Loan Journey (1)

Loan Journey: A study on spending of loan amount and its repayment by Informal Sector.

SUBMITTED BY: Ashish Dhingra

SUBMITTED TO: Ms Chhaya BhavsarProf K.K. Krishnan

Summer Internship With Sewa 2015 2

Agenda:• Problem.• Methodology• Analysis: 1. Analysis of Loan Issued.2. Purpose wise loan.3. Spending.4. Repayment.• Cases with Analysis.• Scope• Findings/Observation.• Recommendation.• Limitations.

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Problem:

1

•Case studies of woman on how she has spent the loan amount.

2

•Factors which are creating problem for repayment.

3

•Is there any scope for new saving products?


Methodology: Primary Research : This was done through direct interviews of the

following respondents.1. Individual Interview of ben.2. Focus Group Discussion of ben.3. Spirit team members.4. Sewa bank employees.5. Sewa office employees. Secondary Research: It was collected through internal resources.1. Sewa Annual report2. Official records (Relation in quantity of land possessed and amount of

loan issued, loan granted and repayment)3. Forms ( Bachat Mandal, Loan issue form) 4. Information from Website.

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District Block Villages

Chota Udepur Bodeli Ratanpur Watada Panej Panibar Nanidumali Anyadri Jeetapur Mawli

Mehesana Nandasan Kadi Sarsav Chandra

Anand Anand Bhatiyapur GambhiraChaklasi

Area Covered:


DATA ANALYSIS

BODELI• Fig 1: Explains Loan

Issued in each financial year.

• Fig 2: Purpose of the loan issued.

• Agriculture is dominating.

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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-150

5000000

10000000

15000000

20000000

25000000

30000000

35000000

27897006846000 8630000

1162500015248000

2425250026420000

33668000Gross Loan Issue

Financial Year

Amou

nt

05000000

1000000015000000200000002500000030000000

Purpose wise loan Sanction

2008-092009-102010-112011-122012-132013-142014-15

Amou

nt


Anand

• Fig 1: Explains Loan Issue in each financial year.

• Fig 2: Purpose of the loan issued.

• Portfolio is much diversified.

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2009 2010 2011 2012 2013 2014 20150

10000000

20000000

30000000

40000000

50000000

60000000

13209325

2817193235237590

37754249

5242654858365811

28310236

Gross Loan Issued

Year

Amou

nt

0

5000000

10000000

15000000

20000000

Purpose wise loan Issued


Spending Of Loan:

• Agriculture:

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Rs.3000-5000 Rs. 5000-15000 Rs. 15000-25000Seeds Seeds WaterWater Pesticides FertilizerFertilizers Fertilizer Seeds

Pesticides

Labor

Machine

TractorTransportation to Market


MortgageBodeli:1. Land Release 2. Rickshaw Release

Nandasn:3. Land Release4. Debt Repayment

Anand:5. Land Release6. Shop Release7. House Release8. Jewelry Release

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Mortgage

Land Release

Rickshaw Release

Jewelry Release

Shop Release

House Release

Debt Repayment


Business:

Bodeli1. Basic Need Fulfill.

Nandasan2. Basic need fulfill.3. Growing Stage.4. Expanding Business.

Anand:5. Basic Need fulfill.6. Growing Stage.

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•Basic Need Fulfill

Rs.5000-20000

•Growing Stage

Rs.20000-50000

•Expanding Business

Rs.50000-70000


Household:

• If loan amount: 8000-15000 Only 1st fig: Applicable.

• If Loan amount 15000-30000: Both figures are applicable.

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House loan

Bricks

Cement

Pipes

Iron

Room

Toilet build

House loan

Electric work

Room

KitchenPlaster

Paint

Fig: 1

Fig: 2


Education:

Bodeli 1. College fee.2. Hostel Fee

Nandasan:3. College Fee Case.

Anand:4. School Fee.5. College Fee.

Source: Rest all options are way of spending both in School fee and College fee.

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Education Loan

College fee

Books

School Bags

StationarySchool Dress

Hostel fee

School Fee


Animal:

• Bodeli1. Buffalo

• Nandasan1. Every Case was seen. • Anand1. Every Case was seen.

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Animal loan

Buffalo

Cow

GoatFodder

Doctor Fee


Repayment: Bodeli• In gross repayment include

outstanding amount with interest.

• Delayed loan percentage driven from outstanding amount of loan with interest.

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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-150

5000000

10000000

15000000

20000000

25000000

30000000

3060900

7693317 976818412156464

17178401

2643507728148013

20569325

Gross Repayment

Financial Year

Amou

nt

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-1505

101520253035404550

1.720.610000000

0000010.610000000

000001 0 1.01 2.08 3.42

47.8Delayed Percentage

Financial Year

Perc

enta

ge


Repayment: Anand

• Repayment: A reason to worry.

• Figures of delayed loan amount are astonishing.

Source: Figure including outstanding amount.

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2009 2010 2011 2012 2013 2014 20150

5000000100000001500000020000000250000003000000035000000400000004500000050000000

11045053

2444797528464888

33194541

14567965

45902341

19647709

Gross Loan Repayment

Year

Amou

nt

2009 2010 2011 2012 2013 2014 20150

1020304050607080

16.3844253964529 13.218678080

0123

19.2201055747569

12.0773373084444

72.2126183093344

21.3540594852695

30.5985686590532

Percentage delayed repayment

Year

Perc

etag

e


Case: Bodeli• Name: Savita Ben Raman Bhai Rathva • Village: Watada• No of loans: 6 (Agriculture)• Education: Illiterate

Problems: Water for irrigation. No other source of income. Problem of loan repayment. Major Spending: Seeds. Fertilizers. Water on rent. Processing. Labor.

