Micro Credit throughMicro BanksIt is an alter-native system of credit, designed and managed by Women.It is emerging as a priority sector lending among the mainstream banking sectorIt is a link between the grass root and mainstream financial system

Promoting OrganisationCentre For Development Alternatives [CFDA], ChennaiIt is a not for profit development organisationIt functions from 1990Vision: Constructive Participation in DevelopmentMission: Creating an alternative credit institution for WomenProject intervention commenced in Dec,95

Vision Constructive Participation in DevelopmentBuilding Organisational capacity for Poor by promoting MBGsExpanding individual capacities thro training and learning opportunitiesExtending support services to help themselvesExplaining and providing avenues for alter-native initiatives for economic empowerment.

MissionCreation of alternative credit institutionCommunity level mobilisation of womenPromotion of internal resource mobilisation and utilisationFunctional community credit management thro simple systemsExchanges 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 projectShrinking 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 objectivesImprove 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.

Team involved

Two- Six facilitatorsProgramme officerHon .Admn. OfficerChief executive

Intervention Approach Two fold:Enlightenment approachEmpowerment approach

Savings campaignExposure visits

Mobilisation of women in to Micro Bank groupsCapacity building training for the clientsApex body of Micro Bank groups

Womens credit needs are differentWomens 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

Data Collection- To identify Potential ClientsData Analysis- To understand the poverty rating of the target population and clientsContact Meeting- To introduce CFDA, its objectives and the basis of the interventionOrientation Meeting- To Provide specific details of Micro Banks for Women [MBW],Savings&Credit groups [S&C groups] and demonstration of its functionsInitiation 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 decisionsTreasurer 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 TrainingCapacity to set achievable goals Capacity to manage the groupCapacity to manage the fundsCapacity to maintain recordsCapacity to maintain group dynamicsCapacity to plan & manage Micro business initiatives

Training in Key areasFinancial managementBook keeping and accountsSharing of responsibilitiesCollective decision makingSmall business developmentManagement of federation

Support ServicesConstant, close monitoring of groupsSimplified financial management systems and practiceAdvice to identify problems and resolve crisisInstitution building

Opening new avenuesBuild links with othergroupsEstablish contacts withbanksLearn 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 StrategiesDirect approach (Base-line Survey) in group formationSensitising the entire group to focus on a single goalShared vision and knowledge enriched teamIentification of poor through Poverty Identification Rating ( PIR )Thrust on local resource mobilisation and its utilisationIdentification of aspirants for IGA through Entrepreneurial audit

Creative StrategiesClose, 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 developmentSelf-assessment of capabilities at regular intervalsImproved managerial information system to monitor the progress

Management Information Systems

REPORTSFollow-up reports by the staff team APPRAISALSMonthly evaluation of the group based on a point system & sharing the outcome with the representatives of groups during the zonal meetingsSelf appraisal of performance by zonal cluster representatives on monthly basis

AUDITINGMonthly statement of accounts from MBGs indicating the receipts,expenditure, loans and age-wise analysis of receivablesInternal auditing of group accounts at office and sharing of findings at the zonal cluster meetingsOn the spot verification of accounts and cash on hand REVIEWSMonthly review meetings of staff, apex body representatives and Zone Representatives to take stock of the outcome of the intervention

AccomplishmentPromotion 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.

AccomplishmentForestalling 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 monthsMaintaining around 95% recovery rate as per schedule and the remaining as delayed payment for internal funds and 100% for external funds.

INCOME GENERATION ACTIVITIES

Sustenance of existing groupsCreation of Zones as an intermediary level to apex body.Monitoring of groups at zonal level by two representatives from other Zones and a staffColor coded performance appraisal by the group themselves and sharing them with othersZonal level follow-up action to rectify the deficiencies of the groupsZonal level sharing sessions to enable others to know the happenings in the groupNeed based Inter group learning sessionsIntroduction of rolling trophy for the best group

Self help- A Dawn in Womens lifeMicro Bank groups-Create grass root institution for women Develop institutional capability to combat poverty and exploitationEnable to assert self dignity by moving from receptor state to decider stage.