Micro Banks for Women, was a project initiated by CFDA in 1995, with the support of CHEC, London and GTZ, New Delhi, in the villages located in Citlapakkam block in Kanchipuram District, as a Poverty Reduction strategy , has turned out be a successful ‘’economic empowerment programme for women belong to low-income groups and migrant families in the target area’’. It is owned and managed by the federation of Micro Bank Groups ( MBG), AKSHAYA, since 1998. The MBGs continue to serve with the enhanced Vision of ‘’Creating a Bank for low-income Women by Women’’ and the mission to ‘’provide financial services for the better future of the under privileged population’’.
What is a Micro Bank Group (MBG)?
Micro Bank Group is a Savings and Credit centered group which comprises of 10-20 members, hailing from low-income group. MBGs strongly believes in effective rotation of funds to create more opportunities and to reduce poverty.
MBGs function with a dynamic, flexible and flat organizational model. There is greater autonomy for MBGs in terms of Savings and Internal lending while Zonal cluster serves as a monitoring forum. AKSHAYA, the federation of MBGs, provide policy guide- lines and facilitate larger credit for member groups.
Similar to the concept of funds rotation, AKSHAYA believes in effective rotation of human resources to kindle human power. In line with this policy, Secretary and Treasurer are elected in MBGs and they maintain the group. Their tenure is for a maximum of two years. On successful completion of the first year one of the best performer is graduated to AKSHAYA as a representative and serve for a year. Then she is graduated as the Zonal representative. On successful discharge of her role, two of the best zonal representatives are graduated as Bank Account holders of AKSHAYA. There is a transparent performance appraisal system at all levels to facilitate graduation.
Class room and field based training are given to members, representatives and office bearers of MBGs on Group Management, Federation Management, Funds Management, Records Management and Credit Management. Adequate provision is made for internalization and application of new knowledge.
Monthly Performance Appraisal for MBGs are in place and it is linked to Credit Eligibility.
Key Principles of MBGs
- Internal Resource Mobilization (by way of regular savings),
- Optimal Utilization of Internal Resources (internal lending with pooled Savings)
- Need Based Larger Credit from federation
In the target area where exploitative lending was rampant due to the absence of Savings habit among low income Women, the initiative has promoted regular savings and thereby demonstrated that even poor can save from their little income, pool it and lend it to their group members based on needs at an afford able rate of interest, with a customized schedule of repayment. Over a decade, the members of MBGs monthly savings rate has increased from Rs20/- to Rs100/.
One third of the Group earnings are pooled at AKSHAYA level to meet the larger loans of Groups.
This initiative is helping more than 1300 families to address their various financial needs, by themselves. As of March 2011, 19604 loans, are provided to members, from MBGs and AKSHAYA. The credit turnover ,since 1995 is Rs 7.94 crores.
Transparent accounting and loan processing systems are in place.
The entire initiative is self-managed. The Operational team includes two paid staff from the community, and forty volunteers (AKSHAYA Representatives).
AKSHAYA, as part of their social commitments, donated money and in kind to communities affected during Tsunami and earthquake.
They also jointly manage an Association of elderly women (PONVERGAL) in the same target area, which is taking care of their medical, recreation and pilgrim needs since 2006.
AKSHAYA-Micro Bank Groups have been an inspiration for many Women Self-Help Groups , Farmers Groups and Micro Credit Initiatives in South India., and AKSHAYA team members have trained them in Group and Federation management.