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Loan Granted: • Loan Pattern was really good.• When she come to know she is facing

problem of loan repayment, she took less loan (2013).

• But she is facing a big problem of water required for irrigation

Spending:• Her main part of loan was spent on three

things Seeds, Fertilizer and Water.• Aged. • Machine usage.

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2009 2010 2011 2012 2013 20140

2000

4000

6000

8000

10000

120009000

8000

10000

12000

7000

12000Loan Amount

Year

Amou

nt

19%

10%

19%12%15%

10%15%

Spending Water

Processing

Seeds

Mazdoori

Fertilizer

Machine usage

Tractor


Bodeli

• Name: Varsha ben Alpesh Bhai Rathwa• Village: Anyadri• No of loans: 3 (Agriculture)• Education: 8th

Problems: In actual it was not found. She is an example for everyone.

Major Spending: Seeds. Fertilizers. Pesticides.

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Analysis: Loan Granted:• Loans were granted less but she

used this loan amount efficiently.• She knows where to spend and

how much. Spending:• Education makes a whole change

in spending. • She has spent loan amount on 8

things. • Which shows she is known to

products available in market and how much they cost.

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2008 2009 20100

500100015002000250030003500400045005000

3000

4000

5000Loan taken

Year

Amou

nt24%

16%8%8%8%

16%

8% 12%

Spending of loan

SeedPesticidesWater on rentMachine on rentLabour chargesFertilizersTractorTransportation charges to market


Nandasan

• Name: Noor Mohammed Ghanchi Rao• Village: Kadi• No of loans: 5 (Business)• Education: 5th

Problems: Child Health condition. Husband’s static Income. 3 Daughters Study and Wedding

Major Spending: Stitching. Sari. Katlari, Cosmetic.

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“Lady with Luck”


Analysis: Loan Granted:• Her loans were increased

gradually. This shows her credit worthiness is good.

Spending:• Most of her spending were on

buying material, which further she sell and earn.

Income: • Her family income has increased

very much. Has a change of 300%.

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2005 2006 2009 2011 20130

10000200003000040000500006000070000

500015000

30000

50000

70000Loan Amount

Year

Amou

nt

61%24%

15%

Spending of loans 2006 to 2013

Sari BuyingCosmeticsKatlari

Before Joining After Joining

5000

20000

Income (Monthly)


Scope:• Taking a loan and spending that amount is major concern in Informal

sector. • This project will clear the factors on which amount has been spent,

whether the granted loan was sufficient or Sewa need to extend their base for loans.

• This project will also clear the base of loan granting so it will improve their loan repayment cycle and the future of new saving schemes.

• Village wise analysis on which mode of repayment will be suitable for them.

• Relation of education to spending of loan amount.• Suitable base for loan grant, so that repayment problem will be solved to

some extent.• Last but not least case studies on life of Individual.

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FINDINGS/OBSERVATIONS

• Starting with loan form which they have, is not sufficient to have full information from the proposer.

• Most of the loan forms are incomplete.• There is no base for the how much loan should be granted to an individual

woman. • All the work done is manual, means till now there is no IT base in Bodeli.• Meetings were conducted on every Saturday to plan next week plan. That

is good initiative. • One of the biggest problem is Water required for irrigation. • Due to easy process, no much documents required and difference in

interest rate. Member prefer to take loan for Agriculture purpose.

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Few More:

• Bens are hiding the actual fact.• Due to the SEWA bank their loan recovery problem is very less

and they proper investigation before and after providing loan.• Education level is good in Nandasan and through they know

how to spent and where to spent. • Due to industries also, Nandasan is not facing a problem of

loan repayment and this is the other sources of earning.• Documents are filled properly.• In Anand only Education level is very low among leaders of

Bachat Mandal• Information only given to leaders not only all group members.

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RECOMMENDATION

• Changes in Loan Form.• Set another base for loan. Based on Income and Land Possessed • Ask for spending bills. • Diversification in loan Portfolio.• Where earning level is good prompt them for new saving schemes.• Design repayment installments on the basis of earning level of villages.

(Watada, Bhatiyapur)• Provide information directly to members not only to leaders.• Explore more subsidies available from govt.• Analysis of villages need to be done for spending and repayment.• Excessive issuance of loan amount creates problem in loan repayment and

spending.

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LIMITATIONS

• The focus group and interviews were affected by my lack of knowledge of Gujarati as members were not able to speak Hindi.

• Even though we had one SEWA member all the time she used to translate Gujarati in to Hindi. In that translation we might have missed some things.

• Many people used to feel shy about talking about their income and savings or how much loan they have taken.

• Fear in women that “who are we?”. Members used to say we are from Delhi for recovery.

• Many people hide the things.• Due to marriage season unavailability of women In villages.• We have not presented any data on nandasan because of unavailability.• Small sample size to explore specific results.

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TAMARO ABHAR CHE.

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Loan Journey (1)

Documents

Transcript of Loan Journey (1)