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TRANSCRIPT
Sammrudh
Asha
Site V
2
i Micro
Fellow
Visit Re
28.05.1
o fin So
w: Mr. S
eport
1
ociety ‐
Sanju K
Gulbar
Kumar
rga
Abstract
I went to Gulbarga from Bangalore on 28.05.11. Mr. Sanju Kumar met me at the hotel at 08:30 AM
and we started off to attend the weekly loan clients meeting of Samrudhi at the Basavanagar urban
slum. During the meeting, some loan clients paid the weekly premiums on their loans and others
collected their loans from the loan officers. The meeting was well organized, the loan officers had all
their computerized records ready with them and the meeting ended in 15 minutes. After that I asked
some questions to a few loan clients present at the meeting regarding the utilization of their loans. I
then met two loan clients, Smt Gowrammal and Smt Nagamma and interacted with them for about
30 minutes each to know how they have been benefitted from the loans. Subsequently, I went to
Samrudhi’s office where Mr. Kumar explained to me in detail about Samrudhi’s method of working.
Later on, Mr. Kumar showed me the Management Information System practices that Samrudhi
follows for efficient day to day operations. I completed my visit at 17:00 on the same day.
1.
I and M
Basavan
urban sl
and goo
and mak
There w
loan fro
member
as Samr
Basavan
Mr. Sanju K
nagar is a slu
ums in India
od schools. (P
ke lives bette
were 18 loan
om Samrudh
rs who are t
rudhi hasn’t
nagar Gr
Kumar reach
um located i
a, it acutely l
Picture 1 ) Ho
er for themse
clients pres
hi and have
he women w
got the nee
roup Mee
hed the Ba
in urban Gu
acks basic a
owever, I fou
elves and the
Picture 1
ent at the m
e repayment
who have joi
ded funds fr
eting
asavanagar
lbarga. As it
menities like
und that the
eir families.
1 Basavana
meeting. Loa
ts outstandi
ned Samrud
rom the ban
center (wee
t is unfortun
e a good and
women at t
gar slum
n clients are
ing on their
hi but haven
nks. I’ll be m
ekly meetin
nately the ca
d clean envir
he meeting
e the women
r loan amou
n’t been prov
making ‘terms
ng place) at
ase with mo
ronment, go
wanted to g
n who have
unts as opp
vided with a
s’ clear as a
t 9 AM.
st of the
od roads
et ahead
availed a
posed to
loan yet
nd when
they com
clients a
interesti
officers
Samrudh
reports t
activitie
repeated
can see
The lo
took a r
me as I did
are organize
ing and I’ll t
were also p
hi like enro
to their man
s at 20 such
d after a loa
the loan clie
oan officers
roll‐call and
just now. Th
ed into grou
tell you abou
present. Loan
lling new lo
nager and ma
h centres. Th
an officer tha
ents of the Ba
Picture
(The lady h
then called
here are pre
ps having 5
ut that in th
n officers are
an clients, d
aintaining &
he meeting
at they woul
asavanagar c
e 2 Loan clie
aving the ca
each client
esently 350
clients each
e third secti
e the people
disbursing lo
updating rec
started with
d be honest
centre in Pict
ents at the B
alculator and
to either g
loan clients
h. The way S
ion. In addit
e who mana
oan amount
cords. There
h a pledge i
t in their util
ture 2.
Basavanaga
d the person
ive them th
and 1500 m
Samrudhi fo
ion to the lo
age the day t
ts, collecting
are 8 loan o
n Kannada w
ization of th
r centre
sitting right
e loan amou
members. Th
orms these g
oan clients, t
to day oper
g repayment
officers who
where the m
e loan amou
t to her in P
unt or to co
hese loan
groups is
two loan
ations of
ts, giving
do these
members
unts. You
Picture 3)
ollect the
repayme
of 50 we
as repay
over, I a
selling c
construc
business
taken, th
I saw the
have the
ents. The loa
eeks @ 15%
yment for th
asked a few o
clothes, fire
ction work e
ses like cycle
hey had a ma
e loan cards
e entry of ea
an clients are
annual inte
e principal a
of the loan c
ewood, flow
etc. They tol
e repair/cons
ajor say on t
of the client
ch loan avai
e typically giv
rest. So at e
nd ` 18 as r
lients about
wer garlands
d me that e
struction wo
he utilization
Pictur
ts (Picture 4)
led and repa
ven a loan o
each weekly
repayment fo
their occup
s, CDs, cycl
even though
ork, as they w
n of money.
re 3 Loan of
). These card
ayment made
f ` 6,000 wh
meeting, the
or the intere
ations. They
e repair sh
it was their
were the one
fficers
ds contain the
e by them. T
hich is repaid
e loan client
est). After the
y were engag
op, Kirana
r husbands w
es on whose
e photograp
The loan offic
d by them in
t pays ` 13
eir transactio
ged in busine
shop, mino
who did the
e names the
ph of the cou
cers had cen
a period
8.(` 120
ons were
esses like
or house
e work in
loan was
ple and
tre‐wise
records
their bu
about 15
2.
