Sa-Dhan

STRENGTHENING THE PROVISIONOF

MICROFINANCE SERVICES

BOARD MEMBERS

Mrs. Ela R Bhatt (Chairperson) Mr. M Udaia KumarFounder Managing DirectorSEWA Bank SHARE

Mr. Vijay Mahajan (Co-Chairperson) Ms. Mahfuza RahmanManaging Director Executive DirectorBASIX Rashtriya Gramin Vikas Nidhi (RGVN)

Mr. Aloysius Fernandez Mr. Sanjay Sinha (Treasurer)Chief Executive Officer Executive DirectorMYRADA EDA Rural Systems Pvt Ltd

Ms. Vijayalakshmi Das Mr. VN BhattExecutive Director Chief AdvisorFriends of Women’s World Banking, India SANGHAMITRA Rural Financial Services(FWWB)

Mr. D Narendra NathProgramme DirectorPRADAN

HEADS OF THE SUB-GROUPS

Policy Sub-Group Mr. Aloysius Fernandez (MYRADA)Capacity Building Sub-Group Dr. Sankar Datta (IGS)Standards Sub-Group Mr. Udaia Kumar (SHARE)

CONTENTS

Chairperson’s Statement i

Contents :

1. Objectives and Strategy 1

2. Policy Interventions 6

3. Setting Standards 14

4. Capacity Building 22

5. Programme Assessment, and Future directions 29

Appendix :

1. Auditor’s Report and Financial Statements for the year 2001-2002 34

2. Sa-Dhan Members 37

I would like to begin this note by referring back to 1998, which has led to theestablishment of Sa-Dhan, the association of microfinance institutions founded

by SEWA Bank, BASIX, Dhan Foundation, FWWB, MYRADA, RGVN, SHAREand PRADAN. The need for having a specialised network of CommunityDevelopment Finance Institutions (CDFIs) was felt for the purpose of developingand establishing an association that would take forward the collective requirementsof the sector. This would include, articulating and dialoguing with policy makers,drawing attention to the large and unfinished work of capacity building andidentification and development of minimum standards of performance in aparticipatory manner. Such action would enable us to begin to address the biggestchallenge of creating a large number of sustainable livelihood opportunities in aprofessional way.

As we enter this new millennium, the task for the nation is to ensure the steadycreation of 13–15 million new livelihoods every year. This is because of the fact thatdespite India’s having the largest program for poverty alleviation (IRDP etc.); itsresults have been limited. The role of the regional rural bank, NARBARD and otherinstitutions providing financial services too is restricted to particular areas andsegments of the population. Hence, addressing the challenge inevitably requires theco-operation of Non-Governmental Organisation and Microfinance Institutions(NGO-MFIs). NGOs and MFIs have demonstrated how the poor can define thenature of service they receive and utilise that resource in actively choosing betweeneconomic opportunities. While these interventions are growing they are relativelysmall, given the size of the problem. This can only change with increased collaborationbetween the government and NGO/MFIs.

Therefore, what we need is, to gain acceptance and support from the concerngovernment authorities by improving the quality of our services and increasingdialogue. For this, we the practitioners need to present our ability and potentialjointly across MFIs for a better response. This requires sharing, understanding andlearning of different perspective, competencies and experiences, apart from thequestion of resources and legitimacy. This is what has led to the design anddevelopment of Sa-Dhan and its programs.

CHAIRPERSON'S STATEMENT

Sa-Dhan i

Sa-Dhan i i

The multiplicity and complexity of issues in the industry have made the founders ofthe association to focus mainly on standards, policy, and capacity building throughresearch. The present annual report contains the work done by each of the sub-groups and its future plans. I am encouraged by the work of each sub-group duringthe year. The work they have done for building this infant industry in the countryhave been acknowledged and appreciated by the government, donors and financialinstitution. However, we still need to continue and strengthen this work to achievethe goals and objectives of Sa-Dhan. Micro finance service should reach each andevery corner of the country thereby improving the quality of life among the poorand weaker section of the society through savings, credit, mobilisation and creationof community based institution and build their capacity for managing andundertaking micro-enterprises.

I would like to express my grateful thanks on record to Sa-Dhan members for theirco-operation in various ways. I also thank all the Board members, and the three sub-groups for their incessant and unceasing efforts in building the sector. I sincerelyhope that through micro finance we can generate millions of livelihood andemployment opportunities to women and unemployed youths. Let us all make aneffort to contribute to the growth of this nascent industry in whatever small way wecan.

Finally, I would also like to appreciate the work done by Sa-Dhan Secretariat under theleadership of Mr. Mathew Titus for developing and delivering programmes and itscommitment in pushing the agenda of the sector forward. We would also like toacknowledge the support provided to us by the Ford Foundation, the Canadian Co-operative Association, the Swiss Development Corporation, ICICI Bank and the SFMCdivision of SIDBI.

Ela R. BhattChairperson

1.1 MISSION STATEMENT

The mission of Sa-Dhan is to build the field of community development financein India, to help its members and associate institutions to better serve low

income households, particularly women, in both rural and urban India, in theirquest for establishing stable livelihoods and improving their quality of life.

1.2 GENESIS OF COMMUNITY BASED BANKING

Since independence, the numerous government programs and schemes introducedto eradicate poverty made little difference to the well being of the poor who were thesilent recipients. Indepth studies highlighted the limitations of the developmentprograms and emphasised that for the long-term and sustained impact of thedevelopment interventions, the poor and low-income households ought to be activepartners right from the conceptualisation of these programs. More importantly, theseinterventions should aim at building the local economy by providing the desiredinputs in the micro enterprises of these households.

In recent years, a variety of financial institutions have emerged in a promising mannerto meet the needs of the poor communities across the country. The large demand,characterised by the differences between low-income households, the nature of localeconomies, and geographical diversities has led to the emergence of multiplecommunity based banking models each independent and subscribing to differentstrategies. In order to set a direction for the fast emerging sector, it was necessary toconsolidate the efforts of the sector. By supporting collective learning and workingtogether, not only would the diverse models be strengthened but also improve thecollective bargaining power of the sector for demanding a facilitating environmentfor provision of its services.

1.3 EVOLUTION OF SA-DHAN

Sa-Dhan as an association brings together diverse views, models and concerns in themicrofinance sector in India. Sa-Dhan’s evolution was the result of the stated needfor a common platform for microfinance in India by the key practitioners in themicrofinance sector who recognised that despite their diversity they had to increase

OBJECTIVES AND STRATEGY

CHAPTER 1

Sa-Dhan 1

the outreach of existing programs, launch new initiatives or negotiate with policymakers for a favourable environment.

The increasing recognition of the common constraints and challenges by microfinancepractitioners led to the need for strategic thinking on the subject of expanding theprovision of microfinance services within the country. At the preparatory policyworkshop organised by WWB - New York, consensus quickly emerged on the strategyto expand microfinance service provision as articulated by the draft “Dhakka”1 paperwhich strongly argued for the need to adopt a three-track approach in working onincreasing the provision of such services. Following this agreement, it became necessaryto define the contours for the association. On 14th September 1998, the leadingmicrofinance stakeholders, got together to establish the body, and agreed on Mr.Mathew Titus to lead and establish the association. Sa-Dhan was incorporated onJuly 21st, 1999.

1.3.1 SA-DHAN’S VISION

The vision that triggered Sa-Dhan’s establishment was that the sustainabledevelopment of microfinance required:

Ø A common platform representing multiple models and approaches to microfinanceand yet having an independent viewpoint to facilitate dialogue and synergy betweendifferent ideologies.

Ø It was necessary to address issues concomitantly- policy advocacy, standards andtraining by establishing groups addressing each issue. While each group neededthe other, it was also important to reflect the issues confronting different practitionerson their different growth paths.

Ø Accessibility to necessary technical and marketing support systems will lead tosustainable livelihoods and improved quality of life through communitydevelopment finance.

Ø Timely and reliable information and knowledge dissemination is critical for effectivenetworking of microfinance institutions across India.

1.3.2 OBJECTIVES

Based upon its mission, Sa-Dhan is working towards the following objectives:

1. To build a strong financial system in the form of community based development

Sa-Dhan 2

finance institutions (CDFIs), with the help of NGOs and others.

2. To encourage new and existing microfinance institutions to enlarge and expandtheir service.

3. To create opportunities for existing and new MFIs and FIs to enter micro financeby establishing a supportive policy and regulatory environment.

To provide operational efficiency and an in-depth focus to its work, Sa-Dhan isworking with three sub-groups based upon the three thematic areas that are of crucialconcern to the sector:

Policy interventions: to establish an enabling environment that recognizes thepresence, role and needs of the institutions involved in community developmentfinance.

Setting standards: to facilitate the adoption of practices that ensures good governance,management, reporting and transparency within the sector.

Capacity building: to build sectoral capacity in microfinance by facilitating widerexposure to the national and international best practices of microfinance.

1.3.3 STRUCTURE AND MEMBERSHIP OF SA-DHAN

Sa-Dhan’s members are from four categories of organisations:

1. Capacity Building Organisation: Community based organisations such asPRADAN that promote self-help groups and technical service providers,provide capacity building inputs.

2. Organisations not structured as financial intermediaries, but show creditportfolio on their balance sheet such as FWWB and RGVN.

3. Organisations structured as financial institutions such as HDFC and SEWABank.

4. Formal or informal networks/channels for both support and capacity buildingsuch as AIAMED.

Currently Sa-Dhan’s has 52 member organsiations, of which 21 are primary membersand 31 associate members. Though the members offer multiple services they fall into thebroad categories as given in Table 1.

