sarvodaya nano finance
TRANSCRIPT
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GREETINGS TO ALL
ON BEHALF OF
THE SHGsWHO ARE THE OWNERS OF
THIS UNIQUE INSTITUTION
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Genesis of the OrganizationAssociation for Sarva Seva Farms (ASSEFA- an NGO Registered
under the TamilNadu Societies Registration Act, 1872 in the year
1969) started working with rural communities based on the conceptsof Sarvodaya and empowerment of the rural communities
adopting the multi-sector approach for development.
Started working with the State Government in the IFAD funded
initiative for the betterment of women through Self Help Groups.IFAD funded TamilNadu Womens Development Project came to a
close in 1999 but thousands of SHGs in scattered locations were in
need of continuous & easy access to credit.
SHGs were federated at the block level into Mutual Benefit Trusts.The legal status of the Federations is private mutual benefit trusts
which can have transactions only with its members.
The bye-laws of the Mutual Benefit Trusts were specially designed
to allow them to invest in Corporate entities & to borrow from F.I.s
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Evolution of the Federations There are gatherings of womens SHGs at the village and cluster
level but they do not play the role of financial intermediaries.
At the block level the SHGs are federated into MBTs. Each SHGhas to pay a one-time admission fee, fill an Entrance form and
execute the inter-se agreement to become a member of the
Federation. The SHGs constitute the General Body of the Trust.
Three of the Board of Trustees of the MBTs are filled up bynomination from the different project constituents of ASSEFA like
Dairy, Education, Health etc.; four by election from the SHGs in
the General Body; and two from the public by co-option.
The SHGs give their concurrence in the form of a resolution to theproposal to utilise the community resources (in the form of Project
grants, matching grants, etc.) to invest in the shares of corporate
entities. The savings of the members of the SHGs is not accessed
by the federations at any stage of the process.
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Evolution of the Federations (Contd.)
The Mutual Benefit Trusts acquired the shares in Sarvodaya Nano
Finance Limited by utilising the community resources meant for
the benefit of the SHGs.
The limitations of the MBTs in raising external borrowings were
understood and the need for a different entity to take on this
borrowing responsibility was felt.
The Community resources are used as seed money for leveraging
bigger loans.
Sarvodaya Nano Finance Limited takes on the responsibility for
raising loans from financial institutions to meet the credit needs ofthe women SHGs.
Sarvodaya Nano Finance Limited starts borrowing funds from
institutions like SIDBI.
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Structure of SHG Federation
Block Level Entity
Cluster level
(Non financial)
Shareholder in NBFC (Tax Paying entity)
Members of
General Body
of SMBT
Members
Self-Help Groups
Village level
Self-Help Groups
Cluster level
Members
Self-Help Groups
Village level
Self-Help Groups
Cluster level
Members
Self-Help Groups
Village level
Self-Help Groups
Cluster level
Sarvodaya Mutual Benefit Trust
(Private Mutual Benefit Trust)
Sarvodaya Nano Finance Limited
Non Banking Financial Company
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Organisation Chart of the Mutual Benefit Trust
He is also the Manager(Business Development)
of the NBFC in the block
Self-Help Groups
Field Officers
(30-40 SHGs)
Self-Help Groups
Field Officers
(30-40 SHGs)
Self-Help Groups
Field Officers
(30-40 SHGs)
Self-Help Groups
Field Officers
(30-40 SHGs)
CEO
(Appointment)
Chairperson
(Nomination)
Board of Trustees(Nomination, Election & Co-option)
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Nature of relationship between the NBFC & the MBTs The MBTs have a unique relationship with the NBFC as they are
the members in and borrowers from the NBFC.
The Company not only takes care of the credit needs but also themore important role of Capacity Building of the MBTs. Thesupport for the MBTs constitutes 80 % of the CB support budget.
The MBTs are independent legal entities with a Board of Trustees.Though the operational level matters at the trust level are handledindependently, the MBTs look up to the NBFC for support andguidance on policy matters.
But the lender-borrower relationship is on commercial basis and itis quite clear and unambiguous.