After the
how the
2.1 GoSmt Gow
where s
years an
the lives
of cashflow
sinesses and
5 minutes an
Case Stu
e weekly me
ey had been
owrammal wrammal is
she sells groc
nd before th
s of these u
and updated
d about local
nd was well o
udies
eeting, I met
benefitted b
– Runs a a middle‐ag
ceries. She h
at she used
underprivileg
Picture 4:
d them after
issues and w
organized.
two loan clie
by the microl
Kirana shged woman,
has taken th
to work as
ged women
Loan cards
r the meeting
with that the
ents living in
oans.
hop at Basaround 55 y
he room on r
a maid. The
is that it is
s of clients
g. Mr. Kumar
e meeting en
n the Basavan
savanagaryears old (Pi
rent and has
e greatest im
giving them
r then talked
ded. The ses
nagar locality
r icture 5). Sh
s been runni
mpact that Sa
m freedom f
d to the clien
ssion lasted j
y to know ab
he has a Kira
ing the store
amrudhi is m
from the clu
nts about
just for
bout
ana store
e since 6
making in
utches of
village m
Gowram
loans of
moneyle
has bee
feed he
meeting
2.2 NaI then v
woman.
living be
flowers
moneylende
mmal has bee
f ` 5000, ` 8
enders who
n able to pu
r three gran
g at the centr
gamma- Mvisited the h
She has stu
efore she to
and then ma
ers who cha
en taking mic
8000 and ` 6
used to char
urchase mor
ndchildren w
re, she was v
Pictur
Makes flowhome of Smt
died till class
ook a loan of
akes garland
arge exorbit
croloans from
6000. Before
rge her an in
e items for s
who unfortun
very active a
re 5: Smt Go
wer garlant Nagamma
s X th but co
f ` 6000 fro
ds from them
tant rates t
m Samrudhi
e availing loa
nterest rate o
selling and h
nately don’t
nd was askin
owrammal a
nds (Picture 6).
ould not work
om Samrudh
m. Her mothe
that keep t
for the past
ans from Sam
of 120% per
has done we
t have the c
ng Mr.Kumar
at her Kirana
. She is a 22
k due to her
i this year. S
er or her bro
hem perpet
three years.
mrudhi, she
year. With S
ell in her bus
are of their
r to provide h
a shop
2 year old p
disability. Sh
She has utili
other sell the
tually in de
. She has tak
used to go t
Samrudhi’s lo
siness. She i
r mother. Du
her a larger
physically ch
he had to be
ized the loa
e flowers at
ebt trap.
ken three
to village
oans, she
s able to
uring the
loan.
hallenged
eg for her
n to buy
a market
in Gulba
herself h
guilt fee
business
3. After me
presenta
step pro
1. Villa
villa
its r
arga and thu
has increase
eling of bein
s.
P
Meeting eeting Smt N
ation for abo
ocess:
age Survey: I
ages and coll
residents can
i. It must
the loa
be acce
us the family
d greatly as
ng a burden
Picture 6: Sm
with Mr.Nagamma, I w
out 2 hours a
In order to lo
lect informat
n be conside
t be accessib
n disbursal b
essed by a m
y is improvin
she is now a
on others.
mt Nagamm
. Sanju Kwent to the o
about the wa
ook for poten
tion from loc
red for Samr
le by road. A
begins, they
motorbike. Vi
ng financially
an earning m
She wants t
ma at her ho
Kumar office of Sam
ay Samrudhi
ntial loan clie
cal people. T
rudhi microlo
As the loan o
are watchfu
llages that d
y. Nagamma
member of t
to take anot
me with flow
mrudhi where
operates. It
ents, loan of
The village m
oans:
officers have
l at the onse
o not have a
a told me th
he family an
ther loan to
wer garland
e Mr.Kumar
t works on th
fficers from S
ust fulfil thre
to go to the
et only to sele
any roads are
hat her confi
nd does not
expand her
ds
gave me a d
he following
Samrudhi go
ee condition
villages ofte
ect villages t
e a disadvant
dence in
have the
r garland
etailed
step‐by‐
o to the
ns before
en after
that can
tage but
considering the limited means of transportation, staff and man‐hours that Samrudhi
can afford, this criterion was reasonable.
