arrangements, the chairman of Kansat Union Parishad says, that a Union Parishad has to do 38 other regular functions beside the function of the Village Court and Arbitration Council. Presently Kansat Union Parishad deals with only a 20-25% of cases and disputes through these justice bodies, and they sit only twice a week. But if the justice bodies are made fully operational then huge number of cases will come in month, and it will be impossible to run them with the existing institutional and operation capacities of the Union Parishad (p. 127-8).

That an effective adjudication requires well-trained and educated human resources but there are no institutional arrangements for training for their skill development, or for other knowledge sharing programmes such as workshops and seminars to provide them legal update is discussed (p. 129- 130).

How the judicial arrangements in the legal frameworks for the Village Court and Arbitration Council provide enough safeguards against different biases based on gender, religion or class – is discussed in page 130.  However, examples have been provided to show how the patriarchal attitude, religious malpractice are noticeable to some extent (p. 131).

The notion of independent judiciary is totally absent in the state-led rural justice systems. The members and Chairman of the Union Parishad work simultaneously as administrative and judicial actors in the area- are discussed (p.131). But it is claimed that it does not create any problem in term of fair justice, as both a Village Court and an Arbitration Council is consisted of a panel of judges, and a decision is taken by the majority of the judges (p.131).

That both the Village Court and Arbitration Council are geographically and financially accessible to the common people is revealed (p.132). Small court fees, no requirement to engage lawyer, and geographical proximity are contributing factors in accessibility. But a case against stronger party, or a maintaining privacy or family reputation etc may obstruct access to justice forums.

The level of transparency in adjudication in the Village Court and Arbitration Council is described (p.132). The members and the chairman of the Kansat Union do claim that their adjudication is 100% transparent and unbiased. All necessary investigation and decision making are done by respected local people having some unique informal technique to dig out the truth. There is no rule of evidence and parties can detail their story, and then parties reach a decision by way of discussion and by consensus.

That there is a culture of compromise in the Village Court and Arbitration Council is discussed (p.133). The victim parties always received less amount (as compensation or not) than they claimed. In almost 100% cases, the victim parties ultimately accepted the Village Court’s decision, but no one spoke about any influence or pressure.

About the salary or honorarium for the members and chairman for their judicial service in the Village Courts and Arbitration Councils are discussed (p.134). The members and chairman of the Union Parishad expressed their dissatisfaction that the salary or honorarium was inconsistent with the services they render.

That there are no major problems in enforcing the decree of the Village Court is discussed. Usually the judgment-debtor complies with the decree. But if anyone does not comply with the order or decree, then compliance becomes tough as the decree enforcement procedure are complex and time consuming (p.135).  It is also discussed that the fine for any non-compliance or for contempt of court is only 500 Taka, which is inadequate, resulting in non-compliance or contempt of court (p. 135).

It is found that there is no major problem to enforce the decision of Arbitration Council. The Union Parishad deals mainly with the suits for divorce and dower, where decisions are reached by consensus, and parties usually comply with the decision. There is no record in the last ten year to deal with any case of polygamy (p.136).

That virtually there is no monitoring or oversight authority for the Village Courts and the Arbitration Council is discussed (p.137-8). The Chairman of the Union Parishad has to send to the Sub-divisional Officer two half yearly return of the work of the Village Courts. This does work as monitoring system. However, for Arbitration Council, there are no such arrangements. Any party can appeal to Assistant District Judge against a decision of Arbitration Council. This appellate system has little to do in monitoring.

The state of legal aid and counsel is described (p.138).  It is opined that both of the Village Court and the Arbitration Council is financially accessible and that there is no need for any financial legal aid, except is case of appeal to higher judicial bodies, but legal counsel is necessary (p.139)

, the concluding chapter, puts the findings of the study summarily, and makes a few specific recommendations (p.150). They are, in short, as follows:

For complete access to justice in the rural area both the Village Courts and Arbitration Council should be made properly functional. The existing legal protection under the state-led rural justice systems are inadequate hence should be extended. The Arbitration Council should be made accessible to the people form non-Muslim communities, or a separate state-led rural justice body like Arbitration Council should be set up to provide them remedies in family affairs. The pecuniary jurisdiction of the Village Court as to civil suits should be enhanced from Taka 25,000 to 50,000, and it should be reviewed from time to time. The formal courts and the thanas (police station) regularly entertain cases that fall under the jurisdiction of the Village Courts, creating problems for the Village Courts. A legal provision may be incorporated in the Village Courts Act 2006 requiring the concerned court and thana administration to inform the Union Parishad if any case that falls under the jurisdiction of a Village Court of the concerned union is filed in the court or police station. The operational capacity of the Village Courts and Arbitration Council should be strengthened. The state-led rural justice body should be adequately funded to run its functions. A national and regional rural justice training centres should be established for imparting training and for arranging knowledge sharing programmes for the chairmen and members and other authorities concerned with the Village Courts and the Arbitration Councils. An all out efforts should be taken to raise awareness level of the common people. At the same time, steps should be taken to make the police administration, the appellate authorities and the oversight authorities called responsive. The enforcement and oversight mechanisms for the state-led rural justice systems should be strengthened.

After offering some suggestion as to how some of these recommendations can be effectively implemented, in the concluding chapter, the report calls for an immediate state intervention in the field of rural justice in order to broaden the scope of justice for the poor and disadvantaged.

NB: The reseach report is submitted in July 2009 to Research Initiatives, Bangladesh (RIB), House No. 104, Road No. 25, Block A, Banani, Dhaka – 1213, Bangladesh. Copy of the unpublished research report may be obtained from the organisation. For your cop of the research report you may contact at: www.rib-bangladesh.org.Email: rib@citech-bd.com

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