Loans are based on Loan Agreements, applications and thedecision of the Loan Committee.
Delayed payments are not condoned and they attract penal charges.
Monthly reports from the MBTs need to be sent without delay.
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Rationale
Poor women become members of Self Help Groups
Self Help Groups become members of Federations of SHGsi.e Mutual Benefit Trusts by paying a one-time admission
fee.
The federations have the legal status of Mutual Benefit
Trusts. The Mutual Benefit Trusts are members i.e. de-jure
shareholders of Sarvodaya Nano Finance Limited.
Only MBTs that are shareholders of the Company are
eligible for loans from the Company.
The quantum of loan will depend, inter-alia, the shareholding
of the trust in the Company and the Net Worth of the
Company as per the NBFC norms.
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Methodology
The SMBTs prepare the Business Plan for the respectivefederations and this is finalised in consultation with the
Company staff. The Business Plan includes details of thevillages covered, existing and planned SHGs, creditrequirements etc.
Sarvodaya Nano Finance Limited consolidates the Business
Plans of the trusts and prepares the overall Business Plan forthe Company.
Sarvodaya Nano Finance Limited borrows funds fromexternal sources.
Sarvodaya Nano Finance Limited enters into a LoanAgreement with the Mutual Benefit Trust.
Sarvodaya Nano Finance Limited lends to the Mutual BenefitTrusts in accordance with the Loan Agreement and a LoanApplication.
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Methodology (Contd.)
The Mutual Benefit Trust enters into a Loan Agreement with the
SHGs.
The SHGs apply for a loan under a specific product backed by a
resolution.
Then they lend to the Self Help Groups based on the Loan
Agreement, Loan Application and the results of the GradingExercise.
Utilisation Certificates confirm the appropriate usage of the loan
at the member level.
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Salient Features of Operations
Loan Committees at the MBT & the Company decide the
sanction and quantum of loan.
Grading of SHGs done by external staff, in a participatory
manner.
Independent Appraisal of Loan Applications.
Grades of the SHGs as well as their age, quantum of savings,rotation of savings etc. taken into account.
Uniform software for all the Trust Locations
All loan disbursements through cheques only.
All loan repayments are done only at the Trust Office; no cash
repayment to field staff is allowed.
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Salient Features of Operations (Contd.)
Savings of members of SHGs are not accessed by theFederations.
Standardised loan agreement and application forms.
Standardised documentation procedures for
transactions at all levels. The MBTs file their annual IT returns and also pay
taxes wherever due.
The surplus from the credit operations are utilised for
creating a Reserve in the MBT and the balance is
allocated among the member SHGs.
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About the NBFC
Sarvodaya Nano Finance Limited
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VISION
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`
To transform Sarvodaya Nano Finance Limited intoa truly community owned Micro-Finance Institution
that will instantly symbolize a fair, client - friendly,accessible, and transparent institution.
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MISSION
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To facilitate easy and timely access to credit and other financial services for the rural population
especially poor women and rural artisans through anetwork of Mutual Benefit Trusts located in their
vicinity.
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Management
Board of Directors
Shri Vijay Mahajan
Shri Deep Joshi Ms. Bharti Gupta Ramola
Shri S. Loganathan Shri S. Viswanatha Prasad
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Key Dates
Certificate of Incorporation : 1 July 1996
Certificate of commencement of Business:
10 October 1996
Registration as NBFC with RBI: 19 August 1999
Commencement of operations in TamilNadu :
13 July 2001
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Detailsof Coverage
No. of States : 1
No. of districts : 10
No. of Trusts : 27
No. of villages : 2812
No. of Self-Help Groups : 4065
No. of members in Self-Help Groups : 74601
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Staff Composition
Staff at Headquarters : 10
SNFL Staff in field locations : 20
Staff on field training : 6
Total : 37
Staff employed by the Trusts : 191
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Highlights of Performance 2002-03
No. of SMBTs Assisted - 20
No. of SHGs loans given - 2975 Loan Outstanding (31.03.03) - 970.14 lakhs
Loan Disbursed (2002-03) - 1833.67 lakhs
Profit Before Tax - 5.86 lakhs Operational Self Sufficiency 184 %
Financial Self Sufficiency 111 %
Operational Efficiency 10.1 % Operational Efficiency 4.79 %
(excluding MBT Expenses)
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Credit Operations
No. of Trusts assisted : 20
No. of SHGs assisted : 2975
No. of Individual borrowers : 34285
Rs.
