“ Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed , who traditionally lack access to banking and related services.”
Transparency - Maintaining simplicity and clarity in all activities and operations, so that high standards of fairness can be established in all the dealings.
Responsiveness -Constantly working to identify the changing needs of clients and potential clients, and developing suitable products and services to address these needs thus keeping Spandana ahead of its competitors.
Integrity -Maintaining high standards of conduct, truthfulness and honesty in all dealings, in order to honour the commitment made to our clients and organisation.
Commitment -Performing all activities and tasks with professionalism and enthusiasm in order to give the highest level of client satisfaction and optimal efficiency.
Team Spirit -Working together as to create synergy that results in exponential growth.
SPANDANA HISTORY 1997, Guntur Town, Andhra Pradesh, India. During a hot summer afternoon, when most of the women would prefer a siesta, Mrs. Padmaja Reddy saw a rag-picker woman on the street buying household reject items on a push cart. Her entrepreneurship made her curious. Speaking to her, Mrs. Padmaja Reddy realized that the lady was working very hard but not getting commensurate returns. Despite her efforts, she was able to provide only one meal to her family. This was mainly because the lady was paying an exploitative daily rent for the cart that cumulatively far exceeded the cost of buying scores of such carts. The lack of access to affordable and serviceable capital was leaving little alternative options for her. While a bank would never provide credit to her on many accounts, the money-lender was far too exploitative. Mrs. Padmaja Reddy decided to lend her a little money, enough to buy the cart. The money was given with a promise of timely and reasonable repayments. The hard working woman started using her new self-owned push cart, she could save on the rent cost and repaid the money conveniently from her increased returns. Now this women could afford better meals for herself and her children. She also spread the word that there was an organization which was helping economically active women with loans. It seemed to strike the right chord with several low-income people, and soon there were many waiting to get such loans at the doorstep.
we want to be one of the top 2 global Micro finance Organization by 2012, offering a range of financial and non financial products and services to low income households and individuals to improve the quality of life. we constantly Endeavour's to deliver quality services to our customers and remunerative returns to our investors by maintaining highest levels of transparency and integrity. We strive to be the most preferred employer in the industry."
Lending Banks Equity Funds Insurance Companies branch Credit Assistant Spandana Deploy in the household cash-flows Repayment Loan Repayment Survey a Village Service at doorstep Capital/ Debt Repayment Partnerships Borrowers Formation and training of groups Invest in Productive Assets BUSINESS MODEL Village Selection Group Formation (8-10 Clients) and Training Center Formation Financial Services at the Door Steps
INDIAN MFI UNIVERSE comprises of very few large MFIs but large number of small players It is estimated that there are over 13,000 MFIs in this group of startups, not-for profits or the for-profits that have not managed to achieve a critical scale. Very few scaled/ scalable MFIs exist. Large size MFIs (AUM > Rs.500 cr) Medium size MFIs (AUM Rs.100 to 200 cr) mF as a segment of overall business Not-for Profit MFIs Startups/ Small regional players 1 2 3 4 5 6 7 8 9 10 Spandana SKS Share Bandhan Asmitha Equitas Ujjivan ASA-Gram Vidiyal Basix Grameen Koota Future Financial ESAF Satin Trident Sahayata Aarohan Sonata BWDA Finance Sharda Awareness L&T Finance SEIL Fullerton Cashpor SKDRDP Sanghmitra IVDP Suryodaya Asomi Vistaar
Credit assistant are the base of the spandana As we know every big building has a base and only the strong base can give beautiful shape to any building. same as in spandana credit assistant play very vital role for the Business. Because CA are, of those employee who are close to customer.
Delinquency Management : In case of delinquency / default, CA has to manage the situation diplomatically without hurting the feelings of borrowers. He should motivate other group members to help the delinquent client as promised at the time of loan disbursement. CA should inform the BM well in time and seek his support as required. CA should not become impatient and shout at the borrowers. He should not leave the slum / village without recovery. CA as demanded by the situation, should wait until the group collectively manage to repay the installment. If the CA knows that a loan would fall delinquent, he should go and meet the client one day before the centre meeting and motivate her to repay loan on time. If the delinquent borrower has some genuine reason to delay / default the repayment, CA should discuss with the BM and well in advance and give her the required support.
