Field officers from the bank conducts field visits to potential areas and selects villages with the following criteria: 1) Within a radius of 10 km from bank premise,  2) availability of agriculture and non-agriculture activities and 3) high percentage of low-income people.

Upon availability of at least 400 target group people in the selected areas, the concerned branch proceeds for MF operation. Groups consisting of 5 members each (living in the same village) are formed. A centre is formed with 2-8 groups. The group leaders appoint the centre leader and deputy leader from among themselves to facilitate centre activities.

Members have to open a Mudaraba savings account and are required to deposit Tk. 100 per week. Besides, they deposit Tk.10 per week to Qard-e Hasan fund which extends non-profit loans.

A centre meeting on weekly basis is conducted by the bank’s field officers what all groups must attend. The meetings uphold moral values, social rights and responsibilities of investment repayment; collection of investment installments, personal savings and centre funds; and review and approve investment proposals.  

Investment financing starts after 8 weeks of positive observation for a member. Investment is allowed without collateral and functions on group guarantee mechanism. Personal guarantee from every member of one’s group is required and the members are jointly and severally liable and responsible for repayment of the investment.

The initial investments start around Tk. 50,000 and based on good repayment, it increase by Tk. 30,000 or multiple in every succeeding term depending on the sector of investment. The rate of return (based on profit and loss method) is at 9.10 percent, however timely repayment is rewarded by a 2.5 percent rebate, thus a successful member will pay 6.6 percent profit to the bank. This rate of return is lower than any rate offered by conventional MFIs in Bangladesh.