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INDEX
Central aim of micro-finance programme....................................................3 Micro-finance activity..................................................................................3 What is special in AVAG micro-funding programme?..................................4 Types of loans by source and purpose.........................................................5 Group formation and day to day work.........................................................5 Decision making of the Federations of Self Help Groups............................6 Micro finance and the UWC (Udhayam Womens Center)...........................6 Loans and savings charts.............................................................................7
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Year Members 1995-1996 68 1996-1997 188 1997-1998 327 1998-1999 435 1999-2000 614 2000-2001 1101 2001-2002 1600 2002-2003 1741 2003-2004 1800 2004-2005 1950 2005-2006 2000 2006-2007 2334 2007-2008 3245 2008-2009 3466 2009-2010 3478 2010-2011 3726
Rs. 55,552,350 circulating among the groups as loans. To date all SHGs have repaid loans on schedule through fixed installments. Loans are offered for business development , agriculture, education, housing, consumption, family functions, and health, atan annual interest rate of 18 %. far lower than the average market rate in rural areas. So far finance has been facilitated from the following sources for lending: savings generated by SHGs, corpus fundsof AVAG/the Federation, Government Funds and Indian and Pallavan Grameen Bank through SHG linkage. The ratio between SHGs to AVAG field staff is 35/1, which allows effective management. AVAG collects the copies of all receipts and invoices and monitors each transaction. Loan repayment rate is virtually 100 %: During the implementation of micro finance programmes over the past 15 years, only two people have defaulted. Micro-funding programme is the backbone of the activities of integral rural development of AVAG. Capacity building is of prime importance, so constant training is always provided to the groups. The Federations of SHG have a core position in the decision making process of AVAG, not only in the microfinance programme, also in the other activities of the organization, creating an strong bounding relation materialized, among other results, in the strong vocation of continuity of the SHG formed by AVAG. To avoid individuals monopolizing the SHGs and to make sure that every one talks upthe responsibility, AVAG encourages the change of leaders on a regular basis. Empowering lending policies as mentioned below: Loan amounts are awarded gradually, growing in relation to the proven capability of individual members for repayment. Loans are offered for a wide variety of needs. By its experience AVAG learnt that purpose depending loans drives people to cheat and would weaken the trust and relationship between the SHGs and AVAG, and hence it encourages people to be open and truthful with the purpose. As long as the SHG supports and it is confident of the repayment capacity, a member can get loan easily, Group members are encouraged to give priority to each members financing needs, rather than dividing the borrowed amount into equal shares. Re-lending is not dependent on the completion of a previous loan, but rather is encouraged only when there is a genuine need. This system ensures group members will not compulsively re-apply for a loan immediately after the previous loan has ended. To make sure that there is no misuse of funds, AVAG keeps track of all the financial transactions of the SHGs, which is a uniqueness of the organization. AVAG has also successfully mediated with the bankers on behalf of the SHGs to be flexible with the rules for its members. Since the banks recognize the
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important role played by AVAG, they listen to these fair demands. The Groups have a double aim, the micro-funding activities and the debate and action about human rights, community development and other issues.
Under this scheme, each group can sign up for an amount of Rs. 60,000 out of which Rs. 10,000 is subsidy and Rs. 50,000 is loan to be repaid in monthly installments. This scheme has a subsidy component of Rs. 1,25,000 sanctioned by the government to commence agricultural or business activities.
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The group meets at least two times a month. The first meeting of the month is to deposit the savings, to pay back the loans and to decide upon the new loans. The second meeting is allotted to discuss about the issues, projects, participation in the seminars and meetings, report about the trainings and meetings etc Once in a year every group participate in the Cluster meeting, with other groups of the same panchayat (local government), in this meetings are exchanged the community development activities made during the last year (fixing the road, distribution of food in health centers...), the past discussions of community problems inside every SHG are shared with the rest of the groups, and is tried to arrive to a collective action to solve them. When a group t affiliated to AVAG, it is asked to join the federation by way of paying the annual subscription which is Rs.50 per member (Rs.25 for men). The group receives from the federation a set of registers3 to maintain the groups accounts. Each SHG decides on a monthly savings amount (usually between Rs. 50-100 /month/member) which is deposited in the name of the club in the bank With the introduction of AVAG, each SHG opens a bank account to deposit the monthly savings. be aged from 18 to 55 years be a resident of that village not to be a member of any other SHG of any organisation.
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The Womens Federation is responsible for reviewing applications for two separate corpuses, Udhayams own and AVAGs. As stated above, it is the Federation members who are responsible for loan application review. While most of AVAGs staff live in the organizations target area and have extensive knowledge of conditions on the ground, the Federations have an even better check on the pulse of village life. By employing beneficiaries in the micro finance process, AVAG can be confident that financing is being used for pertinent village needs. AVAGs role is more advisory than controlling, although the organization does hold veto power over any decisions to avoid incidents of abuse and prevent corruption lities.
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20,830,771
4,427
in %
48.70% 24.59% 17.20% 6.85% 2.67%
Loan sources
Internal Lending Direct Lending (Bank) RF (Bank) AVAG Loan Udhayam Loan
Total
55,552,350
100.00%
Type
Total
Function Education Medical Housing Loan Repayment Agriculture Business Others Total
22.13 398,000 22 509,100 18.35 369,500 11.44 192,500 10.11 449,200 9.36 217,500 4.98 192,500 1.53 204,650 100 2,532,950
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Women Federation:
Type
Total
Loan Repayment Housing Function Agriculture Education Business Medical Others Total
23.45 410,600 23.07 296,000 20.21 350,500 10.87 146,500 10.67 422,500 6.94 113,500 3.32 103,500 1.46 138,650 100 1,981,750
1,420,000 3,812,700 1,534,500 3,548,000 1,326,000 3,181,000 758,000 2,257,000 798,000 1,188,500 405,000 1,026,000 331,000 438,000 126,400 234,800 6,698,900 15,686,000
Men Federation:
Type
Total
Agriculture Business Housing Function Education Loan Repayment Medical Others Total
1,742,500 30.29 1,114,000 19.36 946,000 16.44 805,000 13.99 593,500 10.32 303,700 125,000 123,000 5,752,700 5.28 2.17 2.14 100
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