Loan Journey: A study on spending of loan amount and its repayment by Informal Sector.
SUBMITTED BY: Ashish Dhingra
SUBMITTED TO: Ms Chhaya BhavsarProf K.K. Krishnan
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Agenda:• Problem.• Methodology• Analysis: 1. Analysis of Loan Issued.2. Purpose wise loan.3. Spending.4. Repayment.• Cases with Analysis.• Scope• Findings/Observation.• Recommendation.• Limitations.
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Problem:
1
•Case studies of woman on how she has spent the loan amount.
2
•Factors which are creating problem for repayment.
3
•Is there any scope for new saving products?
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Methodology: Primary Research : This was done through direct interviews of the
following respondents.1. Individual Interview of ben.2. Focus Group Discussion of ben.3. Spirit team members.4. Sewa bank employees.5. Sewa office employees. Secondary Research: It was collected through internal resources.1. Sewa Annual report2. Official records (Relation in quantity of land possessed and amount of
loan issued, loan granted and repayment)3. Forms ( Bachat Mandal, Loan issue form) 4. Information from Website.
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District Block Villages
Chota Udepur Bodeli Ratanpur Watada Panej Panibar Nanidumali Anyadri Jeetapur Mawli
Mehesana Nandasan Kadi Sarsav Chandra
Anand Anand Bhatiyapur GambhiraChaklasi
Area Covered:
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DATA ANALYSIS
BODELI• Fig 1: Explains Loan
Issued in each financial year.
• Fig 2: Purpose of the loan issued.
• Agriculture is dominating.
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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-150
5000000
10000000
15000000
20000000
25000000
30000000
35000000
27897006846000 8630000
1162500015248000
2425250026420000
33668000Gross Loan Issue
Financial Year
Amou
nt
05000000
1000000015000000200000002500000030000000
Purpose wise loan Sanction
2008-092009-102010-112011-122012-132013-142014-15
Amou
nt
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Anand
• Fig 1: Explains Loan Issue in each financial year.
• Fig 2: Purpose of the loan issued.
• Portfolio is much diversified.
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2009 2010 2011 2012 2013 2014 20150
10000000
20000000
30000000
40000000
50000000
60000000
13209325
2817193235237590
37754249
5242654858365811
28310236
Gross Loan Issued
Year
Amou
nt
0
5000000
10000000
15000000
20000000
Purpose wise loan Issued
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Spending Of Loan:
• Agriculture:
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Rs.3000-5000 Rs. 5000-15000 Rs. 15000-25000Seeds Seeds WaterWater Pesticides FertilizerFertilizers Fertilizer Seeds
Pesticides
Labor
Machine
TractorTransportation to Market
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MortgageBodeli:1. Land Release 2. Rickshaw Release
Nandasn:3. Land Release4. Debt Repayment
Anand:5. Land Release6. Shop Release7. House Release8. Jewelry Release
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Mortgage
Land Release
Rickshaw Release
Jewelry Release
Shop Release
House Release
Debt Repayment
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Business:
Bodeli1. Basic Need Fulfill.
Nandasan2. Basic need fulfill.3. Growing Stage.4. Expanding Business.
Anand:5. Basic Need fulfill.6. Growing Stage.
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•Basic Need Fulfill
Rs.5000-20000
•Growing Stage
Rs.20000-50000
•Expanding Business
Rs.50000-70000
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Household:
• If loan amount: 8000-15000 Only 1st fig: Applicable.
• If Loan amount 15000-30000: Both figures are applicable.
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House loan
Bricks
Cement
Pipes
Iron
Room
Toilet build
House loan
Electric work
Room
KitchenPlaster
Paint
Fig: 1
Fig: 2
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Education:
Bodeli 1. College fee.2. Hostel Fee
Nandasan:3. College Fee Case.
Anand:4. School Fee.5. College Fee.
Source: Rest all options are way of spending both in School fee and College fee.
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Education Loan
College fee
Books
School Bags
StationarySchool Dress
Hostel fee
School Fee
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Animal:
• Bodeli1. Buffalo
• Nandasan1. Every Case was seen. • Anand1. Every Case was seen.
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Animal loan
Buffalo
Cow
GoatFodder
Doctor Fee
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Repayment: Bodeli• In gross repayment include
outstanding amount with interest.
• Delayed loan percentage driven from outstanding amount of loan with interest.
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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-150
5000000
10000000
15000000
20000000
25000000
30000000
3060900
7693317 976818412156464
17178401
2643507728148013
20569325
Gross Repayment
Financial Year
Amou
nt
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-1505
101520253035404550
1.720.610000000
0000010.610000000
000001 0 1.01 2.08 3.42
47.8Delayed Percentage
Financial Year
Perc
enta
ge
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Repayment: Anand
• Repayment: A reason to worry.
• Figures of delayed loan amount are astonishing.
Source: Figure including outstanding amount.