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The microfinance sector in India is in an evolving phase and witnessing an increasingentry of new players. Most of these institutions have inadequate organizational capacityto provide financial services on a sustainable basis. Further, the operations and growth ofMFIs to reach out to a larger community are also hindered by lack of a facilitative policyand regulatory environment. While the sector is growing at a tremendous pace, the presenttotal outreach of alternative finance institutions is only a fraction of the poor in India.Hence, Sa-Dhan as the designate association of MFIs represents not a developedsector but a nascent industry.

Given the nascent nature of the sector, Sa-Dhan has a crucial role to play in increasingcapacities, affecting the transfer and adoption of important financial technologies,increasing the number of service providers and contributing to improving the policyand operational context for microfinance in India.

1.3.4 ACTIVITIES AND PROGRAM CYCLE OF SA-DHAN

In order to review and plan different initiatives, the sub-groups of Sa-Dhan meet ona regular basis (every three to four months) to take stock and organise programmes.Each of the Sa-Dhan sub-groups meets to deliberate on different activities pertainingto their thematic area. These meetings plan events, review, and strategise. The strategiesand activities formulated by each of the sub-groups are implemented by the Sa-Dhan secretariat in collaboration with the members. Once the program and learningcycle (see Figure 1 below) is complete, members of the sub-group meet with othermembers to evaluate the achievements and limitations of the program.

The activities that Sa-Dhan undertakes are a direct result of the program cycle followedby Sa-Dhan. The program cycle also continuously contributes in identifying a newstrategic route for building the sector.

Table 1: Categories of member organisations

Number of organisations – Category wise(* Almost all members are engaged with one more activities)

15 09 06 03 NGO - 19

NBFC -04

Bank -02

CapacityBuilding Org.

TechnicalSupportProvider

Bulk Lender Network MFI

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1.Dhakka Starting Microfinance in India, Vijay Mahajan, Bharti Gupta Ramola and Mathew Titus. Dhakka in Hindi means“a massive push”.

Figure 1 1: Sa-Dhan Program and Learning Cycle

EVALUATION:Examine event,limitation andevolve sectoral

agenda

FacilitationMeeting: To

develop programcontent and

structure

Sub-GroupMeetings:

Develop ProgramDesign

Sa-Dhan Event:Operated by Sa-Dhan

member incollaboration with

others

1.3.5 NETWORK: THE CHALLENGE

The challenge before Sa-Dhan in building an association is immense, involving thetask of bringing together a diverse set of large organisations while recognising therationale of their strategies, at the same time maintaining the association’s neutrality.Sa-Dhan provides for a purposeful participation and dialogue between the differentstakeholders where it is possible for the expression their concerns, points of viewand experience which go into the development of the response and position of theassociation. The sheer size and regional diversity, requires programmes designedaccording to the historicity and skills of the programmes. Detailed planning andpreparation is required of Sa-Dhan in order to assist organisations to achievesignificant expansion either quantitatively or qualitatively, in the provision of theirservices.

Sa-Dhan in order to benefit from the work being done across the world is interested inopening lines of dialogue, exchange and participation with the international networksand practitioners. The dissemination of international practices and debates isconsidered to sensitise the Indian policy makers in framing sector friendly policies.

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POLICY INTERVENTIONS

CHAPTER 2

2.1 STRATEGY, PLANS AND ACHIEVEMENTS OF THE POLICYSUB-GROUP

The policy sub-group seeks to sensitise and inform policy makers, regulators andother departments about the position and status of CDFIs and enables them to

formulate policies that will strengthen the provision of the CDFI’s services to low incomehouseholds. The policy sub-group strengthens Sa-Dhan’s efforts through collectiveadvocacy for policy reforms.

2.2 POLICY STRATEGY PAPER 2001

The focus areas of the Sa-Dhan strategy paper developed in 2001are:

A. Establishing a committee to institutionalise dialogue

The report of the National Task Force on Microfinance, which was submitted to the RBIin 2000, made a number of recommendations. Some important issues are yet to beaddressed for which purpose the setting up of a Committee was proposed whose objectiveis to function as a bridge between policy makers and institutions, which are contributingto the development of the microfinance sector. The initiatives of the committee wouldlay the road for the orderly and systematic growth of the sector based on learning fromand dialogues among the stakeholders–government, banks and MFIs. The secretariatwould be managed and overseen by Sa-Dhan. The Committee would be expected to:

i) Help build an understanding of and insight into the ongoing requirementsand distinct features of agencies providing microfinance.

ii) Use research and knowledge from both local and global experience fordeveloping a clear framework to guide both practitioners and policy makersas they seek to expand the provision of their services.

iii) Review and suggest measures for the development of a regulatory environmentfor microfinance.

iv) Function as a one-window support and reference point for both MFIs andministries as they seek to resolve differences and seek clarifications on differentsubjects (such as FCRA, CBDT, ECB, and FIPB).

v) Hold and participate in seminars, workshops, and educational tours both in

Sa-Dhan 6

India and abroad to educate and inform policy makers on the importantissues confronting microfinance.

B. Working with different government departments

The sub-group would increase its engagement with departments such as Rural Planningand Credit Department, Reserve Bank of India; Company Law Board; Ministry ofFinance; Ministry of SSI & ARI; Ministry of Agriculture and the mainstream Co-operativeRegulators. A ‘working network’ would be formed to undertake research that wouldfacilitate this dialogue with policy makers.

C. Build further dialogue on refining and improving theregulatory context

A separate sub-group to oversee the evolution and reporting of performance datawould be set up at Sa-Dhan. Sa-Dhan would continue the task of building upon thedatabase and follow up on the earlier dissemination of the research undertaken by it.

D. Increasing the flow of resources to facilitate operationalgrowth

The sub-group would focus upon facilitating the ease of entry and operations in thesector. Efforts towards this would include dialogue with development banks aboutchallenges for greater support of NGOs/MFIs as they seek to expand their provisionof financial services.

E. Increase and improve collaboration between NGO/MFIcommunity and banks

The most dominant model of this has been the SHG- Bank linkage program. The sub-group will focus on educating and informing policy makers on this issue and would drawupon support from the capacity building sub-group for the wider dissemination of theseissues within the banking community. The sub-group would also examine issues thatcan facilitate greater collaboration between the banking division and NGO/MFIs for theprovision of a full range of financial services to the poor.

F. Facilitate and support regional groups

Given the size and diversity of India, a uniform plan or strategy for all the states isdifficult. In order to ground the different initiatives of Sa-Dhan in each of the states, theassociation is proposing to establish Policy Regional Round Tables which would focus onencouraging regional policy dialogue; development of a regional strategy; and facilitationof new forms of collaboration between the regional members and policy makers in thestate

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2.3 ACTIVITIES AND PROGRAM ACHIEVEMENTS

2.3.1 INITIATION FOR THE FORMATION OF AN EMPOWEREDCOMMITTEE ON MICROFINANCE

An important development in the last year has been the initiation of this forum forpolicy dialogue. The engagement with policy makers and regulators has beenstrengthened through this initiative. The committee has been set up with seven sub-groups and is headed by the Banking Secretary (AS) to the Government of India.The seven sub-groups are:

1. Validated Models for the Delivery of Financial Resources

2. Capacity Building Requirements for Stakeholders

3. Resource flow required for expanding the provision of financial services

4. Legal and Regulatory Requirements

5. Business Development Services for micro-enterprises

6. Technology Applications to improve services

7. Gender issues arising from the expansion of such services

Sa-Dhan has been assigned the critical task of identifying and suggesting legal andregulatory framework for taking forward the microfinance sector.

2.3.2 MEETINGS

Meetings were held of the sub-group and with other stakeholders in the sector. Thepolicy sub-group met twice during the year under reporting.

2.3.2.1 First sub-group meeting

A brief overview of the important issues discussed at the first sub-group meeting is givenbelow:

Sensitization and awareness building programs for policy makers —

In the context of frequent changes in government departments, and to ensure a crossdepartment perspective on microfinance issues, it has been decided to extend efforts toinclude a larger group of middle and senior level policy makers. It is imperative to give ademonstrative explanation of microfinance processes to policy makers through morefield visits.

Awareness building for rating agencies —

Corporate rating agencies bring with them commensurate experience that can be of greatadvantage for the sector especially in helping MFIs to gain greater credibility withmainstream financial institutions. However the microfinance sector is an evolving sectorspecialized by a great diversity of models and approaches and striving for efficiency andsustainability. Many complexities are arising from the dual goals of alleviating poverty

Sa-Dhan 8

and developing a financially rigorous and sustainable program. In this context, there is aneed to start thinking in terms of perspective building of rating agencies such as CRISILso that they are able to refine their rating methods for the sector given its peculiarities andspecialized service requirements.

Legal and Regulatory Challenges—

The microfinance sector is greatly hindered by the absence of a facilitative regulatoryregime. While the current law provides for various legal statutes for MFIs there is a lackof a basic legal entity for NGOs seeking to provide savings, insurance, and other financialservices. The general opinion is that the present situation can be improved by makingthe current laws more appropriate for the MFI sector. Over a longer period, a morefacilitating legal form would be appropriate and desirable on the lines of the Task Forcereport.

