'D:\CUSTOMERS\Mate\SaDhan22\SaDh' by Anil

Sa-Dhan Newsletter Volume 4 Issue 2

Community Based Organisations

to other micro credit situations etc. They also provided

movement in the country and depended on the respective

leadership training to current or prospective federation leaders.

regional context and NGO perspective. One needed to go

Federation staff were given training in computers, bookkeeping,

through this evolutionary process.

accounts, audit etc. Besides, they were trained for taking on

Federations could take up micro-finance support and

wider social roles. He also said that federations played

social empowerment role. Promoting agency or NGO

various roles pertaining to micro finance operations and

could take up livelihood promotion work.

social intermediation. In the former category, they provide

Group 2

financial services such as savings, insurance, fixed deposits,

Preparing a menu of activities and products for capacity

monitoring SHG performance, appraising loan requests from

building would tend to make it strongly activity/training

members, and helping or undertaking responsibility of recovery.

driven without addressing the larger issues of capacity

In addition, federations sometimes undertake bookkeeping in

building needs.

cases where there are no literate women in the village. It

The capacity building needs for any federation must

operationalised the bank linkages by taking the SHG leaders

emerge through a participatory exercise involving the

to the bank or taking a bulk loan from a bank on behalf of

promoting organization and the federation.

the SHGs and then allocating it to the SHG members. The

Compartmentalizing financial and social intermediation

social role played by the federation includes training to SHG

might tend to be prescriptive and not participatory.

leaders, and as a routing point for transmitting development

It is important to develop capacities of the promoting

messages from the promoting institution to the SHGs

institutions.

Ramesh Arunachalam who presented the financial analysis

Investments in capacity building need to be enhanced.

said that the analysis has lots of caveats, as in most of the

Promoting institutions must balance their interventions

cases the data was self-reported and could not be verified.

between financial and social aspects.

However, observation shows that the overall financial

The organizational development inputs should precede

sustainability for the sample seemed low, except in the case

other capacity building needs of the federation.

of one federation, which was close to achieving full

sustainability. The operational sustainability (operational cost

Group 3

plus some loan loss provision) was high to moderate in five

Factors crucial for the achievement of financial and

of the seven federations studied. One key trend that emerged

operational sustainability of federations

was that a significant cause of delinquency was a sudden

5 Membership to the federation should be from a small

growth of portfolio without commensurate increase in

geographical area

administrative or managerial capacity to manage that growth.

5 Before forming the federation, the capacities and

Q1, Q2 and Q4 federations seemed to have low to moderate

systems of federating SHGs should be in place.

financial sustainability base. Q3 federations had high financial

5 Emphasis should be on "own" funds.

sustainability, and done better because they have predominantly

5 The federation must focus on finance as a "service".

relied on savings of the members.

5 For better financial management the arrears and idle

Commenting on the two presentations C.S. Reddy, CEO,

funds must be low.

APMAS and a member of the Advisory Committee for the

Promotional Costs

study, said the conclusions would be more authoritative if

5 Promotional costs should be subsidized.

data was available for more than seven federations. In his

5 NGO should not become a "contractor" to promote

opinion, it was difficult to say which quadrant of federation

SHGs and Federations.

was better. There was space for all types, he asserted. One of

the issues that needed to be looked at was how to "de-layer"

Member vs. promoting institution-controlled federations

federations, and ensure that a network of women's institutions

5 Members and promoting institution-controlled

works to empower and not dis-empower.

federations were mutually exclusive.

5 Member-controlled federation had a high possibility

In the post-lunch session, participants were divided into three

of sustainability compared to PI- controlled federation.

working groups, which deliberated on separate issues raised

by the Sa-Dhan study, and submitted a list of recommendations.

C.S. Reddy summed up the deliberations of the working

The groups deliberated on:

groups very succinctly. He urged Sa-Dhan to provide:

"Training of trainers programs" at regional level on how

Group I:

Role of Federations and Facilitating

to promote federations.

Institutions in Strengthening CBOs

To develop training modules for managers, federation

Group II:

Capacity Building: Strengthening Social and

leaders etc.

Financial Intermediation

To develop quality material in terms of manuals or best

Group III:

Financial and Operational Constraints

practices since these were not available.

RECOMMENDATIONS

While commenting on the study's findings, M.K. Khanna,

Development Commissioner, Rural Development, Government

Group 1

of Rajasthan, who was also a panelist said, "The entire

Roles of federations and promoting institutions were

exercise of the national workshop should lead to some sort

evolving continuously with the growth of micro-finance