Association For Social Advancement

The Association for Social Advancement (ASA) (Bengali: আশা) is a non-governmental organization based in Bangladesh which provides microcredit financing. It was established in 1978 by Shafiqual Haque Choudhury and a team of people who were then working for other established NGOs, but who themselves were arguing for a better, more radical way to alleviate the exploitation of rural villages caused by the 1971 Bangladesh atrocities. The founding framework of ASA was aimed at empowering rural landless villagers from the “bottom up” through “people’s organizations”. These were run by volunteers who advocated that a consciousness for solidarity amongst the village poor would lead to collective social action. ASA has currently over 2.2 million members forming different groups with special emphasis on saving practice and 8,000 employees engaged in disbursing and collecting loans and savings deposits.

For many years, ASA sought to combine social development (in health, education, nutrition, and sanitation) with credit provision, but in 1991, these were abandoned, and ASA shifted its focus solely to microcredit lending. This was because they wanted to stop “donor dependence” and become specialised and financially self-sufficient. Since then, it has become a fully self-sufficient microfinance institution – operating mainly in Bangladesh, but with presence in Africa and South America. ASA offers a wide range of financial services to its clients – including micro-credit, small business credit, regular weekly savings, voluntary savings and life insurance – and follows a simple, standardized, low-cost system of organization, management, savings and credit operations.

Its funding has evolved smoothly: first came generous donors, then some small commercial bank loans, then low-cost loans from a subsidised wholesaler, and finally, as outreach expanded and surpluses piled up, client deposits and retained earnings. But by far the most important of the stable conditions in which ASA has prospered has been the expanding demand from an enormous client pool for the very basic service that ASA offers. The core service has remained the low-value year-long weekly-repayment loan, the staple of its successful growth. ASA has not had to undergo large-scale internal reorganisation or training because the basic product and its delivery have remained largely unchanged. Also, savings mobilised from clients are used to provide security against default by protecting the small loan portfolio, instead of being used in more risky ventures like raising capital.

Today, ASA's official mission is to "reduce poverty and improve the quality of life of the poor through the provision of qualitative and responsive micro finance services in an innovative and sustainable way".

ASA offers a successful alternative microfinancing model to that of the Grameen Bank. In December 2007, it placed Number 1 in Forbes Magazine’s list of the world’s top 50 microfinance institutions. Grameen Bank placed Number 16, despite having won the Nobel Peace Prize 2006.

ASA combines low-cost operations and high growth to fuel its success. Its ability to constantly reduce interest rates and focus on efficiency has led to its high profitability. ASA’s flat rate was 15% (approximately 32% annual percentage rate) until July 1995, when it dropped to 12.5% at a time when micro-finance institutions (MFIs) were coming under increasing criticism in the press for their prices.