The presentation is the summary of CFDA's experience in Community based micro finance initiative. The project was commenced in 1995 and continue to be operated by the local community since 1998. They are functioning under a Registered entity,''AKSHAYA'' and cater to the financial needs of about 2000 households in the urban fringes of Chennai

2. Micro Credit
through
Micro Banks
• It is an alter-native
system of credit,
designed and managed
by Women.
• It is emerging as a
priority sector lending
among the mainstream
banking sector
• It is a link between the
grass root and
mainstream financial
system

3. Promoting Organisation
• Centre For Development Alternatives [CFDA],
Chennai
• It is a not for profit development organisation
• It functions from 1990
• Vision: Constructive Participation in
Development
• Mission: Creating an alternative credit
institution for Women
• Project intervention commenced in Dec,95

4. Vision
Constructive Participation in Development
 Building Organisational capacity for Poor
by promoting MBGs
 Expanding individual capacities thro’
training and learning opportunities
 Extending support services to help
themselves
 Explaining and providing avenues for alter-
native initiatives for economic
empowerment.

5. Mission
Creation of alternative credit institution
 Community level mobilisation of women
 Promotion of internal resource mobilisation
and utilisation
 Functional community credit management
thro’ simple systems
 Exchanges for learning and sharing

6. Area& Client profile
• Villages that become urban fringe of
Chennai, situated at Citlapakkam block of
Kanchipuram District.
• Poor Women belonging to S.C;S.T and
M. B.Cs.

7. Problems
addressed by the project
• Shrinking employment
avenues for rural poor in
agriculture due to rapid
urbanisation and
consequent conversion of
agricultural land for
housing and commercial
use.
• Increasing burden of
Women on account of
multiple responsibilities.
• Lack of access to
affordable and institutional
credit due to assetlessness
and exploitative terms of
non institutional credit.
• Need for organisation of
poor women.

8. Project objectives
• Improve the status of Women through:-increased
and easier access to credit both for social and
productive requirements.
• Social mobilisation and leadership development
among women.
• Promote savings among the poor households.
• Sustained development through self help groups
centered on savings and credit.

9. Project Constraints
• The target area is highly
politicised that could have
adversely impact on
repayment behaviour and
attitude of client group.
• Social cleavage [disparity]
in terms of caste could
affect the functioning of the
groups.

10. Team involved
• Two- Six facilitators
• Programme officer
• Hon .Admn. Officer
• Chief executive

11. Intervention Approach
Two fold:
Enlightenment approach Empowerment approach

12. • Savings campaign
• Exposure visits
• Mobilisation of
women in to Micro
Bank groups
• Capacity building
training for the clients
• Apex body of Micro
Bank groups

13. Women’s credit needs are different
• Women’s credit needs are
distinct. They are small,but
frequent and urgent.
• They borrow for family needs,
not for personal requirements.
• They are out of mainstream
financial system.

14. Functional Process
C o n ta c t m e e tin g s
[F a c ilita to rs ]
A p e x b o d y
F e d e ra tio n o f g ro u p s
[P re c u rs o r to th e A lte rn a tiv e C re d it In s titu tio n -M IC R O B A N K S F O R W O M E N
C a p a c ity b u ild in g tra in in g
O n th e fie ld tra in in g
C la s s ro o m tra in in g
In te r a n d In tra g ro u p le a rn in g
In itia tio n M e e tin g s
[P ro g ra m m e o ffic e r o r F a c ilita to rs ]
F o rm a tio n o f S a v in g s a n d C re d it g ro u p s
O rie n ta tio n m e e tin g s
[P ro g ra m m e O ffic e r]
D a ta c o lle c tio n
[F a c ilita o rs ]
M IC R O C R E D IT
P ro c e s s o f In te rv e n tio n

15. • Data Collection- To identify Potential Clients
• Data Analysis- To understand the poverty rating
of the target population and clients
• Contact Meeting- To introduce CFDA, its
objectives and the basis of the intervention
• Orientation Meeting- To Provide specific details of
Micro Banks for Women [MBW],
• Savings&Credit groups [S&C groups] and
demonstration of its functions
• Initiation meeting- To introduce procedures and
rules of S&C groups, select office bearers, and
demonstrate the functions of the group.
• Training- To expand the capacities of the clients.