Amount of Loan Issued : 1833.67 lakhs
Average Loan Size
(Per Individual Borrower) : 4601/-
Loan Demand : 1142.23 lakhs
Loan Repayments : 1136.83 lakhs
Loan Outstanding (Cumulative) : 970.14 lakhs
On-Time Repayment Rate : 99.53%
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Loans planned and released
202.
3
137.
9 17
5.
76
164
.24
17
7.
45
168.
40
1
87.
33
193.
70
192.
65
1
88.
05
227.
7
281.3
9
113.
94
126.
53
89.
07
195.
34
168.
82
193.
89
80.
75
142.4
3
76.
54
168.
05
162
.65
31
5.
67
0
50
100
150
200
250
300
350
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Rs.
inlakhs
Loans planned Loans released
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Savings and Internal Rotation
Savings and Internal Rotation
0
1000
2000
30004000
5000
Rs.
inlakhs
Savings Internal Rotation Interest earned
Savings 491.23 605.70 709.92 812.99 917.55
Internal Rotation 2517.34 2992.88 3138.71 3422.94 4000.31
Interest earned 251.99 279.15 284.19 304.34 315.51
April June Sep Dec Mar-03
Sh C i l
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Share Capital
68.8357.17
64.83
31.19
25.85
19.59
84.73
10.75
14.42
14.06
11.58
2.81
6.00
23.68
8.30
1.10
14.18
18.90
0.66
12.22
0.5
50.00
gingee
Rishivandayam
sankarapuram
kallakurich
chinnasalem
thyagaduragam
vriddachalam
achirapakkam
vandavasi
anakkavur
vembakkam
sivagangai
alangudi
narikudi
nilakottai
tirumangalam
viralimalai
vadugapatti
individual
kalligud
natham
Virudunagar
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Share Capital & Loan Outstanding
462.22
4
806
.95
420.16
470.98
1365
73
3.38
482.79
1665
72
8.82
543.73
2311.08
9
70.14
0
500
1000
1500
2000
2500
Rs. in lakhs
ASON
30-06-02
ASON
30-09-02
ASON
31-12-02
ASON
31.03.03
Share Capital and Loan O/S
SHARE CAPITAL LOANS DISBURSED LOANS OUTSTANDING
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Repayment Performance
2311.0
8
1142.2
3
1136
.83
99
.53%
0
500
1000
1500
2000
2500
Rs.
inlakhs
Loans
sanctioned
Demand Collection OTRR
H th d th C dit
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How they used the Credit
House Repairs
2%
Manufacturing
36%
Animal Husbandry
5%
Micro Enterprise
21%Family Functions
18%
Manufacturing
36%Clearing old loans
5%
Education
2%
Medical
3%
Agricuture
3%
B i Pl f 2003 04
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Business Plan for 2003-04
A. Trusts to be assisted : 30
S.H.Gs to be assisted : 4500 Individual Borrowers : 58,520
Rs.
B. Share Capital : 100 m
Borrowings (Cumulative) : 146 m
C. Disbursement : 327.82 m
Average Loan Size : 5601 D. Year end Outstanding : 206.25 m
E. Total Income : 21.69 m
Operational & Other Costs : 19.11 m
F. Profit : 2.59 m
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Projections for 2003-04
No. of SMBTs to be assisted 30
Paid up Equity Share Capital -- 720 lakhs
No. of SHGs to be assisted -- 4500
No. of borrowers to be assisted 58520
Total Loans to be disbursed -- 3278.23 lakhs
Average loan size per group -- 72850
Average loan size per member -- 5602
External Borrowing (2003-04) -- 930 lakhs
Cumulative External Borrowing -- 1503.90 lakhs