ii. It must have more than 40 below poverty line households. Mr. Kumar told me that this
criterion had to be satisfied as it helped in the formation of close‐knit groups. His
experience was that groups of women of different economic statuses didn’t work.
iii. It must have a stable law and order situation and that there must be no political
interference in Samrudhi’s work. He told me that as Samrudhi cannot enforce law and
at best can only complain to the police, they avoid villages that are prone to law and
order problems.
2. Projection Meeting: After identifying the villages, the loan officers go to each village and hold a
meeting there at a public place and address a gathering of around 500 women about Samrudhi’s
loans. Out of these 500 women, only about 150 or so turn out to be candidates who are
interested for a loan and a second meeting with these women further lowers down the number
to 50. A database of these women is then prepared.
3. Gathering of information about each potential loan client: These 50 potential loan clients are
then given a form ( Picture 7 ) that requires them to provide information about themselves,
their dependents, their land and cattle ownership, type of house ( brick/mud/cement/,house
size ) they live in, and about their belongings like TV,two‐wheeler,cycle, etc. Information
provided by them is verified by Samrudhi’s staff and based on that the potential clients are
assigned points. For example, houses made of cement,bricks,stone and soil are assigned points
3,2,1 and 0 respectively. Similarly, own agricultural land, leased land and no land are given 2,1
and 0 points respectively. The aggregate is calculated by summing the points of each asset
category and becomes the potential client’s cumulative. If this exceeds 15, the woman is not
considered for a loan and otherwise, she is considered and becomes a loan client of Samrudhi.
(Picture 8)
4. Formation of groups: Mr. Kumar told me that group formation is the most important step of
the entire chain as the repayment of a defaulter’s loan will be done by the other clients only
when there is trust between them. So, Samrudhi has laid down specific guidelines for the 5‐
member group formation taking into account the realities of life in villages:
i. The clients will be forming the group themselves. The clients are informed at the very
outset about the joint liability clause in case of defaults. Therefore, they are careful
while forming a group and do so after taking mutual trust into account.
ii. No close relatives like sisters, mother‐in‐law/daughter‐in‐law, mother‐daughter, sisters‐
in‐law etc are allowed to be in the same group as this makes things difficult for the loan
officers when disciplinary action up to and including removal of a client from Samrudhi
has to be taken.
iii. The clients in a group must be neighbours as it makes communication between them
easier. For instance, when a loan client goes out of the village and is unable to attend a
weekly meeting, her neighbours have the information and they can convey it to the loan
officers.
5. Com
for
finis
the
Day
the
dail
Sam
Day
kno
mus
Picture
mpulsory Tra
the loan clie
shes at 10 AM
clients at th
y 1: The clien
loan would
ly for five da
mrudhi does
y 2: On the s
owledge abo
st be used o
7: Form giv
aining Progra
ents. The trai
M and an ev
eir fields and
nts are given
be beneficia
ys to ensure
not accept t
second day, t
ut repaymen
nly for the p
ven to memb
am ( CTP ): Af
ning program
ening sessio
d homes is n
a primer on
al to them an
that they ar
humb impre
they are info
nt and intere
urpose of inv
bers to dete
fter the form
m is conduct
on that starts
not affected.
the mission
nd are taught
re able to sig
essions.
ormed about
est. It is also
vesting in an
ermine their
mation of gro
ted in two se
s at 6 PM so t
The program
and objectiv
t how to sign
gn by the end
t Samrudhi’s
made clear
n income gen
eligibility fo
oups, a five d
essions, a mo
that the daily
m encompass
ves of Samru
n. They are re
d of the train
loan produc
to them that
nerating busi
or a loan
day CTP is org
orning sessio
y work sched
ses the follo
udhi, are told
equired to p
ning program
cts and are im
t the loan am
iness.
ganized
on that
dule of
wing :
d why
practice
m.