16. • Secretary to look after the record keeping and
to enable the group to implement the decisions
• Treasurer to take care of financial discipline
• Chair person on rotation to conduct the
meetings.[We deliberately avoid the position of
President.]
• All transactions to take place only in the
meeting to ensure transparency.
• Each time three members would attend to the
money transactions.

17. Mutual Support
• It is the quintessence
of the S&C groups.
• It recognises the
capacity to mobilise
resources internally .
• It borrows from
external sources to
meet the deficit rather
than to meet all of its
needs.

18. Capacity Building Training
• Capacity to set achievable
goals
• Capacity to manage the
group
• Capacity to manage the
funds
• Capacity to maintain
records
• Capacity to maintain
group dynamics
• Capacity to plan &
manage Micro business
initiatives

19. Training in Key areas
 Financial management
 Book keeping and
accounts
 Sharing of
responsibilities
 Collective decision
making
 Small business
development
 Management of
federation

20. Support Services
• Constant, close
monitoring of groups
• Simplified financial
management systems
and practice
• Advice to identify
problems and resolve
crisis
• Institution building

21. Opening new avenues
• Build links with other
groups
• Establish contacts with
banks
• Learn from established
groups.
• Identify potential
income generating
activities from other
groups.

22. • Special Savings to increase
the availability of funds for
rotation.
• Forming and functioning of
an apex body of MBGs to
build up the institutional
capacity.
• Initiating income generating
activities with internal
funds.

23. Creative
Strategies
• Direct approach (Base-line
Survey) in group formation
• Sensitising the entire group to
focus on a single goal
• Shared vision and knowledge
enriched team
• Ientification of poor through
Poverty Identification Rating
( PIR )
• Thrust on local resource
mobilisation and its
utilisation
• Identification of aspirants for
IGA through Entrepreneurial
audit

24. Creative
Strategies
• Close, consistent and
comprehensive follow-up
action at all levels.
• Identification of qualified
personnel to manage apex
body through performing
skills audit & provide them
with on the field
opportunities for
development
• Self-assessment of
capabilities at regular
intervals
• Improved managerial
information system to
monitor the progress

25. Management Information Systems
REPORTS
• Follow-up reports by the staff team
APPRAISALS
• Monthly evaluation of the group based on a point
system & sharing the outcome with the
representatives of groups during the zonal
meetings
• Self appraisal of performance by zonal cluster
representatives on monthly basis

26. AUDITING
• Monthly statement of accounts from MBGs
indicating the receipts,expenditure, loans and age-
wise analysis of receivables
• Internal auditing of group accounts at office and
sharing of findings at the zonal cluster meetings
• On the spot verification of accounts and cash on
hand
REVIEWS
• Monthly review meetings of staff, apex body
representatives and Zone Representatives to take
stock of the outcome of the intervention

27. Accomplishment
Promotion of Savings habit among the client groups.
Initiation of group lending process among them.
Habit of repayment in time.
Development of capacity among the clients to manage
their group and finance.
Social mobilisation of Women and enabling them to
attain self confidence.
Support for income generating initiatives.

28. Accomplishment
• Forestalling interest that would have gone to the
money lenders.[Calculated @35% for ten weeks
=182% per year]
• Building up of group funds [1/3 rd of the total
interest earned] among the groups that have crossed
twelve months
• Maintaining around 95% recovery rate as per
schedule and the remaining as delayed payment for
internal funds and 100% for external funds.

29. INCOME GENERATION ACTIVITIES
Food processing Petty Shops & Others Repairs & Services
Agriculture & related Push Carts Wire Bags
Cloth retails Plastic Molding Others

30. Sustenance of existing groups
 Creation of Zones as an intermediary level to apex body.
 Monitoring of groups at zonal level by two
representatives from other Zones and a staff
 Color coded performance appraisal by the group
themselves and sharing them with others
 Zonal level follow-up action to rectify the deficiencies
of the groups
 Zonal level sharing sessions to enable others to know
the happenings in the group
 Need based Inter group learning sessions
 Introduction of rolling trophy for the best group

31. Self help- A Dawn in Women’s
life
Micro Bank groups-
• Create grass root institution
for women
• Develop institutional
capability to combat
poverty and exploitation
• Enable to assert self dignity
by moving from receptor
state to decider stage.