2.3.2.2 Second sub-group meeting

The second meeting organized as a ”Policy Prioritisation Workshop”, on January 18,2002 was held at UTC, Bangalore. The objective was to undertake a combined assessmentof policy priorities to deal with the functional constraints of the operating models and forstrengthening their future performance. This exercise also took forward the Sa-Dhanagenda to broaden ownership among its member institutions of the initiatives on thepolicy front. A participatory exercise helped to identify the primary concerns amongstthe members, which then formed the basis for the workshop discussions. The followingissues emerged from the participatory exercise:

Legal framework for MFIs—

In a strict legal sense, microfinance services are not within the scope of the activitiespermitted under legal forms such as Societies and Trusts. Whereas the microfinancesector is dominated by the organizations registered as societies or trusts formed underthese legal forms. Even government bodies such as the RBI, NABARD and the Ministryof Human Resource Development acknowledge and encourage these forms as effectivevehicles for providing micro credit services to poor and marginalised households. Towardsthis end, the sub-group supports changes in the existing law to make it more appropriatefor the sector in the short run. These efforts need to be supplemented with a new basiclegal framework that will encourage savings, credit, insurance and other products requiredby the clients of the microfinance sector.

Savings/Insurance products—

The discussion stressed that practitioners should be informed about the insurance schemes,negotiate for high value insurance plans and document their experiences for Sa-Dhan.The practitioners urged Sa-Dhan to investigate and compile a list of insurance schemesfor its members.

Sa-Dhan 9

Many insurance companies are reaching out to MFIs to meet their IRDA obligation of atleast 15% coverage of the total from poor communities. But at best these schemes arelimited in their scope in meeting the needs of the poor.

GOI policies for the MFI sector: Taxation and other Legal matters—

The recommendations of the Parthasarthy Shome Committee Report might result insome changes in the income tax law that would take away tax exemptions from NGOs.VANI, CAF and others are already working to inform the concerned governmentdepartments on the negative implications of such an action on the development work.Sa-Dhan should support the effort of these agencies.

Income tax authorities have been largely silent on the issue of levying tax on NGOsproviding microfinance services as long as it is being carried out with grant support.However, if the NGO wants to do this on a sustainable basis then it goes against thecharitable status of the organization. Hence there is a need to make a distinction betweena not-for-profit organization and a charitable organization, as the former does not bar anorganization from generating a surplus from operations.

The MACS Act was an attempt to provide legal recognition for member-owned, membermanaged and member-controlled organizations in Andhra Pradesh. It is important toinitiate and support efforts for widening the introduction of similar MAC Acts acrossdifferent states in the country.

The ambiguity of FCRA guidelines over reporting has been sorted out to some extent bythe new form for reporting on foreign grants notified by the Ministry of Home affairs.This format is available on its website beginning April 2002.

Suggestions for taking forward policy work—

There is a strong need for facilitating a greater information flow between the variousplayers in the sector and this need would be met to a great extent by a proposed Sa-Dhanwebsite for informing and educating its members and other stakeholders on issuesimpacting the MF sector.

A working group was also formed to coordinate with VANI, CAF and others that arealready working on the issues emerging from the Parthasarthy Shome Committee Report.

2.3.2.3 Presentation to the Board of ICICI Bank Ltd.

In order to facilitate appropriate and increased financial resources for MFIs, Policy Sub-Group’s members met the Board of ICICI Bank. The emphasis was to share the frameworkof Sa-Dhan initiatives towards building a working relationship between mainstreambankers and MFIs to ensure sufficient commercial funds for MFIs. The group also sharedwith the ICICI Board the three-track strategy to reorient banks towards supporting newMFIs and encourage community based FIs.

Sa-Dhan 10

2.3.2.4 Micro-Infrastructure Workshop

A workshop was held in Delhi by IDFC to identify important infrastructure requirementsof the poor. The workshop brought together important financial institutions, policymakers, and practitioners to examine the potential of developing sustainable infrastructuresolutions. It was agreed and recognised that the poor need common productioninfrastructure, power, communication, and water etc. However, there was little agreementon the specific interventions required to address the identified problems. Though theparticipants agreed upon the need to work with and involve agencies working with thepoor, there was little focus on new financial products, which would take this exerciseforward. There was consensus on the need to involve agencies (primarily NGOs) thatwork with poor communities, which for Sa-Dhan is a challenge to attempt and developa systematic documentation on the subject for future initiatives.

2.3.2.5 Initiating dialogue with the Parliament StandingCommittee on Finance

Over the last two years Sa-Dhan has constantly engaged with central bankers, othergovernment departments and policy makers on operational and policy issues affectingthe growth of microfinance services. The work of Sa-Dhan on the policy agenda has nowgrown to a mature stage where policy makers and Central Bankers have started seeing Sa-Dhan as a bridge requiring Sa-Dhan to engage with the primary decision making bodiesof the Government of India.

In that direction, Sa-Dhan initiated an interaction with the office of the Chairman of theParliament Standing Committee of Finance whose response was very positive, and sharedmaterial on microfinance sector in India in person. More work is required in sensitisinglawmakers to the challenges of micro-finance.

2.3.2.6 Sa-Dhan Annual Conference August 11, 2001

Sa-Dhan organised a policy forum‘Moving Development FinanceCentre Stage - Dialogue withPolicy Makers’ at New Delhi tofacilitate a dialogue betweenpractitioners of microfinance andpolicy makers. It was chaired bythe member of the ParliamentConsultative Committee onFinance, Mr. Rajiv Pratap Rudy(now State minister of Commercein the Central Government).

The conference was held with theobjective of taking forward the

Mr. Rajiv Pratap Rudy Speakingat Sa-Dhan’s Annual Conference

Sa-Dhan 11

dialogue with policy makers, bankers and other stakeholders, on the issues confrontingthe microfinance sector in India. In addition to the Chief guest Shri Rajiv Pratap Rudy,Member of Parliament, several other representatives from Ministry of Finance, Ministryof SSI & ARI, RBI, SIDBI, SBI, Oriental Bank of Commerce, HUDCO, ICICI,CAPART, international donor agencies like the Ford Foundation, Swiss DevelopmentCorporation, DFID, Actionaid, academicians, microfinance practitioners includingbeneficiaries, and media persons also attended the conference. The broad issues discussedwere:

Promoting stable livelihoods for low income communities

Mr. Shankar Agarwal, Joint Secretary, Ministry of SSI and ARI was of the opinion thatthe microfinance sector has a great potential to generate additional employmentopportunities. The Ministry has allocated a fund of about Rs. 2,500 crores for micro-enterprise development He reiterated that his ministry appreciates and recognizes theunderstanding and knowledge of the microfinance sector about the needs and strengthsof the micro enterprises. His ministry would like to work closely with the sector and willbe open to develop an appropriate scheme.

Reinforcing the criticality of microfinance in generating additional livelihoods, Dr.Abusaleh Shariff, Chief Economist, NCAER, presented an analysis of how the share ofthe primary sector (agriculture) in the national income has been declining along-with adecline in the participation of the labour force in the sector. He made a strong case forrural non-farm livelihood activities and micro credit as an effective instrument to takethe non-farm sector forward.

Self-regulation

Support for self-regulation of the microfinance sector was expressed from various quarters.According to Ms. Jayshree Vyas, Managing Director, SEWA Bank, “it is not only theregulators that are concerned about regulating the sector but the sector itself is makingefforts to regulate itself”. Mr. Brij Mohan, Executive Director, SIDBI expressed supportfor the need for the Microfinance Act and for the idea of self-regulation of the sector.Expressing similar support, Ms. Deepali Pant Joshi, General Manager, RBI (Rural Planningand Credit Department) said, “there should be a self regulatory organization to regulatethe MFIs to enable them to serve poor people in rural areas”. She was of the view thatregulatory reforms would enable the NGOs to attain credibility and higher performancestandards.

Mr. Mathew Titus, Executive Director, Sa-Dhan, said that the benefits of liberalizationare yet to reach the poor. The investments in the capacity building of NGOs assumesgreat importance today as many of them are transformed into MFIs which requiresprofessional management skills to sustain and serve the poor efficiently.

2.3.2.7 Continuing Dialogue with Stakeholders

Collaborations and support initiatives

Ø Engagement with the Asian Development Bank was initiated and Sa-Dhan wouldcontinue these efforts towards policy facilitation.

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Ø The Government of India further facilitated a meeting with the Nigerian Ministerfor Industry wherein the Minister expressed the need to support Nigeria on micro-credit policy development.

Ø Sa-Dhan proposes tocontinue playing asupportive role in takinggovernment initiatives,specially capacity buildingof NGO’s forward by: (i)disseminating informationabout it through itsnewsletters; and (ii) assistingNGOs that want to takesupport under this scheme.

Ø The sub-group engagedwith NABARD on the issue of the Micro-Finance Development Fund (MFDF)housed in NABARD for capacity building of the institutions involved inmicrofinance. In response to a letter from Mrs. Ela R. Bhatt, Chairperson of Sa-Dhan, NABARD shared that the broad areas for support from the MFDF includingstart- up capital for MFIs, training for MFIs, SHGs and others, development ofsuitable regulatory and supervisory systems, dissemination of microfinance relatedinformation, etc. The sub-group also raised the issue that NABARD should not seemicrofinance as only SHG. The effort should be to explore and promote otherform of microfinance also. In response to this, NABARD shared that their guidelinesare changed recently and they are open to look at Grameen replicates also in theirambit of finance.

Ø Sa-Dhan met with RBI’s Department of Non-Banking Services (DNBS) and RuralPlanning and Credit to acquaint them with the work that is being done on self-regulation and other issues. At a meeting, RPCD shared that it is open to workwith Sa-Dhan in identifying the steps to be taken to advance the microfinancesector. In addition the meeting deliberated on the suggestions emerging out of theconsultative workshops of Sa-Dhan.

