Area of operations – In present organizational form there is wide scope & jurisdiction of catering clientele across India, though SELF has initially chosen to work in rural Maharashtra. The entire cumulative loan disbursement over the period of previous four years is made within boundaries of Maharashtra.
Strategy for financing:
SELF currently offers credit facilities to poor woman for meeting their income generation needs, consumption needs, working capital needs and diversifying income sources by investing in livelihood activities.
Loan Repayment Intervals are Monthly, Fortnightly, and Weekly mode. Repayment intervals are mutually decided pertaining to purpose of loan and convenience of a group of borrowers. Thus the repayment intervals are flexible to customer needs.
Short Term (12 Months) – Micro-enterprises Start-up, procurement of agri-inputs
Mid Term (15 to 18 Months) – Working capital for micro & small business.
Long Term Loan (24 Months) – Capital for additional asset creation.
SELF provides credit to the member of SHG & JLG for startup of small and micro enterprises. It includes agriculture inputs, retail and petty shops, livestock and meeting various needs like education, health & sanitation etc.
A Compulsory Group Training (CGT) is carried out by Credit Officer for group of the SHG/JLG members. At least two or more CGTs are imparted according to their need. They are given inputs regarding Credit products offered by SELF. Financial need assessment of on basis of activity is done and amount of loan is decided. Over financing and under financing affects the viability of enterprise and hence the amount of loan is worked out based on it along with his own investment/ contribution.
During CGT period, Credit Officer collects primary individual KYC from group members. Micro-Credit History of each individual is verified with Crif-Highmark, a Credit Information Bureau for MFIs. If the applicant does not fulfill the eligibility norms stipulated by RBI, she is asked to fulfill the norms within specified period. If she fails to accomplish the same within that period further processing of loan for her is halted and remaining members are forwarded for credit processing.
Once the Group has comprehensively understood the products & is prepared to enter into agreement for proper utilization of loans for activities under consideration, Branch Manager undertakes a Group Recognition Test (GRT). If the test is passed satisfactorily by whole group the Proposal is forwarded with required document to Head office where it is sanctioned and cheques send for disbursement .loan application forms and agreements printed in vernacular language are filled and send to Central Credit Processing Unit at Head Office. The client information as well as loan agreement information is entered into software ‘BIJLI’ (Business Information Justified & Logically Integrated) developed by Force 10 Technology, Kolkata. The software works online as well as offline. The information is collected & recorded through Tablets and directly entered in Cloud database. It is immediately available for Credit Verification Team situated at Head Office.
Delivery Mechanism for Disbursement
Disbursement processes are well defined & meticulously followed.
SELF has adopted a policy to disburse the micro-loans only through bank. It provides financial inclusion to the rural poor women & reduces the possibility of misappropriation. It increases the transparency in the process.
Due to disbursements through Cheques, the women open their saving bank accounts which provide them the status of bankable. In case, if the client doesn’t have bank account or access to bank, the Credit Officer assist those to get accounts opened in the service area bank.
Disbursement meetings are organized at the convenient time of all the members of group. In case of absence of any member, the disbursement is postponed as it should be in presence of all the members. The cheques are distributed to each borrower by Credit Officer under supervision of Branch Manager. This again reduces risk and brings in transparency.
Each group from particular village or center is provided with suitable recovery date. A Credit Officer is assigned to particular Collection Route that is mapped logically and by using Critical Path Method (CPM). Fixed time & date to be followed for entire loan repayment tenure. Collection Meetings are usually arranged between 7.30am to 1.00pm depending upon the convenience of borrowers. The collection meetings are taken at pre-decided venue of Group’s convenience. Each individual remits her installment amount to group leader in presence of Credit officer. Credit officer collects the gross amount and musters the collection into BIJLI software through tablet and also provides hand-written receipt of the same to Group for their records. The records from Loan Sanctions to entire collection are maintained in a file and it is kept with Group Leader.
By using tablet for mustering the collections immediately provides Real Time data to Branch Manager as well as Head Office.
Credit plus Activities:
Minimal credit does not fulfill the requirements of the women. It is also important to build their capacities in order to utilize the credit for productive purpose and generate incomes. It is also seen that the women lack financial literacy and hence SELF provides trainings and handholding support for:
- Financial Literacy
- Entrepreneurship development
- Skill based trainings
- In order to provide Social Security to the family, SELF provides Insurance to the borrower and her spouse. Since it is difficult for them to access insurance facilities, SELF provides them the policies and settlement of claims at the doorsteps.