Sonata Finance Pvt

8/4/2019 Sonata Finance Pvt

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SONATA FINANCE PVT. LTD.

MICRO-FINANCE PLUS MODEL


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MISSION & VISION

SONATA FINANCE has set itself a mission toIdentify and motivate poor women in a cost-effective way and deliver them micro finance servicesin an honest, timely and efficient manner.

VISION

The vision of SONATA is to help building a societythat contains an opportunity to develop the minimalsocio-economic conditions needed to live a life ofdignity.


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APPROACH

SONATA has adopted an individual as well as group lendingapproach and few other best practices with some minoradjustments to suit local conditions.

SONATA lends money to individuals or groups of 10 or 20women members and designates them as the ultimateguarantor of each of its members.

If one member does not repay the loan, no individual in the

group is eligible to receive another loan.

The operating philosophy of SONATA is to solely focus onproviding financial services.


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KEY FACTORS OF APPROACH

SOCIAL COLLATERAL

The poorest do not have physical assets that can be usedas security or collateral. Instead, borrowers are organisedinto groups and take collective responsibility for therepayment of the loan of each member of the group.

CASH LESS OPERATION

SONATA disburses the loans through bearer cheques,and most of the collection is deposits in SONATA's bankaccounts in the commercial banks or at the Branchoffices of SONATA. This reduces risk while very little

cash is floating around.


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CUSTOMIZED PRODUCTS

SONATA has designed loans with small repayments thatcorresponds to wage structures, consumption andincome generating activities to prevent emergency

distress sales. The first loan granted is always relativelysmall and is used to inculcate credit discipline andcollective responsibility.

FOCUS ON WOMEN

SONATA works exclusively with women because they arethe most marginalized among the poor and because theytend to invest the majority of their income into thehousehold and for their children.


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OUR WORK

WHAT WE DO

SONATA provided loans to individual as well as groupmembers in poor regions of India for a range of income-

generating activities. Sonata also offers emergency loans,money transfers and gold loans to its members.

SONATA serves thousands of poor people across villages

and urban slums in India. By providing the poor thisrange of economic tools, they are looking forward toeradicate poverty.


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OUR PRODUCTS AND SERVICES

1. INCOME GENERATING LOANS

2. THE EMERGENCY LOANS

3. INDIVIDUAL LOANS4. MONEY TRANSFER

5. GOLD LOANS


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INCOME GENERATING LOANS

In the initial growth periods, SONATA only offersone basic loan product, which is restricted to incomegenerating activities.

During the first cycle and on average, clients applyfor a loan of a maximum Rs.8,000 ( the minimumamount is Rs. 2000). During each cycle thereafter ,

the client has the option of applying for up to 120%of the previous loan amount.


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INCOME GENERATING LOANS

The basic loan is repays in equal weekly instalmentsat "centre meetings" held in the local communities.Prepayment of principal is possible but only if theclient settle the entire balance of the principaloutstanding.

The Centres are the heart of SONATA operations asthis is where all transactions take place: loanapplication, initial approval (from group members),and collection of the deposits slips.


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THE EMERGENCY LOANS

Like the basic loan, the emergency loan must beapproved by all the associates in the group.

The emergency loan will be granted for a term of 25weeks with weekly payments and the maximum loanamount is Rs.2,000.


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PROGRAMS

INSURANCE

Presently, SONATA is working with three insurancecompanies - LIC, ICICI Prudential and Birla Sun Life

in delivering the life insurance products to its clients.

HEALTH CAMPS

SONATA has tied up with some health care providersin delivering health care services to our clients.


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PROPOSED STRUCTURE

INSURANCE FOR EDUCATION

Provide interest free education loans to poor childrenand scholarships to deserving students and Help

Eradicate poverty through education.

EDUCATION

INSURANCE


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MODEL

It is a combination microfinance plus educationmodel.

In this model, women who receive loans areencouraged to send their children to a partnereducation NGO- BHARTI FOUNDATION for "free"or at a subsidised rate.(depending on the need)

The partner institutions decide how the finances areshared (the interest payments) for optimalsustainability of both organisations.


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EDUCATION INSURANCE

As SONATA serves poor women across North India,they should believe that education is one way out ofpoverty.

The mushrooming of Private schools is attractingmany poor parents to send their children to suchschools.

The poor turned to private schools for qualityeducation. They spend around Rs. 5000/- per childannually, on fees, books and uniforms mainly bytaking loans from moneylenders or by other means.


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SONATA+BHARTI FOUNDATION= QULAITY EDUCATION

SONATAs collaboration with NGO BHARTIFOUNDATION will provide its customers an EducationLoan plus schooling in SATYA BHARTI SCHOOLS.

This loan will be provided per child at affordable rates,giving the poor the freedom

70% of the education loans will be disbursed for girls.

Smaller family size will be provided with better facilities.

Aim to encourage family planning for young couples.


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IDENTIFICATION STAGE

The two main areas to be analysed at this stage are thepotential customers and the existing financial services(formal and informal) the target group has access to.

A brief workshop with potential customers (with an equalnumber of men and women with children) could be heldraising the issues related to financing as well as theeducation system.

This will help to find out their needs and constraints inaccessing and using credit and identifying the existingsources of finance and how adapted these are to theirneeds.


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FORMULATION STAGE

LOAN USE AND ELIGIBILITY CRITERIA

INTEREST RATE

LOAN SIZE

LOAN DURATION LOAN COLLATERAL AND CONFIDENTIALITY

APPROVAL TIME

REPAYMENT TERMS SAVINGS

FORCED SAVINGS


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LOAN USE AND ELIGIBILITY CRITERIA

PHASING- THREE YEAR ( 4 PHASES)

STANDARD RATE OF INTEREST

SUBSIDIZED RATE OF INTEREST

CSR ACTIVITY FOR FUNDING EITHER SONATAOR MULTI-FUNDING AGENCY

GIRL EDUCATION FLEXIBILTY


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EVALUATION STAGE

STUDENTS PERFORMANCE

MOTIVATION FOR HIGHER STUDIES

ENCOURAGE DONORS

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