Other policy related issues

The Sabanayagam Committee appointed by the Department of Companies Affairs,Ministry of Law has recommended some changes in Section 620 A of the CompaniesAct that deals with Nidhi or Mutual Benefit Society. The Committee Report in itspresent form does not hold any promise to the microfinance sector. The sub-groupheld a discussion with the relevant policy making departments to identify thesupportive changes for the sector.

Visit to SHGs by Banking Secretary, MoF

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SETTING STANDARDS4

CHAPTER 3

Since the microfinance sector in India is in early stage, it is imperative to havebasic minimum standards in place for its orderly growth. The objective of Sa-

Dhan’s Standard Sub-group is to facilitate the adoption of practices that ensure goodgovernance, management, reporting and transparency within the sector.

3.1 PLANS, STRATEGY AND ACTIVITIES

Plurality is the inherent feature of this sector, be it operating model, legal character,clientele features, geographical diversity etc. Sa-Dhan Standards Sub-Group hasrecognised the multiplicity of concerns in the process of building a national perspectiveon standards, by engaging with a wide spectrum of stakeholders— lenders, donors,regulators, auditors, practitioners, and other networks.

3.2 STANDARDS STRATEGY PAPER 2001

Sa-Dhan has initiated the process for development and establishment of standards tosafeguard the interests of all stakeholders through collaborative efforts. Since most ofthese organizations are first generation MFIs, the main thrust of the sub-group activitieshas been on (i) identification of appropriate standards through “participatory diagnosticprocess” to build shared ownership of standards for its wider acceptance, (ii) sensitise theemerging MFIs about the concept, meaning and importance of standards, and finally(iii) helping them in adopting the standards. The Standards sub-group had identified thefollowing key areas for intervention in the coming years:

A. Developing Standards in Community Development Finance

A core group of key member practitioners was formed— (i) to look into operationalpractices and performances of different MFIs in India and abroad, (ii) to look into thestandards developed and followed in different countries, and (iii) drafting minimumstandards to be followed by Indian MFIs. The minimum standards would be furtherfine-tuned through field-testing and consultative process. One of the outputs of field-testing is a set of best practices, which would be recommended for Indian MFIs.

B. Evolving self-administering tools based on the proposedstandards

It is envisaged that the standards developed would be in the form of self-administeredtools. The tools would be applied for:

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a. Assessing the progress of the organisation’s plans and operation,b. Identifying the organization’s limitations in different areas of work, andc. Facilitating organisation’s internal changes leading to improved standards.

C. Dissemination of standards and facilitating its adoption

Sa-Dhan will address the issue of educating practitioners about standards through capac-ity building workshops. To facilitate the process of adoption of standards Sa-Dhan pro-posed to:

1. Work closely with MFIs to develop an operational manual that takes intoaccount the regional variations.

2. Enhance accounting competencies of MFIs by facilitating critical review ofsectoral accounting procedures and developing common chart of accounts bybringing together accounting professionals,

3. Build local learning loops for the sharing of information and experiences es-pecially at the regional level while keeping global practices in view.

D. Building database on performance and other indicatorsof MFIs in India

Sa-Dhan will collect both primary and secondary data to determine the range of perfor-mance standards followed by MFIs in different regions and with different scales of opera-tion. Sa-Dhan will also work towards streamlining the process of collection of data througha wide array of technology solutions.

E. Dialogue with Regulators, Donors and FinancialInstitutions

The dialogue with the regulators, donors and apex financial institutions on the issue ofstandards has been successful. Sa-Dhan will continue the dialogue to press the institu-tions to maintain standards and allocate funds to support the MFIs in developing theirskills in adopting standards. Sa-Dhan will also facilitate the emergence of rating agenciesspecifically designed for MFIs in community development work.

3.3 ACTIVITIES AND PROGRAM ACHIEVEMENTS FOR THE SUB-GROUP

The last year has been marked with important breakthroughs and innovativeinitiatives. An important landmark was that the sub-group drafted a set of minimumstandards for MFIs based upon previous deliberations, which would form the basisfor further discussions. Another milestone was that a separate committee was formedwithin the Standards sub-group to deal with the issue of standards related to SHGs.

Sa-Dhan 15

Sa-Dhan professionals havebeen undertaking field visits toobtain feedback on thesuggested standards, which hasfed into the process of finalizingthe standards. The field visitsalso helped in obtaining dataand information on recordkeeping systems and accountingpolicies adopted by differentMFIs, which will be used fordeveloping the operationalmanual for adoption ofstandards.

  

3.3.1 STANDARDS SUB-GROUP MEETINGS

The sub-group held three meetings during the period under reporting. A brief overviewof the important issues discussed is given:

A. Developing benchmarks and setting standards:

In the process of developing standards, Sa-Dhan needs to synthesize the efforts of practi-tioners, lenders/donors, regulators, auditors, rating agencies etc. to identify the commonelements and then bring together on diverse opinions by maintaining transparency andneutrality. The focus of developing standards should be to promote standards as self-administering tools.

Though standards should be neutral in terms of age, scale and region, prior to whichit is important to create a level playing field for the organisations. Thus, relevantbenchmarks also need to be set for organisations in different situations and at differentlevels of growth.

Study of financial ratios of MFIs at different maturity levels in different regions could beundertaken for this purpose. For this, MFIs could be classified by region and maturitylevel. This will help organisations to compare themselves with their peers.

B. Development of a financial and operational manual for MFIs:

In addition to building consensus on standards, Sa-Dhan will also give emphasis to buildingfinancial and operational systems, especially for small and medium MFIs that can becustomised to individual requirements and conforming with the best practices in thefield.

Participants of Standard Workshop,Chennai, 2001

Sa-Dhan 16

For this purpose Sa-Dhan would undertake collaborative development of a financial andoperational systems manual with and for small and medium organisations. Theoperational manual would define the terms and components of the indicators andprovides guidelines for usage. The manuals would also contain case studies of differentsituations that could arise in the process of adoption of standards by an MFI and suggestionsfor possible ways of dealing with specific situations.

C. Suggested strategy for the development and dissemination ofstandards:

In line with Sa-Dhan’sparticipatory approach forevolving a commonunderstanding and consensuson standards, it is essential toinvolve a wider group ofstakeholders in the process ofdefining and disseminatingstandards. This would bringclarity, transparency, andownership to the process.

Efforts towards buildingstandards should be supplemented by the enforcement process. To begin with, thesector should strive to achieve minimum standards irrespective of the age, modeland scale of operations of the MFI.

A twin track approach needs to be adopted where a minimum set of standards wouldbe developed for the entire sector. In addition, a comprehensive set of standards couldbe developed for MFIs that have matured within predetermined parameters.

Given the relative newness of the standards concept, MFIs should be given a reasonabletime frame to adopt standards as an inherent part of their organizational systemsand procedures. At the same time, they should be able to show consistent andsubstantial improvement in performance during the gestation period.

The dichotomy of pure MFI and NGO/MFI should be acknowledged. Thoseorganizations that are looking for rapid expansion in their microfinance programcould strive to separate their microfinance activities from the rest of their activities.

The core members of the sub-group would be steering the task of identifying, definingand rationalizing standards keeping in mind the geographical dispersion, modelvariations, and scale of operations of MFIs. The core team drafted the minimumstandards (taking into account the previous deliberations), for the following:

Group Exercise during Standards Workshopat Chennai

Sa-Dhan 17

§ Financial Standard§ Operational self-sufficiency§ Administrative efficiency

§ Operating cost ratio

§ Current repayment rate

§ Portfolio at risk (60 days)

§ Accounting and Reporting Standard

§ Non-Financial Standard

§ Governance

§ Outreach

§ Client Targeting

D. Database on performance and other indicators of MFIs in India

There is an urgent need to develop a mechanism where sharing information or reportingwill be linked with an incentive. The data on performance of MFIs could be publishedfor reference of donors and other financial institutions. To start with Sa-Dhan has to askits members to provide their audited financial statements on regular basis and then fur-ther ratios and other analysis can be worked out.

E. Building framework for self-regulation of MFIs

The issue of self-regulation of MFIs will be an important intervention by Sa-Dhan,as it will help in increasing acceptability of the sector by the mainstream financialsector, mobilizing deposit for MFIs, and provide comfort level for donors and otherfinancial institutions to deal with regulated institutions.

In response to concerns raised by the RBI, it has been decided to develop self-administra-tion tools to be used by the MFIs to evaluate governance. AIAMED has offered todeliver this service along with Sa-Dhan and this would further build the confidence ofregulators in the transparency of the sector.

F. Standards for SHGs

It is important to begin the process of standard identification and setting for SHGs froman early stage. For this purpose a separate sub-committee had been formed. The sub-committee would be looking into the work done by organisations such as PRADAN,CARE, and APMAS on SHG standards and examine the SHG context across states fora better understanding on issues concerning standards.

FIELD VISIT TO SOUTHERN REGION

As part of rationalisation process of standards, ten MFIs in four states in the southernregion were visited for field-testing of draft standards in order to:

Sa-Dhan 18

Ø understand the bottlenecks in the existing form of record keeping and accountingsystem of MFIs in generating quality information,

Ø get input for developing a robust format of record keeping and accounting system,and

Ø generate primary data that will help in specialized draft standards.

The issues that emerged from the field visit are:

1. Accounting and control system

The control system for microfinance operations in the specialized largely revolvesaround meeting reporting requirements of donors/lenders, rather than formanagement purposes. In some cases donors/lenders had provided specific formatfor periodic reporting. It was observed that many MFIs maintain separate ledgersand records based on source of fund rather than loan product. However, some ofthem expressed their willingness to separate their accounts, but were not able to doit due to lack of skills and resources.

