Sector Own Control APMAS Pilot in Kamareddy Cluster, Andhra Pradesh.
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Transcript of Sector Own Control APMAS Pilot in Kamareddy Cluster, Andhra Pradesh.
The Indian SHG MovementThe Indian SHG Movement
One of the best financial intermediaries for the alleviation of
widespread poverty due to
a tremendous potential for outreach,
a low cost approach and
its flexibility.
Combined with the Bank linkage program of NABARD and
about 4 million bank linked SHGs it is the biggest and
fastest growing microfinance program in the world.
The Indian SHG movement is huge and heterogeneous,
and thus supervision by Govt. authorities difficult
SHGs are unregistered
SHG Federations are registered under various laws, e.g.
different co-operative laws (e.g. MACS Act), Societies Act,
etc.
Under Co-operative law obligation for annual external
audit, AGM and filing of annual returns
No regulation and supervision of the sector so far
Regulation of SHGs in IndiaRegulation of SHGs in India
SOC provides reliable information about the performance of
a mF organisation
facilitates proper financial management and reduces risk
builds ownership and trust among the members
increases trust on the part of other stakeholders like
banks, facilitating access to additional funds, e.g. from bank
linkage program.
increases active participation of the members, thus
contributes to empowerment of women.
provides for well functioning SHGs and their federations
WhyWhy SoCSoC
Adequate norms and standards (external and internal)
Approved common bookkeeping and accounting
Effective internal control of management and risks
Sector-wide reporting, monitoring and rating (off-site sector
control)
Compulsory cooperative audit
Follow-up activities
Institutional protection, deposit insurance
Linkage to the Financial Regulator for regulatory and
supervisory duties.
Important elements of a SOC-systemImportant elements of a SOC-system
SHGs and their federations have the potential for being
highly self-reliant and sustainable, but
currently depend on external agencies for financial, human
and material resources
take savings deposits from their members – need checks
and balances to control the various financial transactions
need to strengthen internal capacities, improve systems,
increase accountability and transparency
In 2007 APMAS together with DGRV and SERP started a pilot
in the Kamareddy Cluster in Andhra Pradesh to promote
self- control and self-regulation
Why the PilotWhy the Pilot
To contribute to and ensure the further
successful development and sustainability of
the SHG system
The Overall ObjectiveThe Overall Objective
1. Economic and Social Development of the members
Member savings protection
Sustainable growth of thrift and credit services
Financial Literacy among the members
2. Sustainable Democratic and Legal Institutions
Growth of resources
Equality among the members
Profitable Institution
Institutional Accountability
SpecificSpecific ObjectivesObjectives
The Structure of the PilotThe Structure of the Pilot
… supported by an Advisory Group comprising staff of
APMAS and the Government Project IKP
To build and enhance the capacity of SHG members to run
and control their SHGs and federations on their own.
Therefore
members and office bearers of the federations are trained
to be capable to implement the developed systems
standards are developed
a simple but standardized system of bookkeeping is
introduced
internal control and audit are introduced
manuals for training on the related topics are elaborated
The StrategyThe Strategy
Trainings
ActivitiesActivities so so farfar
Subject (as of 30.06.2009) No. of trainings
No. of participants
Training of Trainers on SHG Bookkeeping 8 195
Training on SHG Bookkeeping to Bookkeepers 56 712
Refresher on SHG Bookkeeping to Bookkeepers 4 57
Understanding Financial Statements of a Federation
2 49
Training on Internal Audit to SHG Auditors (Members), incl. Master Auditors
6 112
Training on Bookkeeping to Federation Office Bearers and CC Audit Subcommittee Members
2 22
Elaboration of 11 Booklets on The significance of Savings
The significance of loans
SHG - Bookkeeping
Reconstruction of Accounts
SHG external audit
Federation Bookkeeping
Annual planning - Federations
Federation internal audit
Federation external audit
Election process in SHGs and Federations
Annual planning – SHGs
ActivitiesActivities so so farfar