Download - Micro credit
Micro Credit through
Micro Banks• It is an alter-native
system of credit, designed and managed by Women.
• It is emerging as a priority sector lending among the mainstream banking sector
• It is a link between the grass root and mainstream financial system
Promoting Organisation
• Centre For Development Alternatives [CFDA], Chennai
• It is a not for profit development organisation
• It functions from 1990
• Vision: Constructive Participation in Development
• Mission: Creating an alternative credit institution for Women
• Project intervention commenced in Dec,95
VisionConstructive Participation in Development
Building Organisational capacity for Poor by promoting MBGs
Expanding individual capacities thro’ training and learning opportunities
Extending support services to help themselves
Explaining and providing avenues for alter-native initiatives for economic empowerment.
MissionCreation of alternative credit institution
Community level mobilisation of women Promotion of internal resource mobilisation
and utilisation Functional community credit management
thro’ simple systems Exchanges for learning and sharing
Area& Client profile
• Villages that become urban fringe of Chennai, situated at Citlapakkam block of Kanchipuram District.
• Poor Women belonging to S.C;S.T and
M. B.Cs.
Problems addressed by the project
• Shrinking employment avenues for rural poor in agriculture due to rapid urbanisation and consequent conversion of agricultural land for housing and commercial use.
• Increasing burden of Women on account of multiple responsibilities.
• Lack of access to affordable and institutional credit due to assetlessness and exploitative terms of non institutional credit.
• Need for organisation of poor women.
Project objectives
• Improve the status of Women through:-increased and easier access to credit both for social and productive requirements.
• Social mobilisation and leadership development among women.
• Promote savings among the poor households.
• Sustained development through self help groups centered on savings and credit.
Project Constraints
• The target area is highly politicised that could have adversely impact on repayment behaviour and attitude of client group.
• Social cleavage [disparity] in terms of caste could affect the functioning of the groups.
• Savings campaign• Exposure visits
• Mobilisation of women in to Micro Bank groups
• Capacity building training for the clients
• Apex body of Micro Bank groups
Women’s credit needs are different
• Women’s credit needs are distinct. They are small,but frequent and urgent.
• They borrow for family needs, not for personal requirements.
• They are out of mainstream financial system.
Functional Process
C o n t a c t m e e t i n g s[ F a c i l i t a t o r s ]
A p e x b o d yF e d e r a t i o n o f g r o u p s
[ P r e c u r s o r t o t h e A l t e r n a t i v e C r e d i t I n s t i t u t i o n - M I C R O B A N K S F O R W O M E N
C a p a c i t y b u i l d i n g t r a i n i n gO n t h e f i e l d t r a i n i n gC l a s s r o o m t r a i n i n g
I n t e r a n d I n t r a g r o u p l e a r n i n g
I n i t i a t i o n M e e t i n g s[ P r o g r a m m e o f f i c e r o r F a c i l i t a t o r s ]
F o r m a t i o n o f S a v i n g s a n d C r e d i t g r o u p s
O r i e n t a t i o n m e e t i n g s[ P r o g r a m m e O f f i c e r ]
D a t a c o l l e c t i o n[ F a c i l i t a o r s ]
M I C R O C R E D I TP r o c e s s o f I n t e r v e n t i o n
• Data Collection- To identify Potential Clients• Data Analysis- To understand the poverty rating
of the target population and clients• Contact Meeting- To introduce CFDA, its
objectives and the basis of the intervention• Orientation Meeting- To Provide specific details of
Micro Banks for Women [MBW],• Savings&Credit groups [S&C groups] and
demonstration of its functions• Initiation meeting- To introduce procedures and
rules of S&C groups, select office bearers, and demonstrate the functions of the group.
• Training- To expand the capacities of the clients.
• Secretary to look after the record keeping and to enable the group to implement the decisions
• Treasurer to take care of financial discipline
• Chair person on rotation to conduct the meetings.[We deliberately avoid the position of President.]
• All transactions to take place only in the meeting to ensure transparency.
• Each time three members would attend to the money transactions.
Mutual Support
• It is the quintessence of the S&C groups.
• It recognises the capacity to mobilise resources internally .
• It borrows from external sources to meet the deficit rather than to meet all of its needs.
Capacity Building Training• Capacity to set achievable
goals • Capacity to manage the
group• Capacity to manage the
funds• Capacity to maintain
records• Capacity to maintain
group dynamics• Capacity to plan &
manage Micro business initiatives
Training in Key areas
Financial management Book keeping and
accounts Sharing of
responsibilities Collective decision
making Small business
development Management of
federation
Support Services
• Constant, close monitoring of groups
• Simplified financial management systems and practice
• Advice to identify problems and resolve crisis
• Institution building
Opening new avenues• Build links with othergroups• Establish contacts withbanks• Learn from established groups.• Identify potential
income generating activities from other groups.
• Special Savings to increase the availability of funds for rotation.• Forming and functioning of an apex body of MBGs to build up the institutional capacity.• Initiating income generating activities with internal funds.
Creative Strategies
• Direct approach (Base-line Survey) in group formation
• Sensitising the entire group to focus on a single goal
• Shared vision and knowledge enriched team
• Ientification of poor through Poverty Identification Rating ( PIR )
• Thrust on local resource mobilisation and its utilisation
• Identification of aspirants for IGA through Entrepreneurial audit
Creative Strategies
• Close, consistent and comprehensive follow-up action at all levels.
• Identification of qualified personnel to manage apex body through performing skills audit & provide them with on the field opportunities for development
• Self-assessment of capabilities at regular intervals
• Improved managerial information system to monitor the progress
Management Information Systems
REPORTS
• Follow-up reports by the staff team
APPRAISALS• Monthly evaluation of the group based on a point
system & sharing the outcome with the representatives of groups during the zonal meetings
• Self appraisal of performance by zonal cluster representatives on monthly basis
AUDITING• Monthly statement of accounts from MBGs
indicating the receipts,expenditure, loans and age-wise analysis of receivables
• Internal auditing of group accounts at office and sharing of findings at the zonal cluster meetings
• On the spot verification of accounts and cash on hand
REVIEWS
• Monthly review meetings of staff, apex body representatives and Zone Representatives to take stock of the outcome of the intervention
Accomplishment
Promotion of Savings habit among the client groups.Initiation of group lending process among them.Habit of repayment in time.Development of capacity among the clients to manage their group and finance.Social mobilisation of Women and enabling them to
attain self confidence.Support for income generating initiatives.
Accomplishment
• Forestalling interest that would have gone to the money lenders.[Calculated @35% for ten weeks =182% per year]
• Building up of group funds [1/3 rd of the total interest earned] among the groups that have crossed twelve months
• Maintaining around 95% recovery rate as per schedule and the remaining as delayed payment for internal funds and 100% for external funds.
INCOME GENERATION ACTIVITIES
Food processing Petty Shops & Others Repairs & Services
Agriculture & related Push Carts Wire Bags
Cloth retails Plastic Molding Others
Sustenance of existing groups Creation of Zones as an intermediary level to apex body. Monitoring of groups at zonal level by two
representatives from other Zones and a staff Color coded performance appraisal by the group
themselves and sharing them with others Zonal level follow-up action to rectify the deficiencies
of the groups Zonal level sharing sessions to enable others to know
the happenings in the group Need based Inter group learning sessions Introduction of rolling trophy for the best group