Sa-Dhan Newsletter Volume 5 Issue 2
Operational Costs of Delivering Microfinance : Banker's Perspectives
commercial banks in rural areas of India can successfully
4.
S/he should be willing to avail financial services to
improve income.
undertake mF programmes.
5.
Preference is given to women.
Functional mode
The groups are formed by the bank staff. The following
There is no intermediation by any NGO, either as financial
guidelines are kept in view while forming/recognising a
intermediary or as social inputs provider. However, bank
group in OBGP:-
arranges need based trainings for skill upgradation of the
i)
It should be homogeneous. There is no restriction
clients through related government departments or private
of caste, creed or sex in formation of groups,
trainers/master craftsmen. The development managers (DMs)
individuals who group together should have a
deal with the poor at the individual, group and centre level
homogeneous economic background.
and has the responsibility of liaisoning with various
constituents of the delivery system until the poor and their
ii)
Preference would be given to women to form groups.
institutions become self-reliant. The DM is responsible for
mobilisation of rural poor for group formation and nurturing,
iii)
Women groups should have only female members.
providing financial services, facilitating linkages (backward
iv)
The group should not have more than one member
and forward) and catalysing their empowerment. The DMs
from the same family.
have been placed where the project is being implemented
by a branch. At other branches regular branch managers
v)
There would be five members in each group
carry out these functions.
vi)
All members of a group should belong to the same
village.
Induction of facilitators
vii)
The groups are informal.
After three years of operations, the project got expanded
to a large number of villages, particularly in Dehradun. It
viii)
If an existing member drops out, a new member may
was no longer feasible for the DM to meet the rising demand
be inducted to fill the vacancy on consensus of the
of burgeoning clients. So came the facilitators, as financial
existing members.
agents, enabling to meet the demand of the neighbouring
villages for mF services. The facilitator is, generally, a
As high as 88% are women clients. By design the project
member of one of the groups or a family member of a
is for rural areas, as such all clients are village based.
client. Each facilitator looks after 12 centres every week,
consisting of about 100 to 120 groups. The facilitators are
Economic status: Since the project specifically addressed
paid by the clients to whom s/he provides the services and
the poor, no member owned more than 2 hectares of land,
are not employees of the bank. The institution of facilitators
which is one of the parameters for deciding poverty. In
has helped bank reach out to 90 villages in Dehradun;
terms of land holding, one-third members are landless, 60%
benefiting a larger population and creating employment
are marginal farmers (holding up to 1 hectare) and 7%
opportunities to the local youth.
are small farmers (holding 1 to 2 hectare). In rural India,
land holding has direct bearing on economic status and
Target clients/Formation of groups
people holding up to 2 hectare are considered poor.
The project aims at providing benefit to the poor. The poor
are generally recognised by the official definition of 'below
Landholding Pattern of Members
poverty line'. However, experience has shown that in many
cases marginal families keep sliding down the 'line' due to
1 to 2
natural calamities or loss of asset or earning family member
Hect
or sickness in the family. Therefore, no official identification
Landles
7%
is necessary, as long as group members treat one eligible
s
to be the client and one assimilates into group dynamics.
33%
Up To 1
Other criteria are as follows:-
Hect
60%
1.
The person should be of minimum 18 years old.
2.
S/he should be poor.
3.
S/he should be willing to work and engage in some
economic activity.
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