A holistic field force solution that is especially designed for field agents of enterprises working at the bottom of the pyramid. It is designed to operate in an online-offline manner, collect any kind of data – transactions, text, images, audio, videos – and be utilized for any field process: customer acquisition, collections, marketing, training
Field intensive enterprises that are working at the bottom of the pyramid, e.g. Microfinance Institutions
In a pilot with Ujjivan (MFI) we validated that productivity will increase by 35% and result in a net savings of US $ 15.8 Million annually.
The CA should ensure that he reaches the meeting place on time.
He should see to it that all the group members stand in a line, they should line up one behind the other as per the numbers allocated to them with the group leader standing at the front.
The CA and the members should greet each other signalling the start of proceedings for the day.
The group members should then recite the pledge followed by the CA’s pledge.
If any superior or any other staff member/Visitor, is visiting the centre than he/she should be introduced to the members
All the borrowers and the CA should sit down on the floor. The CA and any other staff members of the organisation should sit opposite to the groups. The CA should not seek any special privileges at the time of centre meetings, like asking for a chair or water. However he is allowed to sit on a mat provided by the borrowers.
The CA should confirm with the group leaders whether they have received all the cards and repayments from the members for the day. If YES than he should proceed further. If NO then he should enquire the reasons for the same with the group leaders.
The CA should collect the loan cards from each of the group leaders and update the cards (Date and signature).
While updating, he should enquire the ALR amounts, which the members wish to pay or withdraw for that day. He should enter the same transactions in the loan cards and centre registers.
He should then collect the cash from the group leaders. He should tally the collected cash with the demand and ALR adjustments/collections for the day.
If there are any prepayments he should collect them and update the centre register and loan cards accordingly. He should ensure that he takes the application for the prepayment members on the same day.
He should make the Loan Disbursements if any, in the centre meeting.
While disbursing the loans he should ensure that the name and amount is entered in the LD form, Demand promissory note and receipt voucher on the application form.
He should seek the signatures of the borrower and spouse on DPN and application and then hand over the cash to the borrower.
He should verbally communicate to the members that they have agreed to stand as a guarantor for the borrower and it is upon their request, a sum of Rs __________ is being issued to the borrower.
He should ensure, collection of GRF, upfront interest, and insurance premium as per the organisations policies.
He should then read out the closing balances of ALR. This is compulsory and the CA should not ignore it as a routing task. In case of discrepancies in the balances on the cards and register, he should rectify the error immediately
After attendance, he should spend a couple of minutes with the members discussing their experiences with the products of the company.
He should inform the member’s if there is any policy change, new products/services introduced by the company.
He should also seek feedback on the organisations products and other information necessary to improve our products.
He should seek information of potential borrowers in the village and meet them at a convenient time.
He should then end the meeting by greeting the members.
Typical the CA should take about 10 – 15 minutes in conducting a centre meeting. He should ensure that all the transactions/communications should be done in the centre meetings. After the centre meeting he should not allow any of the borrower to approach him personally and vice-versa.
He should then moves on to the next centre meeting.
If the Credit assistant is going to attend a second meeting, then the money related to this meeting should be kept separately. The same procedure should be followed in any centre meeting.
Before leaving the place he should check if he has collected all the cash, centre registers and other miscellaneous articles (fevi-stick, calculator, stamp-pad) from the centre.
Typically a CA should conduct 3-5 centre meetings per day with a gap of 30 minutes between each centre meeting.
After forming into groups the group members training schedule is for a period of five days constituting of six hours. The following subjects are discussed:
Introduction, Pledge, Concept and Rules of Centre Meeting, Qualities of Group Leader and Selection of Group Leader -2 hours
Loan Products, Purpose, Fees, Interest and other charges, Repayment Method, ALR, Loan Application Process, Disbursement process, KYC, Joint Liability and other policy details including preclosure rules. - 3 hours
Other Products like insurance etc and revision of day 1 and day 2 - 1 hour
Followings should be covered on all days – These are some of the important points, which the CA should explain as part of the credit policy to the members.