2. Portfolio Tracking

This is the most critical aspect of microfinance operation and unfortunately it was foundto be most neglected area. Hardly anybody had a robust system of doing aging analysis ofloan outstanding. Even those who are tracking it have a rudimentary form and they do itonly on periodic (annual) basis. It is yet to be seen as a key indicator of performance ofMF programme. Keeping in mind that mostly the MIS is in the manual mode, aginganalysis will put additional burden on already overburdened field-staff (it was seen thatnearly 25-40% of staff time goes in maintaining records and sending reports). One possiblesolution could be installation of software at field level, so that staff potential could be atefficiency level. Alternatively, a guiding manual for portfolio tracking is the urgent need of theMF sector.

3. Cost Allocation, Provision for loan losses and Write offs

The practice of cost allocation is minimal, since most of the multi-services MFIs do notmaintain separate financial statement for MF operation. Auditors also do not encouragemaintaining separate book of accounts for MF operation. As they produce financialstatements in line with the conventional practices, they are not able to capture the spe-cific critical aspects of MFI operations such as cost allocation, loan loss provisioning andwrite off. It is necessary to address the need for clarifying doubts and misconceptions onmany accounting terms such as loan loss provisions and write-offs.

Sa-Dhan 19

4. MIS

Irrespective of the legal form and region, most organizations are maintaining manualMIS. In most places, it is in most rudimentary form. In some cases, it is not even able totrack the over-dues, outstanding, demand for collection for the period on regular basis.Although sufficient data is available at all the places to get most of the information butonly one has to do further processing to extract it from the existing records.

All the MFIs are interested in computerizing their MIS. However, it is strongly felt thatthere is need to take up study on the MIS needs of MFIs before looking for any technologysolution for MIS. Organizations with different focus need different set of information andeven priority of information will be different. Simultaneously, it is also need to pressedMFIs to use reports for decision making and not only for reporting to donors/lenders/regulators.

5. Future strategy for data collection

Recognising the importance of good quality data, as it has a direct bearing on the sensi-tivity of certain performance measures, the need arises for engaging specialized skills. Thedata is not readily available with MFIs in the form it is required. Many a times one has towork along with or help MFIs to extract the data from their existing MIS.

Though the Sa-Dhan team had taken long and intensive field trips to undertake thistask, the lean structure of the Standards team of Sa-Dhan restrains its ability. It could notgo to the depth of their financial systems and procedures. It was felt that through special-ized skills (like knowledge of operation, understanding of financial statements, ability tocorrelate different data to detect errors, awareness of sensitivity of ratios in relation tocertain data), this exercise could cover more financial details of MFIs, and expedite theentire exercise.

6. Feedback on Draft Standards

A. MFIs visited:

The broad view of practitioners on draft standards was that it is liberal and requiredfurther tightening-up, keeping in mind the risk profile on the business. Major suggestionswere made regarding with the following issues:

Ø Efficiency level should be at the level to provide enough cushion to offer lowprice products in long run.

Ø Recognising the fact that, as in MF, the loans are usually unsecured, thereshould be greater emphasis on maintaining higher level of asset quality.

Ø There seems to be broad agreement that MFIs should progressively movetowards self-sufficiency by keeping track of subsidies coming in.

Sa-Dhan 20

Ø There seems to be consensus that tracking performance would only be possiblethrough good record keeping system and first step would be a common chartof accounts that enables to make comparison among peers.

Ø Stress was laid on formulating on priority basis, clear-cut guidelines on cost-allocation and several other issues like income recognition and provisioning.

Ø There were also opinions that existing guidelines by accounting body andregulators for other form of financial institutions could be appropriated as perthe features of microfinance sector.

B. Other Stakeholder Responses:

Key apex bodies appear to be more concerned about governance and compliance of lawby MFIs as seen in the context of instances of NBFCs vanishing with money of smalldepositors and the more recent episodes of bankruptcy of several urban co-operativebanks. They were keen on the extension of guidelines for NBFCs to all range of MFIs todiscourage opportunists. Since SHG-Bank linkage model is dominating the microfinancesector, the emphasis was on the self-appraisal tool and good MIS for SHGs rather thanintroducing standards. They were interested in up scaling the SHG-Bank model bymaking the process simpler so that it could reach larger number of organisations. Theyshared their apprehension about bankers using standards against MFIs to deny creditsupport.

3.3.3 STAKEHOLDER MEETINGS

3.3.3.1 Workshop on Micro Credit in Rajasthan April 18–19,2001, Jaipur

Sa-Dhan participated in the workshop on micro-credit in Rajasthan, organised byARAVALI-FWWB at Jaipur. Sa-Dhan facilitated in one session, the process of develop-ing consensus on different aspects of operating standards for SHG. Participants repre-senting 26 different NGOs deliberated on different parameters of SHGs and recom-mended standards for each of the parameters.

3.3.3.2 Performance Standards Workshop December 14–16,2001, Lucknow

Sa-Dhan participated in the performance standards workshop organised by BIRD-SIDBI at Lucknow and made a presentation on “Sa-Dhan Experiences withMicrofinance Standards”. The presentation provided an overview of the needs forhaving standards in the sector and the criticality of the process involved in developingstandards. Summing the present MF scenario in India, the presentation providedsuggestions for moving forward on the standards agenda. The financial performanceand efficiency parameters and the non-financial indicators that have been identifiedthrough the standards work were presented at the workshop.

Sa-Dhan 21

CAPACITY BUILDING

CHAPTER 4

The thrust of the capacity building work is on developing a common perspective andknowledge of microfinance practice amongst practitioners by providing a forum for

sharing knowledge and experiences. This becomes critical in a context where there are anincreasing number of new entrants in the sector with little or no experience in undertakingcommunity development financial programs.

4.1 STRATEGY, PLANS AND ACTIVITIES OF THE SUB-GROUP

Recognising the need for enhancing the perspective of the leadership of MF institutions,the capacity building sub-group has undertaken the Microfinance Education Program(MEP) as the primary activity of its capacity building initiative. It is expected that theMEP would lead to developing a wider perspective on the common principles of MFand in disseminating best practices both from India and abroad.

The sub-group conducts meetings on a regular manner in which the issues related tocapacity building are deliberated. It has assumed a role of strategy formulation, agendasetting, and active guidance on the capacity building work of Sa-Dhan.

4.1.1 Capacity Building strategy paper 2001

A major accomplishment of the year was the preparation of an overall strategy for addressingthe issue of capacity building for the sector. This was documented in the form of astrategy paper that was prepared in consultation with the sub-group members. Responsesfrom practitioners who attended the Sa-Dhan’s MEP too was used to improve upon ourearlier plans.

The following were the important suggestions that guided the work for the year:

(i) Redesign MEP to focus more on perspective building rather than skill building

(ii) Develop regional MEPs for addressing heterogeneity of participation

(iii) Broad basing faculty involvement for example, designing content and developingmaterial

(iv) Creating synergy between standards, policy and capacity building sub-groups’ efforts

(v) Engagement with the wider world of knowledge by involving academicians, researchinstitutions for conceptual inputs

Sa-Dhan 22

4.1.2 ACTIVITIES AND PROGRAM ACHIEVEMENTS FOR THESUB-GROUP

Meetings were held of the sub-group and with other stakeholders in the sector.

4.1.2.1 Sub-group Meetings

The sub-group held twomeetings during the period underreporting. A brief overview of theissues discussed during themeetings is:

A. MicrofinanceEducation Program

The initial two years ofconducting MEP havecontributed significantly inunderstanding the capacitybuilding needs of the sector. This understanding has led to a review to improve upon theoriginal assumptions, thrust, design, and strategies initially adopted for the programme.

B. Regional Microfinance Education program

Given the diversity of microfinance approaches along with the regional variations in thegrowth of microfinance activities, it is felt that regional level programs are imperative toaddress the multiple region-based issues set in local contexts. The maturity of themicrofinance sector and the regulatory framework are major concerns that require regionalperspective. For example, the state of microfinance sector and its maturity level in theSouthern states of India is different from the state of the sector in the North Eastern orthe Northern part of the country. Consequently, the respective institutions are dealingwith a different set of issues concerning their operations or institutional needs. Thusthere is a need to design and deliver programmes that would appeal to the regional needsof practitioners. The sub-group deliberated on the possibility and feasibility of conceivingprogrammes at regional level. It was strongly felt that regional MEPs would be an effectivemechanism to capture the regional state of the sector and address its respective needs.

In view of this, the capacity building sub-group of Sa-Dhan is looking forward to roll outa Regional MEP (RMEP) as a collaborating effort between Sa-Dhan and its memberorganisation.

Exposure visit of MEP Participantsto Women’s Institution in AP

Sa-Dhan 23

4.1.2.2 MEP

The MEP underwent a radical change in orientation from a purely practitioner ledprogramme to a programme which is broad based, where in addition to practitioners,academics would play a major role. The sub-group identified academic partners andestablished collaborations with training institutes, academics and trainers includingmainstream management institutions. The livelihood module benefited a great deal fromthe manual developed and funded by another of Ford Foundation’s projects.

Recognising the need for a greatereffort to push the programmatic‘learning into practice’ and forscaling up of the capacity buildingefforts, the following major stepswere identified:

a. In case the participant is nota Chief Executive Officer(CEO), information kit ofthe important aspects ofmicrofinance should beprovided for the CEO.

b. Cost implications are usually the barrier for any institution in improving ongoingsystems. The policy sub-group should be requested to lobby for activating theInstitutional Development Cost Support Fund available with NABARD.

c. The national level MEP should focus on generic issues and should initiate workon new areas that can subsequently be taken up by the regional programs.

d. Each module of MEP should have a Training of Trainers (TOT) relatedcomponent as this would be crucial in building an extended faculty group forimproving the outreach of capacity building initiatives.

