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.

Team involved

• Two- Six facilitators• Programme officer• Hon .Admn. Officer• Chief executive

Intervention Approach

Two fold:

Enlightenment approach Empowerment approach

• 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

Self help- A Dawn in Women’s life

Micro Bank groups-• Create grass root institution

for women • Develop institutional

capability to combat poverty and exploitation

• Enable to assert self dignity by moving from receptor state to decider stage.