All the members in the group should recommend and accept each other’s liability to avail loans. In case a member defaults, the rest of the group members should pay for that member
The member’s husband should be present at the time of disbursement to ensure that the family members are kept informed.
Aspect like, Spandana being a private entity does not fall under the purview of any Govt loan wavers, subsidies granted by the Govt. Irrespective of any change in Govt policy, the members should abide by the policies of the company
The members should strictly repay the loans and should not pay heed to any rumours/political/bureaucratic statements provoking members for defaulting loans
There are some non negotiable that should be kept in mind when conducting GT.
There should be a minimum 6 hours training imparted to all members and if further training is necessary, should be provided. Attendance should be marked in HALO register during training. Strict punctuality should be observed by members and staff during group training. If members arrive late or are absent, the GT should be postponed to the next day.
The curriculum for GT is as follows
Day1: The Field staff introduces herself/himself to the members of the GT. As the group is already formed, leader is selected in the first training session after CA explaining the qualities to be observed to select the leader. Group leader should posses the following qualities:
Should be honest and have high integrity
Should be an unbiased and not a selfish person
Should be a knowledgeable person
Should be patient enough to manage the group
The group members should then select a leader for their group.
It should be made clear that a group leader is just another representative of the group. Her role is majorly to assist in conducting the centre meetings. Besides this she, shall not have any discretionary powers to decide on who should be a member, who should get a loan, etc.
Centre meeting is the place where three to four groups meet to conduct weekly financial transactions.
They have to arrive at the meeting venue, 10 minutes prior to the start time
Should keep the meeting place clean Should bring loan cards and repayments and submit to the group leader before the centre meeting
They should sit in an order group wise before the CA
Each member should stand up and greet the CA and the CA in turn greets the members
The members should recite the pledge and then the CA will recite his pledge
The members sit in their respective places
After the transactions are completed, they should reconcile their loan cards with the CA
Should call their attendance when asked by the CA
In case the members wish to leave the place before the closure of centre meetings, then she should take the permission from the CA citing appropriate reasons
Introduction of Pledge
Members pledge is recited to make them understand the seriousness of the programme and that no member should default at any point of time. It emphasises on the fact that, the members shall work diligently and honestly for the benefit of the family. She shall utilise the loan effectively and efficiently and make regular payments. She shall also stand by the other members in difficult times. Further the pledge should end, “Whatever I have said and whatever I do, God shall stand witness”. Members should repeat this as many times as they can administer independently without CA’s assistance. This will be followed by explanation on Centre Meetings.
The CA’s pledge is to reciprocate the same seriousness and to make him understand that the job should be conducted in a transparent, sincere and honest way irrespective of caste, creed and political conditions.
In this session, the CA has to explain about the loan products –
General loan is given for both Income generating and consumption purposes. The loan sizes vary between Rs. 2000 to Rs.20000.
The loan with interest is repayable in 50 to 104 equal instalments. Loan should be utilised for the right purpose. It should not be wrongly utilized or spent on unnecessary things. The loan amount depends on the cash flow of the clients rather than the loan cycles
Charges on Loan:
An upfront interest of Y % of Loan Amount is deducted from the loan amount at the time of disbursement. An amount of Rs ____ is collected towards group registration fees. This is a one time fee collected for enrolment of new members.
The interest charged on the loan is XX %. It is charged on a flat basis (explain flat interest rate)
Pre-closure of Loan:
Pre-closure of loan is allowed after 35 weeks with 5 weeks interest. Only in exceptional cases preclosure s allowed before 35 weeks for instance: client migration, does not want to take subsequent loan etc., In case of pre-closure, if the borrower wants fresh loan, application will be taken on the same day of pre-closure and loan will be disbursed next week followed by a detailed appraisal by the Branch Manager. Borrowers should contact Branch Manager / HO if the CA does not take application for subsequent loan or does not disburse loan in the following week of submitting loan application. Branch telephone number and HO telephone number are written on loan card.
Interim Loan is offered selectively. If the branch is offering the interim loan, the following should be covered, else, skipped.
After completion of at least 15 weeks of General Loan, members with good repayment discipline and attendance can avail Interim Loans ranging between Rs 1000 to Rs 5000.