The review exercise also highlighted the importance of visiting global learning andexchange. It would be important for MEP participants to get exposure to the initiativesand interventions on the issues similar to the concerns in India. However, this has burdenedMEP program, both time wise as well as cost wise. Work has been initiated through therequisite meetings and interaction with institutions and practitioners abroad.

The details of the training programs conducted by Sa-Dhan during the period underreporting are given in Table 2.

Federation Leader Explaining PRA Exercise

Sa-Dhan 24

S. No. Modules

1 Module IPerspectiveBuilding InMicrofinance

2 Module IIPerspectiveBuilding inLivelihoodpromotion

Date and Venue

November 26- 1Dec. 2001 atMANAGE,Hyderabad

Feb. 19-24, 2002at Centre forSmall ScaleEnterprises,XLRI,Jamshedpur

Contents

1. Financial Services to thePoor

2. Microfinance -An overview

3. Various Models ofDelivery

4. Strategic BusinessPlanning and Opera-tional Planning forCDFIs

5. Legal Policy Issues

6. Standards and Perfor-mance indicators

7. Sustainability ofmicrofinance institu-tions

8. Beyond Sustainablemicrofinance: Promot-ing Livelihoods forMillions of Poor households

What Livelihoods mean forpoor people?

Why promote livelihoods?

An overview of differentlivelihood approaches

A framework for livelihoodanalysis

Selecting appropriatelivelihoods

Getting to know the localeconomy

Stage 2: Identifyingpotential livelihoodopportunities and

Stage 3: Understanding theeconomic system withinwhich the livelihoodopportunities operate

Faculty

Mr. Vijay Mahajan

Prof. DavidGibbons

Mr. Harish Chotani

Mr. V Nagrajan

Mr. Mathew Titus

Dr. Sankar Datta

Ms. VijaylakshmiDas

Mr. R K Mukherji

Mr. Rama Reddy

Mr. DSK Rao

Dr. Sankar Datta

Ms Gitali Thakur

Mr. Vinod Jain

Prof. Reshmi Mitra

Prof. Venu Gopal

No. ofparticipants

25

Table 2: Programme Schedule of MEPs

Sa-Dhan 25

4.1.2.3 DEVELOPMENT OF REGIONAL PROGRAMS

To address the fundamental challenge of diversity in the microfinance sector and amongmicrofinance practitioners, the sub-group felt it important to identify the key factors thatneed to be addressed at the regional level. After deliberations and a few field visits amongthe regional members, the following issues were identified to be critical that demand aregional framework:

Ø Outreach of microfinance

Ø Maturity of microfinance programmes

Ø Multiplicity of approaches

Ø Different contexts, types and levels of issues related to livelihoods promotion

Ø Language

A. Setting up of Maharashtra regional forum of Sa-Dhanmembers

The Maharastra regional forum was set up by involving Sa-Dhan’s members. A designworkshop on RMEP and local stakeholders’ forum were held. A resource mapping exercisewas also jointly conducted by Sa-Dhan and its members based in Maharashtra. This wasfollowed by a program design workshop held in Pune on the 18th of March 2002, involvinglocal resource institutions, banks, support agencies, practitioners etc., the exercise resultedin the following pilot initiative.

The sub -group decided to facilitate the delivery of the regional programmes as fol-lows :

Ø Local stakeholder forums identifying the requirements

Ø Identifying a local resource agency/s for the regional programmes

Ø Assisting the local resource agency/s in developing appropriate curriculum forthe education Programmes

Ø Helping the resource agency to identify local faculty

Ø Help develop linkages with training institutions, RBI college of Agricultural Bank-ing, National Institute of Bank Management (NIBM), individuals and inter-ested academics to assist in the delivery of programmes

Ø Help develop education material in local languages if needed

Ø Assisting in the planning and execution of the delivery of the programme

Sa-Dhan 26

4.1.2.4 MAINSTREAMING MICROFINANCE CAPACITY BUILDING

One of the efforts initiated in this direction was to try to mainstream the delivery ofmicrofinance capacity building by getting eminent academic institutions to offer courseson microfinance and livelihood promotion as a part of their curricula. Efforts were madeto draw knowledge resources from established academic institutions to further add valueto the hands-on inputs provided by the practitioner-faculty. This was done through aseries of meetings held at the Indian Institute of Management, Ahmedabad and XLRI,Jamshedpur.

4.1.2.5 IDENTIFYING GENERIC ISSUES IN MICROFINANCE

Sa-Dhan will undertake research/study to identify the generic issues in the microfinancesector so that they could be further examined and understood in detail and addressed bythe sub-groups. Till date Sa-Dhan has completed and published a research project onexploring possibility of self-regulation – “Microfinance Regulation in India”, in 2001.

At present there is an ongoing research project on “Federation of microfinance SHGs inIndia” which is delineated below:

The Challenge before Federations: The Basis for Sa-Dhan’s Study

Across India, federations have emerged as an alternative institutional form for up scalingthe outreach and the provision of financial services to poor and marginalised householdsand their enterprises. Women members are the overwhelming majority members of SHGs.The challenges confronting organisations engaged in the promotion of federations ofSHGs as well as federations themselves are a facilitating legal and operational environment,the availability of resources, their capacity building needs, the recognition of these structuresfor the growth of the SHGs by different stakeholders and identification of an appropriaterole and support for NGOs promoting and developing federations.

Study Objectives

The study on Federation ofSHGs has the followingobjectives:

1. Developing a comprehensiveand critical understandingof federations of SHGs

Identifying the capacitybuilding needs offederations for becoming Visit to SHG in a Village, Orissa

Sa-Dhan 27

viable and sustainable financial intermediaries.

2. Identifying best practices

The study attempts to capture the critical components of the process pursued forpromoting federation for its replicability.

METHODOLOGY AND APPROACH

The study has adopted the participatory approach by involving members of differentorganisations, and different sets of practitioners representing different approachesand methodologies in promoting federations of SHGs. The participatingorganisations are MYRADA, Chaitanya, FWWB, OUTREACH, RGVN, PRADAN,DST, Shramik Bharti and Sa-Dhan. The team is supported by another team workingon the financial analysis of the federations visited by the study team. The financialanalysis team is envisaged to facilitate the understanding of the sustainability aspectsof federations and strengthen the suggestions and recommendations of the study.

A representative sample of approximately thirty federations at different stages oftheir growth and pursuing different approaches has been selected based upon whicha typology will be developed. This will lead to the identification of a range of factorsunder each typology that contributes to the formation and management of thefederations. The study findings would enable the practitioners, donors and otherstakeholders to understand the issues effecting community based institutions forbetter delivery of services, strategic intervention and replication of models.

Attempting for a Better Livelihood

Sa-Dhan 28

5.1 SUB-GROUP PLANS AND ASSESSMENT

The period under reporting (April 2001 to March 2002) has seen Sa-Dhan’s workbuild up momentum. The critical task of laying the groundwork in each of the

three thematic areas has culminated in the development of comprehensive plans andstrategies for the growth of the three vital elements of the microfinance sector –policy,standards and capacity building. The future strategies now are based on the critical needsof the sector that have been identified through a lengthy and painstaking process ofawareness building, sensitisation, and initiation and continuation of dialogue anddiscussions through various platforms that have brought together different stakeholderssuch as members, donors, commercial banks, regulators and policy makers.

The future task before Sa-Dhan is challenging and which requires a deep commitmentfrom all the stakeholders, especially its members. One of the critical needs is to build agreater cohesiveness among the three essential components of the sector as reflected bythe three sub-groups. Efforts must be made to ensure that the work of each of the sub-group supports the others and builds upon their common synergies in line with thevision and mission of Sa-Dhan. Simultaneously, Sa-Dhan must deepen its engagementwith different stakeholders and create more fora for exposure and exchange.

5.2 POLICY SUB-GROUP

The Policy Group will carry on with its continuous effort at informing and broadeningthe stakeholder awareness and support which would require strengthening of the team.The pending recommendations made by the Microfinance Task Force Report would becontinued to be addressed especially those relating to The Banking Regulation Act, NBFCregulations, Co-operative Act, and Income Tax Act.

Work on the issue of self-regulation of the microfinance sector in India that had earlierbegun with a research study will now move into its next phase. Sa- Dhan is proposing toundertake steps highlighted by the study that will contribute to the emergence of solutionsfor self-regulation.

Efforts to decrease the legal and operational constraints within which the sector operateswill assume focus. As with other Sa-Dhan initiatives, any solutions sought will be donewith the participation of the critical stakeholders.

PROGRAMME ASSESSMENT,AND FUTURE DIRECTIONS

CHAPTER 5

Sa-Dhan 29

To facilitate a greater flow of resources into the sector, efforts will be enhanced by the sub-group in partnership with the banking sector and the Government of India to providegreater exposure to branch managers and bureaucrats to successful examples andmethodologies of MFI work.

The dialogue with policy makers needs to continue at an enhanced pace in order toaddress a host of legal and policy constraints that are hindering the MFI sector. TheEmpowered Committee on Microfinance that has been set up jointly by Sa-Dhan withthe Ministry of Finance would serve as a bridge between policy makers and the MFsector. In addition, the sub-group would continue to organize research and policy forumson a regular basis to share their findings and experiences with the different governmentdepartments.