mparted
mount
Day
givi
to m
Day
are
hav
Sam
Day
of t
app
the
Afte
are
6. App
clie
the
y 3: The conc
ng them exa
make each lo
y 4: The busin
given trainin
ve been impa
mrudhi impar
y 5: A group
he loan clien
prove a loan
loan by the
er the CTP, t
held before
proval of loan
nts. On the d
branch man
Picture 8:
cepts of repa
amples with
oan client un
nesses that t
ng as per the
arted training
rts financial t
recognition t
nts and base
request, the
manager.
he manager
11 AM so as
n proposals:
day of the fir
nager before
Assesment
ayment on th
numbers. Th
derstand the
the loan clien
eir requireme
g by Samrud
training to th
test is done.
d on his asse
e loan officer
identifies a p
s to not inter
Each weekly
rst weekly m
giving the lo
t of the pote
he principal a
he calculation
em would de
nts want to e
ents. For inst
dhi. Often, th
hem.
The manage
essment give
r retrains the
place for we
rfere with th
y‐meeting ce
meeting, the c
oan to each i
ential clients
and interest
ns may seem
efinitely be a
engage in ar
tance, wome
he clients are
er of the bra
es a yes/no t
e person till s
eekly meeting
he working h
entre has typ
consent of al
individual in
s for loans
are revised a
m quite straig
a time taking
e identified a
en engaged i
e adept in the
nch does a s
o the loan re
she is assesse
gs in the villa
ours of the c
pically 5 grou
ll the 24 othe
order to inc
and reinforc
ghtforward t
g task.
and some of
in making ca
eir businesse
survey of the
equest. If he
ed to be elig
age. The mee
clients.
ups, i.e. 25 lo
er clients is t
ulcate a feel
ed with
o us but
f them
andles
es and
e houses
doesn’t
ible for
etings
oan
taken by
ing of
group responsibility in the clients. The loan amount is then entered into Samrudhi’s MIS which
marks the final approval of the loan.
7. Disbursal: The branch manager then asks Samrudhi’s account department to make the loan
disbursal. At loan amount collection, husbands of the clients are required to come and be a joint
signatory. However husbands are not allowed to attend the weekly meetings as other women
tend to become shy and not speak up in the presence of the husbands of their fellow‐clients.
8. Loan utilization check: 2 weeks after the loan has been availed by the client, the loan officer
visits her house/business location to check whether the loan has been utilized for the intended
purpose. For example if she has taken the loan to buy items for her grocery store, he/she checks
if the supplies are there. In case if the loan officer finds that the loan amount hasn’t been
utilized, the client is asked to return the amount to Samrudhi and collect it back when the
payment for the intended investment is to be actually made.
9. Weekly meetings: During the weekly meetings, the progress made by the clients in their
businesses is monitored and disbursal/collection of loans and repayments is done.
10. Office work: Work like transferring money to and from the bank, entering records into the MIS,
etc is done by the accounts department of Samrudhi.
After the presentation, I asked him a few questions. The questions and his replies are as follows:
Myself: How do you deal with the village moneylenders who would obviously look at your
operations as a threat?
Mr.Kumar: We do two things to deal with the village moneylenders. Firstly, we organize the loan
clients themselves to take on the lenders by showing them how exploitative the lenders are and how
the loans are going to help them. Having the clients on our side is a great advantage to us while
dealing with the lenders. Secondly, in rare cases when the lender threatens our staff, the senior
officers of Samrudhi go to the lender and warn him about his behaviour and threaten him back by
telling him about their contacts. Till now, we haven’t had any incidences of violence while dealing
with moneylenders.
Myself: How do you select the branch managers and the loan officers?
Mr.Kumar: The branch managers as well as the loan officers belong to the same community in which
they work. They must have a down to earth personality and should know the art of doing business
with mind and as well as heart. Of course, experience is important when one is considered for the
branch manager position.
Myself: Can you elaborate on how you check if the loan has been utilized for the intended purpose
by the clients?
Mr.Kumar: The first thing that we keep in our mind when checking for loan utilization is that there
should be no harassment of the clients. So, we have given clear instructions to the loan officers that
their behaviour must be courteous. The loan officers go to the business location (grocery
store/firewood shed/home) to check the purchase of stock (grocery items, tools for minor
household construction, flowers, buffalo etc ) and also enquire the neighbours of the client. In the
past, we have seen availed loans being used by some clients for buying personal belongings like
Sarees, TV etc. If we suspect this, we tell the client to return back the money immediately and
exclude her from Samrudhi. Otherwise, the group has to take responsibility and make the
repayment.
Myself: What kind of business training do you impart to loan clients?