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2009 2010 2011 2012 2013 2014 20150
5000000100000001500000020000000250000003000000035000000400000004500000050000000
11045053
2444797528464888
33194541
14567965
45902341
19647709
Gross Loan Repayment
Year
Amou
nt
2009 2010 2011 2012 2013 2014 20150
1020304050607080
16.3844253964529 13.218678080
0123
19.2201055747569
12.0773373084444
72.2126183093344
21.3540594852695
30.5985686590532
Percentage delayed repayment
Year
Perc
etag
e
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Case: Bodeli• Name: Savita Ben Raman Bhai Rathva • Village: Watada• No of loans: 6 (Agriculture)• Education: Illiterate
Problems: Water for irrigation. No other source of income. Problem of loan repayment. Major Spending: Seeds. Fertilizers. Water on rent. Processing. Labor.
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Loan Granted: • Loan Pattern was really good.• When she come to know she is facing
problem of loan repayment, she took less loan (2013).
• But she is facing a big problem of water required for irrigation
Spending:• Her main part of loan was spent on three
things Seeds, Fertilizer and Water.• Aged. • Machine usage.
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2009 2010 2011 2012 2013 20140
2000
4000
6000
8000
10000
120009000
8000
10000
12000
7000
12000Loan Amount
Year
Amou
nt
19%
10%
19%12%15%
10%15%
Spending Water
Processing
Seeds
Mazdoori
Fertilizer
Machine usage
Tractor
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Bodeli
• Name: Varsha ben Alpesh Bhai Rathwa• Village: Anyadri• No of loans: 3 (Agriculture)• Education: 8th
Problems: In actual it was not found. She is an example for everyone.
Major Spending: Seeds. Fertilizers. Pesticides.
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Analysis: Loan Granted:• Loans were granted less but she
used this loan amount efficiently.• She knows where to spend and
how much. Spending:• Education makes a whole change
in spending. • She has spent loan amount on 8
things. • Which shows she is known to
products available in market and how much they cost.
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2008 2009 20100
500100015002000250030003500400045005000
3000
4000
5000Loan taken
Year
Amou
nt24%
16%8%8%8%
16%
8% 12%
Spending of loan
SeedPesticidesWater on rentMachine on rentLabour chargesFertilizersTractorTransportation charges to market
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Nandasan
• Name: Noor Mohammed Ghanchi Rao• Village: Kadi• No of loans: 5 (Business)• Education: 5th
Problems: Child Health condition. Husband’s static Income. 3 Daughters Study and Wedding
Major Spending: Stitching. Sari. Katlari, Cosmetic.
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“Lady with Luck”
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Analysis: Loan Granted:• Her loans were increased
gradually. This shows her credit worthiness is good.
Spending:• Most of her spending were on
buying material, which further she sell and earn.
Income: • Her family income has increased
very much. Has a change of 300%.
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2005 2006 2009 2011 20130
10000200003000040000500006000070000
500015000
30000
50000
70000Loan Amount
Year
Amou
nt
61%24%
15%
Spending of loans 2006 to 2013
Sari BuyingCosmeticsKatlari
Before Joining After Joining
5000
20000
Income (Monthly)
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Scope:• Taking a loan and spending that amount is major concern in Informal
sector. • This project will clear the factors on which amount has been spent,
whether the granted loan was sufficient or Sewa need to extend their base for loans.
• This project will also clear the base of loan granting so it will improve their loan repayment cycle and the future of new saving schemes.
• Village wise analysis on which mode of repayment will be suitable for them.
• Relation of education to spending of loan amount.• Suitable base for loan grant, so that repayment problem will be solved to
some extent.• Last but not least case studies on life of Individual.
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FINDINGS/OBSERVATIONS
• Starting with loan form which they have, is not sufficient to have full information from the proposer.
• Most of the loan forms are incomplete.• There is no base for the how much loan should be granted to an individual
woman. • All the work done is manual, means till now there is no IT base in Bodeli.• Meetings were conducted on every Saturday to plan next week plan. That
is good initiative. • One of the biggest problem is Water required for irrigation. • Due to easy process, no much documents required and difference in
interest rate. Member prefer to take loan for Agriculture purpose.
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Few More:
• Bens are hiding the actual fact.• Due to the SEWA bank their loan recovery problem is very less
and they proper investigation before and after providing loan.• Education level is good in Nandasan and through they know
how to spent and where to spent. • Due to industries also, Nandasan is not facing a problem of
loan repayment and this is the other sources of earning.• Documents are filled properly.• In Anand only Education level is very low among leaders of
Bachat Mandal• Information only given to leaders not only all group members.
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RECOMMENDATION
• Changes in Loan Form.• Set another base for loan. Based on Income and Land Possessed • Ask for spending bills. • Diversification in loan Portfolio.• Where earning level is good prompt them for new saving schemes.• Design repayment installments on the basis of earning level of villages.
(Watada, Bhatiyapur)• Provide information directly to members not only to leaders.• Explore more subsidies available from govt.• Analysis of villages need to be done for spending and repayment.• Excessive issuance of loan amount creates problem in loan repayment and
spending.
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LIMITATIONS
• The focus group and interviews were affected by my lack of knowledge of Gujarati as members were not able to speak Hindi.
• Even though we had one SEWA member all the time she used to translate Gujarati in to Hindi. In that translation we might have missed some things.
• Many people used to feel shy about talking about their income and savings or how much loan they have taken.
• Fear in women that “who are we?”. Members used to say we are from Delhi for recovery.
• Many people hide the things.• Due to marriage season unavailability of women In villages.• We have not presented any data on nandasan because of unavailability.• Small sample size to explore specific results.
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