Image caption Grameen Bank collectors gather to discuss any problems people are having with their repayments

Joba Rani was a solvent farmer in the north east village of Jamlabaj, but her world turned upside down when early floods swamped her land in April.

Like 20 million other people in Bangladesh, most of them women, Ms Rani had turned to microcredit in an effort to lift herself out of poverty.

Microfinance offers small loans to people who do not normally qualify for traditional banking credit, to encourage entrepreneurship.

For many recipients it is a lifeline, and very often it is the only way for them to establish a business.

But after the total destruction of their crops however, villagers like Joba are not in a position to repay their loans.

Yet the microfinance organisations continue to collect the instalments.

Blind acceptance

Microfinance is not without its critics. Some argue that people can quickly sink into a cycle of debt, with many lenders charging exorbitant rates of interest.

Dr Qazi Kholikuzzaman Ahmad, chairman of PKSF, a body that monitors microfinance, describes microcredit as a "death trap" for the poor.

Image caption A flock of ducks provides food and eggs for the family and any extra can be sold at the market

He explains how poor people often take up the loans without thinking of the consequences, and that 60% of borrowers take loans from several sources.

"There is no understanding that it might take 10 or 20 years to repay their loan," he says.

Furthermore, from the weekly repayments, some lenders deduct 10% of that payment for compulsory saving schemes - money the company then uses to lend to other people.

"Interest on repayments begin at around 15%, but it is a flat rate and can soon rise to anything between 40% and 100%," Dr Ahmad says.

Selling assets

There are some agencies which even take their payments from relief material Dr Qazi Kholikuzzaman Ahmad, Chairman PKSF

Repayments are generally due on loans from the first week after they are taken out, which does not give the borrower enough time to establish any form of income-earning enterprise.

To cover those first payments, people often resort to taking out a further loan from a different company.

Ms Rani used her loan to buy six cows but after her crops were destroyed she had to sell three of them, at half the market price, to enable her to repay her loan.

"I was hoping to save the remaining cows but they had to be sold as well," she laments.

Women are the main borrowers in the village and they were attracted to microcredit because they could get the loans easily and quickly.

Money is not always used as capital investment. Many people borrow money for cultivation, buying cattle, or a flock of chicks or ducklings.

Rough justice

Villagers are sending their children to work to help them make the repayments.

Microcredit in Bangladesh Main providers: BWTP, CARE, CDF, Grameen Bank, INAFI, MFN, World Relief, World Vision, WWB

Number of active borrowers: 20.5 million

Average loan per borrower: $114 Source: Microfinance Information Exchange 2009

But when they are still unable to pay enough, the debt collectors insist that they sell their cattle, chickens and other household items.

Selling agricultural land is also considered as a last desperate option.

Villagers complain of harassment from the debt collectors and there have been allegations of physical assaults.

Because field officers are judged on repayment rates, they sometimes use coercive and even violent tactics to collect instalments on the microcredit loans.

Many villagers finally turn to local usurers - the very people whom Professor Yunus tried put out of business when he made his first loan of $27 (£17) to a group of families in a village in 1976.

Image caption Anhar Ahmed managed to start his chicken farm with money borrowed from friends and family

Professor Yunus and his Grameen Bank were awarded the Nobel Peace Prize in 2006 for his pioneering work in microfinance and he refers to many of the institutions which have followed his example as "the new loan sharks."

His organisation has a policy whereby loans are rescheduled in times of natural disaster.

Relief costs

After the floods in Bangladesh, the district administrations requested microfinance organisations to stop collecting instalments for the time being.

But that call has gone unheeded.

Dr Ahmad is dismayed.

"There are some agencies which even take their payments from relief material," he says.