5.3 STANDARDS SUB-GROUP

While going ahead, one of the most important issues that Sa-Dhan will need to work onis to improve and maintain high standards of performance in the sector especially financial,as this would facilitate a greater flow of resources to the sector.

A core group to examine operational practices of different organizations was set up withthe objective of identifying the different accounting and financial practices that are prevalentin the sector. This was a first step towards establishing uniformity in the accounting andfinancial practices. The sub-group would encourage the development of local learningloops that includes both members and non-members.

The sub-group will undertake the following activities in the coming year:

Ø Finalising standards on “Financial Performance Measures”

Ø Preparing operating manual for MFIs.

Ø Preparation of draft standards for SHGs

Ø Developing guidelines for governance standards for MFIs

Ø Training workshops on standards.

Ø Publication of training and informative documents on standard

5.4 CAPACITY BUILDING SUB-GROUP

A key issue for the sector is the need to address the new and emerging capacity buildingneeds in the areas of standards and systems, scale of operations, and to facilitate the entryof new NGOs/MFIs. A related and most critical issue is the flow of resources to the sectorthat can meet the enhanced capacity building requirements of the present players as wellas the needs of the new entrants. For that the following steps will inform future action:

Sa-Dhan 30

1. Continuous review and strengthening of the process of the MEP to keep it abreastwith the latest developments and emerging needs of the sector for building theperspective of the new entrants in the sector.

2. Developing and delivering the regional MEPs in partnership with a regional memberin order to ensure that regional needs and context are fully covered. The sub-groupwould also assist its members to expand their own training departments in order tooffer multi-location training programs that are geared towards meeting local needs.

3. Developing a strong information and knowledge base by initiating action researchin the areas of microfinance that need a deeper understanding than is currentlyavailable and developing a strong database on critical aspects of the sector.

4. Developing exchange programs for Indian practitioners and policy makers to providethem with exposure to successful international experiences in the field.

5. Initiating and co-coordinating research studies on issues concerning the sector anddeveloping issue related information dissemination plans.

5.5 REGIONAL INITIATIVES

Given the cultural and geographical diversity of the country coupled with the variety ofmicrofinance models and approaches, one of the critical elements of Sa-Dhan’s futurestrategy will be to ground its different initiatives in a regional context. This will be donethrough the establishment of regional round tables focusing upon:

1. Regional round table in policy strategy

2. Local learning loops in standards

3. Regional MEP in capacity building

5.6 ASSESSMENT

The past year has seen the focus of Sa-Dhan’s work move increasingly towards improvingthe quality of the programs and products that it had developed during the earlier year.The MEP was refined both in its structure and its content and orientation. The Policygroup not only focussed on pushing the awareness and the attention of the stakeholdersbut crucially also strengthened member awareness on these issues by having a workshopfor its members that helped not only in educating them but also in adding to the policyagenda. Similarly, the standards group moved toward the concrete collection of data thatwould enable it to understand and comprehensively identify the state of operations of itsmembers, resulting in wider appreciation of the sector. Clearly, these are the first stepsand the present year will continue to focus on strengthening these improvements andadding these initiatives.

Sa-Dhan 31

These initiatives though have tested our present human resources. In order to carry outits mandate, Sa-Dhan has to strengthen its organizational strengths by providing specialattention to developing human resources and improving the facilities at work for enhancedefficiency. Although Sa-Dhan emphasises training, the nature of its work demands thatspecialised training and up scaling of staff be done on a continued basis. Hence, specialattention would need to be paid to training the staff in a more systematic and plannedmanner and by also hiring staff for addressing specialized needs. At present Sa-Dhan isworking with minimal facilities which in relation to the growing work load are over-utilized and over-stretched and require critical additions. All these organizational relatedconcerns need to be addressed in the near future.

Before we end, we would like to take this opportunity of thanking our Board members,Heads of sub-groups and our members for their continued support and encouragementin our activities. We look forward to their continued participation and support.

Sa-Dhan 32

1. Auditor’s Report and Financial Statements for the year 2001-2002 34

2. Sa-Dhan Members 37

APPENDIX

Sa-Dhan 33

THE MEMBERS OF SA-DHAN ASSOCIATION

We have examined the attached Statement of Affairs, Income and ExpenditureAccount and Application of Grants of Sa-Dhan Association for the year ended

March 31st 2002 and report that

a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit :

b) In our opinion, proper books of accounts as required, have been maintained by theSociety, so far as appears from our examination of such books ;

c) The financial statements of the Society as referred above, are in agreement with thebooks of accounts of the Society ;

d) In our opinion, the financial statements referred to above, have been drawn incompliance with Generally Accepted Accounting Principles ;

e) In our opinion and to the best of our information and according to the explanationsgiven to us, the said financial statements along with notes thereon, give theinformation required and give a true and fair view,

i. in the case of Statement of Affairs, of the state of affairs of its assets, liabilitiesas on March 31, 2002;

ii. in the case of Income and Expenditure Account, the surplus for the year endedMarch 31, 2002 ;

f ) We further certify that :

i. No personal expenses of the members of the Society has been charged to theSociety ;

ii. The activities of the Society have been in conformity with the objects of theSociety ;

iii. None of the members of the Governing Board is a debtor or creditor of theSociety;

iv. The norms relating to maximum and minimum number of members ofGoverning Board was adhered to during the year;

For K. Vijayaraghavan & AssociatesChartered Accountants

Sd/-Place: Hyderabad, K. VijayaraghavanDate: Proprietor

AUDITOR’S REPORT

Sa-Dhan 34

STATEMENT OF AFFAIRS AS ON 31ST MARCH 2002

2001-2002 2000-2001ASSETS SCH Amount Rs. Amount Rs.

1 FIXED ASSETS: IGross Block 419,164 288,762Less: Depreciation 251,445 98,752Net Block 167,719 190,010

2 INVESTMENTS:Investments in fixed deposits - 600,000

3 CURRENT ASSETS : II 297,574 625,4684 CASH & BANK BALANCES:

Balances with Scheduled Banks:Canara Bank-New Delhi 1,911,221 155,087ICICI Bank Ltd 820,046 7,614Canara Bank-Hyderabad 118,737 39,401Cash on Hand 6,794 7,356

SUB TOTAL 2,856,798 209,458TOTAL 3,322,091 1,624,936

LIABILITIES1 UN-UTILISED GRANTS-IN-AIDa) Grants from Indian Agency

SIDBI - 57,225ICICI 615,186 -

615,186 57,225b) Grants from Foreign Agency

Ford Foundation 68,505 -Canadian Co-Operative Association 844,591 -

913,096 -SUB TOTAL 1,528,282 57,225

2 GENERAL FUNDOpening balance b/fd 1,541,567 816,002 Add: Excess/(Short) of income over expenditure (870) 725,566SUB TOTAL 1,540,697 1,541,568

3 CURRENT LIABILITIES: III 253,112 26,143

TOTAL 3,322,091 1,624,936

STATEMENT OF UTILISATION OF FUNDSFOR THE YEAR 2001-02 XACCOUNTING POLICIES XINOTES FORMING PART OF ACCOUNTS XIITHE SCHEDULES I TO III AND X TO XII REFERRED ABOVE FORM AN INTEGRALPART OF THIS STATEMENT OF AFFAIRS

As per our report of even dateFor K.Vijayaraghavan & Associates For Sa-DhanChartered Accountants

Sd/- Sd/- Sd/- Sd/-K Vijayaraghavan Mathew Titus Sanjay Sinha Vijay MahajanProrietor Executive Director Treasurer Co-Chair

Place: HyderabadDate :

Sa-Dhan 35

INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2002

2001-2002 2000-2001ASSETS SCH Amount Rs. Amount Rs.

INCOME (A)Grant - in - aid - recognised as income - SCHEDULE - IV 3,916,046 2,982,192Membership & Subscription 80,000 200,000Program Fees 350,100 452,739Interest Income 24,794 12,956Misc Income including Consultancies 477,199 224,633

TOTAL (A) 4,848,139 3,872,520

EXPENDITURE (B)

Expenditure on the Association for CommunityDevelopment Finance Institutions - 810,788

SCHEDULE VTraining and Capacity Building Expenses 1,190,876 523,607

SCHEDULE VIPolicy Work 702,303 306,430

SCHEDULE VIIStandards and Database 700,804 804,535

SCHEDULE VIIIOverheads and Organisational Expenses 1,191,661 454,358

SCHEDULE IDepreciation on fixed assets 152,693 98,752

SCHEDULE IXExpenses from Sa-Dhan’s Own Income 910,672 148,485

TOTAL (B) 4,849,009 3,146,955

NET SURPLUS / (DEFICIT) FOR THE YEAR (A)-(B) (870) 725,565

NET SURPLUS / (DEFICIT) BROUGHT FORWARD 1,541,567 816,002

NET SURPLUS / (DEFICIT) CARRIED TO STATEMENT OF AFFAIRS 1,540,697 1,541,567

SCHEDULE - X - STATEMENT OF UTILISATION OF FUNDSSCHEDULE - XI - ACCOUNTING POLICIESSCHEDULE - XII - NOTES FORMING PART OF ACCOUNTSTHE SCHEDULES I AND IV TO XII REFERRED ABOVE FORM AN INTEGRAL PART OFTHIS INCOME AND EXPENDITURE ACCOUNT

As per our report of even dateFor K.Vijayaraghavan & Associates For Sa-DhanChartered Accountants