The loan with interest is repayable in 50 to 100 equal instalments. Loan should be utilised for the right purpose. It should not be wrongly utilized or spent on unnecessary things. The loan amount depends on the cash flow of the clients rather than the loan cycles
An upfront interest of Z % of Loan Amount is deducted from the loan amount at the time of disbursement
The interest charged on the loan is XX %. It is charged on a flat basis (explain flat interest rate)
ALR: Additional Loan Recovery (now discontinued)
The CA should clearly explain the concept of ALR and the benefits from it. He should ensure that the members do not mistake this to be as savings. The CA should understand that it is completely out of choice. However the CA should motivate members to pay ALR whenever they have excess amounts over and above the loan installments, so that they can use this amount for repayment of loan when-ever required. Some of the advantages of ALR are as follows
In times of crisis, natural disasters, the members can use this amount without defaulting
Seasonal business people with irregular cash flows can have ALR to adjust them whenever required
People with monthly cash flows can prepay for the next three weeks and hence be secured. However this should not be an excuse to for not attending the centre meetings
The CA should explain to the members that ALR can only be adjusted to the weekly installments. No cash withdrawals are allowed at any point of time. No interest is paid on ALR
Further THE CA SHOULD ENSURE THAT ALR BALANCES OF CLIENT SHOULD NOT EXCEED HER OUTSTANDING AMOUNT.
At the end of GRT, members who require loan should make an application to the branch manager in the prescribed format. Each member should bring three passport size photographs of herself with her spouse, Photostat copy of ID proof (Ration card/Voter ID), two Rs 1/- revenue stamps.
Show the application format
Member should be explained that their signing on a guarantee form is an acceptance of group liability and that they shall repay the loan in case of default of any of the group members
Loan is disbursed on the centre meeting day to all members after they pass through the GRT. Loan is disbursed to individual members at the branches in presence of their Husbands. The members also need to bring their original KYC documents which are cross checked again by the BM/ visiting officers like RM/ DM etc. The members spouses also sign on the Recommendation as part of the form.
Earlier, the disbursements also used to happen in the center meetings which has now been discontinued
Keeping borrower’s welfare and risk mitigation in mind, insurance is made compulsory to the borrowers and their spouses. Spandana has an association with Insurance company for life insurance cover to all the borrowers and their spouses. Product features are given below:
Insurance is compulsory for all borrowers and their husbands
Insurance is done for one year at the time of loan disbursement
Premium is collected at the time of loan disbursement.
Sum Insured is always equal to the loan amount
In case of single women and widows, instead of the coverage for the Spouse, the member itself gets double the coverage
In case of death of borrower or her husband, upon submitting death certificate and ID proof, claim will be settled
By adjusting loan outstanding with the claim amount loan is closed with five weeks interest on it and the balance amount will be paid to the nominee after receiving claim amount from Insurance company.
Loan closure will be done immediately after the death of borrower/spouse and the group members need not pay for the deceased borrower/borrower becoming widow.
In the unfortunate event of death of the client or spouse, the group members should inform to the BM. Group members should submit Death Certificate within a week to the Branch Manager.
The CA has to sum up all the topics discussed in the three day training and he should ask questions to ensure that members understood all the topics explained in the training. The CA should also inform the members about GRT time.
CA should be careful in selecting venue for group trainings and centre meetings. He should preferably conduct these trainings and centre meetings in common places such as community centres/ churches. Training / centre meetings can be conducted in members’ houses only in case there is no alternate place. In case training / centre meeting is conducted in member’s house, he should ensure that not more than one training/centre meeting is conducted in the same house.
Some women play active role in recommending new groups. CA should carefully deal with such situations and should not encourage such vested interests.
Loan repayment installment in centre meeting should only be collected from the group leader when she confirms that she received loan installments from all the group members.
CA should not come to Branch without 100% loan recovery. In case of delay, he should inform the Branch Manager.
CA should respect borrowers and should not cultivate any personal relationship with her/her family members/any outsider.
CA should not accept any gifts/loans/commissions from borrowers.
Should not insist upon ALR every week as it is left to the borrower’s choice. He should only explain them the benefits of ALR.
Should cooperate with other staff in the Branch and ensure smooth functioning
Should maintain personal hygiene and decently dressed.