Mr.Kumar : Usually, the clients are already quite adept in the business that they want to avail the
loan for. For example, they /their husbands already know how to milk a cow, make garlands,
perform minor construction work, repair bicycles etc. We on our part have trained some clients in
businesses like making Agarbattis, candles and handicrafts. Our main aim is to inculcate financial
discipline in the loan clients through weekly meetings and advice, thus enabling them to invest, earn,
save, reinvest, save more and thus move towards greater financial well‐being.
Myself: You mentioned about micro‐insurance for clients during our return to your office back from
the weekly meeting centre. Can you tell me more about that?
Mr. Kumar: While availing loans from Samrudhi, the clients are automatically insured for losses in
certain businesses due to natural factors. For instance we provide insurance cover for livestock but
not for perishable goods and multi‐asset businesses ( a grocery store is a multi‐asset business as it
involves ownership of items of different kinds like grains, processed food, non‐eatables like
combs,toys etc ). This is because of problems in defining such asset classes in insurance schemes.
Clients are informed about this at the time when they avail the loan.
Myself: How are you moving towards self‐sustenance?
Mr.Kumar: There are two aspects of self‐sustenance: operational and financial. By operational self‐
sustenance I mean not having to depend on the banks for providing loans to new clients and being
able to use the balance available from loan repayments to give loans to these clients. We have
already achieved 80% operational self‐sustenance, meaning we depend on the banks for only 20% of
the loan money for new clients. Financial self‐sustenance means not depending on the any external
source even for providing salaries to the staff and for administrative and operational expenses. For
achieving full financial self‐sustenance, we need to have a minimum loan portfolio of ` 150 lakh. What this means is that once we have such an amount of disbursed loan, our monthly loan
repayment rate would be equal to the sum of our current monthly expenditure on staff, repayment
of our loans to the lending banks and other heads as well as for disbursing loans to new clients. I am
expecting this number to be reached by this July given institutions like IDF, Ananya and the Sharda
foundation provide their sanctioned amounts of ` 50 lakhs, ` 40 lakhs and ` 20 lakhs respectively by July. Presently our client base is 350 but our member base is 1500. In other words, there are a lot of
potential clients waiting for loans.
4. Management Information Systems of Samrudhi
After the presentation, Mr.Kumar showed me the systems Samrudhi has in place to ensure
transparent and efficient operations. They have a comprehensive MIS in place that is easy to
maintain and is also very useful to ensure that the staff of Samrudhi report the expenses correctly.
There is
dates ,lo
A transp
expense
account
disbursa
statione
these re
a loan recor
oan amounts
port register
es. There is a
s departmen
als for that d
ery, members
ecords. I was
rd dairy (Pict
s and purpos
records (Pict
staff daily c
nt at the end
ay at the diff
s savings and
impressed h
ture 9) ( the c
se of loan ava
Picture
ture 10) the
ash flow rep
d of the day.
ferent centre
d loan repay
how systema
computerise
ailing for eac
re 9: Loan R
travel detail
port (Picture
This report c
es that he vi
yment history
atic they hav
ed version is
ch client are
egister
ls of the loan
11) that eac
contains the
sited. There
y etc. Samru
e been in th
also there )
entered.
n officers inc
h loan office
details of th
are other su
dhi’s office h
eir work.
in which the
luding fuel
er has to give
he cash recei
uch records f
has a large a
e names,
e at the
pts and
for
rchive of
P
Picture 10
Picture 11:Da
0: Transpor
aily Cash Re
rt Register
eceipt Repoort
5. Concluding Remarks
On the whole, I would rate the work being done by Samrudhi as very good. Their work has put many
women on the path of better financial security. They have around 1500 members who would
become loan clients as soon as they get the funds to give loans. They also have plans to expand their
member base by surveying new villages. Mr.Kumar also told me that he wants to train women who
are in the dairy business through Samrudhi to improve their processes so that they can expand their
businesses.
I found Mr.Kumar to be an intelligent and receptive person who has the capability of getting things
done. Moreover, as he comes from the north Karnataka region, he has a sound understanding of the
local circumstances which has enabled him lead Samrudhi successfully till now and to chart out its
future plans. His enthusiasm towards his work is praiseworthy. He is also taking care of the Asha
Deepa school of the Blind in Bidar and wants to start a chain of local centres that provide support
classes for Mathematics and English for school children in Gulbarga.
I therefore fully support Asha Stanford’s support of Mr.Kumar’s fellowship and would recommend
further collaboration.