Sd/- Sd/- Sd/- Sd/-K Vijayaraghavan Mathew Titus Sanjay Sinha Vijay MahajanProrietor Executive Director Treasurer Co-Chair

Place: HyderabadDate :

Sa-Dhan 36

SA-DHAN MEMBERS

ANDHRA PRADESH

BASIX

Mr Vijay MahajanManaging Director501-502, Nirmal TowersDwarakapuri Colony, PunjaguttaHyderabad - 500 082

SHAREMr M Uday KumarManaging Director“Shekinah” 12-13-680, Nagarjuna NagarTarnakaHyderabad - 500 017

Indian Grameen Services (IGS)Dr Sankar DattaVice President (Ops. & HR)404, Nirmal Towers, Dwarakapuri Colony,PunjaguttaHyderabad – 500 082

SpandanaMs G PadmajaDirector3-30-45/2, Nalanda NagarOpp.Bommidala Kalyana MandapamGuntur-2

Mahila Abhivruddhi Society, A.P. (APMAS)Mr CS ReddyChief Executive OfficerDoor No.8-2-120/86/9/H/20,Plot No.20 (Near LV Prasad Eye Institute)Road No.2, Banjara HillsHyderabad – 500 034

Krishna Bhima Samruddhi Local -Area Bank Ltd.,Mr DRK RaoManaging DirectorB.K.Reddy Complex, New TownMahboobnagar - 509 001

Swayam Krishi Sangam (SKS)Mr. Vikram B. AkulaChief Executive OfficerH.No.839-S, Rd.No.44/AJubliee HillsHyderabad - 500 033

BIRDS (Bharati Integrated Rural Dev. Society)Secretary cum Executive Director#26/130 B2, Eva Nest, GnanapuramNandyal - 518 502

ASSAM

Rashtriya Gramin Vikas Nidhi (RGVN)Ms Mahfuza RahmanExecutive Director,8th Bylanes, Rajgarh RoadGuwahati – 781 003

BIHAR

ADITHI

Ms Viji SrinivasanManaging Director2/30, State Bank Colony-IIBailey Road, Near JagdeopathPatna – 800 014

DELHI

All India Association for Micro Enterprise(AIAMED)Mr V SatyamurtiExecutive DirectorC-8/8113, Vasant KunjNew Delhi 110 070

PRADANMr D Narendra NathProgramme Director3, Community Centre, Nitti BaghNew Delhi – 110 049

Sa-Dhan 37

CARE-CASHEMr. Harish ChhotaniDirector27, Haus Khas VillageNew Delhi – 110 016

GUJARAT

Mahila Sewa Sahakari Bank (SEWA Bank)Mrs Ela R Bhatt/ Ms Jayashree VyasChairperson/ M.D.109, Sakar-2, Ellis BridgeOpp: Town HallAhmedabad – 380 006

Samerth TrustMr Bhabani DasTrusteeQ-402, Shrenand Nagar Part-IIVejalpurAhmedabad - 380 051

Friends of Women’s World Banking/India(FWWB)Ms Vijayalakshmi DasExecutive DirectorG-7, Sakar I BuildingOpp: Gandhigram StationAshram RoadAhmedabad – 380 009

HARYANA

EDA Rural Systems Pvt LtdMr Sanjay SinhaExecutive Director107, Qutab PlazaDLF Qutab Enclave-IGurgaon – 122 002

JHARKHAND

Nav Bharat Jagriti Kendra (NBJK)Mr Girija SatishExecutive DirectorAt-Amritnagar, KorrahDist. Hazaribag - 825 301

KARNATAKA

Association of Women Entrepreneurs ofKarnataka (AWAKE)Ms Sudha PrakashChairperson# B-76, KSSIDC Industrial Estate, RajajinagarBangalore – 560 044

SANGHAMITRA Rural Financial ServicesMr Aloysius FernandezNo.2, Service Road, Domlur LayoutBangalore – 560 071

Bharatha Swamukti Samsthe (BSS)Dr Ramesh BellamkondaProject DirectorRegd.Office.B-81, Ind.Estate, RajajinagarBangalore - 560 044

Grameen Koota

Ms Vinatha M ReddyManaging TrusteeAvalahalli, Anjanapura.P.O.Bangalore - 560 062

OUTREACHMr RM PalannaExecutive Director109, Coles Road, Fraser TownBangalore – 560 005

KERALA

Bharat Sevak Samaj (BSS)Mr BS BalachandranGeneral SecretarySadbhavana BhavanKowdiar P.O. – 695003Thiruvananthapuram

Evangelical Social Action Forum (ESAF)Mr K Paul ThomasExecutive Director (Hony.)P.B. No. 12, Hephzibah ComplexMannuthy Trichur - 680 651

Sa-Dhan 38

MAHARASHTRA

Development Support Team (DST)Mrs H BediFlat 104, Plot 86, Kanchan Junga Aprtmnts,Kanchan Galli, ErandwanPune – 411 004

Housing Development FinanceCorporation Ltd. (HDFC)Mr Harish KhareSenior OfficerRomon House, 4th Floor169 Backbay ReclamationMumbai – 400 020

ChaitanyaDr Sudha KothariC/o Nucon Product and Pvt. Ltd.771, No 4, Mayur ApartmentsBhandarkar Institute RoadDeccan, GymkhanaPune - 411 004

Watershed Organisation Trust (WOTR)Dr Marcella D’souzaProgram CoordinatorParyavaran’ Behind Market YardAhmednagar - 414 001

Amhi Amchya Arogyasathi (AAA)Ms Shubhada DeshmukhMember-Executive CommitteeTaluka KurkhedaGadchiroli - 441 209

ICICI Home LoansMr Suresh ChandnaniAssistant Vice PresidentICICI Towers, South Block6th Floor, Bandra Kurla ComplexMumbai – 400 051

BAIF Development Research FoundationMr SB KarvandeSr. Vice PresidentDr. Manibhai Desai NagarWarje, N.H.No.4Pune - 411 052

Development Initiative for Self-Help andAwakening (DISHA)Mr PS MukherjeeSecretaryC/o Samaj Seva Kendra, Sr.Np.:4272Behind Akrudi P.O, AkrudiPune - 411 035

ORISSA

Centre for Youth & Social Development (CYSD)Mr JagadanandaMember-SecretaryE-1, Institutional Area, P.O. R.R.L.Bhubaneshwar – 751 013

RAJASTHAN

ARAVALIMr Sachin SachdevaPatel Bhawan, HCM-RIPAJawaharlal Nehru MargJaipur – 302 017

Cecoedecon Development CentreMr.P.M.PaulDirectorShilki Dungari, ChaksuJaipur - 303 901

SEVA MandirMrs Neelima KhetanChief ExecutiveOld FatehpuraUdaipur - 313 004

TAMIL NADU

DHAN FoundationMr M P VasimalaiExecutive Director18, Pillaiyar Koil Street, S S ColonyMadurai – 625 010

Sarvodaya Nano Finance Ltd.Mr R SomithriExecutive Director279, Avvai Shanmugam Salai, RoyopettaiChennai - 600 014

Sa-Dhan 39

Sarva Jana Seva Kosh Ltd. (SJSK)Mr R ViswanathanManaging Director279, Avvai Shanmugam RoadChennai – 600 014

The Activists for Social Alternatives (ASA)Mr S DevarajChairmanSathia Illam, 2-A, 10th Cross, Alli StreetAnnamalai NagarTiruchirappali 620 018

Micro Finance Consulting Group (MCG)Mr Ramesh S ArunachalamSenior ConsultantA1-A2 (Ground Floor), JJ Terrace14 Judge Jambulingam RoadChennai - 600 004

SHEPHERDMr N Peter PalanisamyExecutive SecretaryI-C, Ishwarya Apartments68, Officers Colony, PuthurTrichy – 620 017

Kalrayan Hills Area DevelopmentProgramme (KH ADP)[A Project of World Vision of India]Mr James NeilManager3/35, H Iyer Lane, MeiyanoorSalem – 636004

League for Education and Development(LEAD)Mrs N RadhaExecutive Director80/40, 1 Street, Rayar ThoppuSriramapuram, SrirangamTrichirapalli - 620 006

Pioneer TradMs Jasmine LydiaPresident47/2, Paddy Field St., PeramburChennai - 600 011

Thirumalai Charity Trust (TCT)Mrs Booma ParthasarathyDirector3-2/83, Nethaji Nagar(Behind Central Co-operative Bank) , SipcotRanipet - 632 403

UTTAR PRADESH

Grameen Development Services (GDS)Mr RK MukherjeeProject Director – Grameen KoshB-1/84, Sector-B, AliganjLucknow 226 024

Shramik BhartiMr Ganesh PandeyConvener392, Vikas Nagar (Lakhanpur)Kanpur – 208 024

Cashpor Financial & Technical Services Ltd.(CFTS)Mr David S GibbonsExecutive ChairmanPili KothiMirzapur - 231 001

Manav Seva Sansthan “SEVA”Mr JatashankerExecutive SecretaryL.I.G., 1-198, Vikas NagarP.O. Jungle Beni Madhava, (Via) F.C.I. FactoryGorakhpur – 273007

WEST BENGAL

Village Welfare Society (VWS)Mr AK MaitySecretaryF-3, Geetanjali Park18/3A, Kumud Ghoshal Road, AriadahaKolkata - 700 057

Sa-Dhan 40

The Association ofCommunity Development

Finance Institutions

B-4/3133,Vasant KunjNew Delhi 110 070

Tel. : 91 11 613 8932Telefax : 91 11 613 2629

sa_dhan@mantraonline.comWebsite : www.sa-dhan.org