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Social mobilisation and empowerment of women
AP Model for comprehensive poverty eradication
Vision:every poor family out of poverty
improved status in society comprehensive food security – freedom from hunger income - minimum of Rs.5000/- per month, from 3 - 4 stable
livelihoods (agriculture, allied,etc) house-hold expenditure controlled Comprehensive risk management good shelter good health and quality education
Holistic model – covers all dimensions –
economic and social
Inclusion - 90% of rural poor in S.H.Gs Special focus on ultra poor and vulnerable Gender balance – intra family equity Micro finance Food Security Health & Nutrition Agri - Marketing Non-Pesticidal Management of Agriculture Dairy Jobs Insurance
A.P Federation Model
SHGs SHGs SHGsSHGs SHGs
V.O150 -200
MMS4000 6000 -
Z S200,000400,000
Outreach
– S.H.Gs in all villages of AP– More than 90% of rural poor organised– 87.5 lakhs rural women organised into 7.0
lakh S.H.Gs (upto March 2007)– (35% of all S.H.Gs in India country are in
A.P)– 33,747 VOs, 1083 MSs and 22 Z.Ss formed– Universal coverage of all poor
recent intervention for addressing the ‘high cost’
debt of the poor
Total financial inclusion
Objectives
To address all the needs of the poor-deepen the credit inflow
To transform money lender – dependent rural poor into bankable community
To eliminate high-cost interest regime form the lives of poor
To arrest the resource drain from the poor To build up diversified & multiple livelihoods of
the poor
SHG-Bank Linkage in AP
197454
7541017
2001
3063
6500
9000
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Expenditure Portfolio of the Poor
FoodHealth problems – minor/majorEducation Interest outflowWorking capital - farm/non-farmAssets – land, cattle, non-farmHousing – construction, repairsLife cycle ceremonies
Indebtedness of the poor
Each asset-less rural poor family at present needs Rs.40,000 credit
The bank finance accessed by the poor family, at present is 10,000 – gap: 30,000
Gap at State level: Rs.25,000 crores Debt from informal sources: 15000 crs Interest payments to informal sources : Rs.
5000 crores per annum
The impact of ‘high cost’ debt on a poor family
Per capita annual debt servicing burden: Rs.6000 10 – 40% of income for servicing ‘high cost’ debt This burden is ‘neutralizing’ all poverty eradication
efforts aimed at income generation
Priority: to address ‘high’ cost debt
Cost of servicing loans from money lenders/MFIs - per S.H.G
Avg. Loan per
S.H.G
Rate of interest
Monthly
interest paid
Interest per
annum
SHGs per
district (avg)
Total annual interest
1,50,000 36 4,800 57,600 32,000184
crores
Bank linkage per district 2006-07: 150 crores
Annual interest paid by all SHGs : 184 crores
T.F.I Process
Effective utilisation of the S.H.G network Facilitate each SHG to identify all the
financial needs of each member’s family Development of ‘Micro-Credit Plan’ by the
group itself Participation of Bank Manager in the process
of development of MCP by the group
T.F.I Process
Role of S.E.R.P Pro active role of SLBC Involvement of all banks Adoption of Micro credit planning process as the basis for
bank linkage, and, not multiples of savings CRP strategy Continuous nurturing of S.H.Gs by the S.H.G federations
and D.R.D.As ‘Pavala vaddi’ Continuous monitoring of recoveries
Micro Credit Plan
Micro Credit Plan components:- Debt swapping- the loans taken by
the poor from money lenders at high rate of interest
- financial requirement for assets acquisition and working capital
- financial requirement for social needs – food security, health, education etc.,
Micro Credit PlanName of the SHG Bank Account no. Bank-branch name:
VO Name Village Name: Mandal Name:
Sl no
Name of the
member
Social Staus (SC/ST/BC/OC)
Eco Status
(POP/Poor/NP)
To liquidate high cost debts IGA Social needs
Grand Total
Money Lender
sMFI
Others
Total
UnitInvestmen
tTotal Need
Required
amountTotal
TOTAL
TFI Plan total: Signatures of SHG reps:
Outstanding bank-linkage: 1
Grand Total: 2
T.F.I Achievement
Implemented in 304 villages with 183 crores in 2006-07
In 07-08, it is planned in 5000 villages with Rs.4,000 crores to cover 10,00,000 families
Quantum of finance ranges from 80 lakhs to 1crore 50 lakhs to each village
Per group finance: quantum jump from 83,600 to 450,000
Bank – Linkage amount taken under T.F.Iin Maharajpeta (V) Consisting of Maharajpet, Gopuralam & Dontanapalli Hamplets of Rangareddy Dist
28.52 Lakhs
98.15 Lakhs
12.86 Lakhs
56.77 Lakhs
0
20
40
60
80
100
120
Debt Swapping income generation activities Social needs Total
No. of SHG’s : 25No. of Members : 264
Loan Amount Taken Under TFI in Gopularam H/o Maharajpet (V) of Rangareddy District
22.06 Lakhs
7.99 Lakhs
44.41 Lakhs
14.5 Lakhs
0
5
10
15
20
25
30
35
40
45
50
For Debt Swapping For income generationactivities
For Social needs Total
No. of SHG’s : 11No. of Members : 96Social Category : SC
1.33 Lakhs
5.33 Lakhs
0
1
2
3
4
5
6
7
Interest amount paid by poor families in the village as onTFI
After TFI
Relief in interest burden per annumin Gopularam H/o Maharajpet(V) of Rangareddy District
No. of SHG’s : 11No. of Members : 96Social Category : SC
Building up of Assets of the poor in T.F.I. Village : Gopularam
No. of SHG’s : 11No. of Members : 96Social Category : SC
35
0 04
42.7
9
96
6 5
21
52.5
22.5
0
20
40
60
80
100
120
Milch Animals Auto Rickshaws Bore wells for irrigation Small Business Land holding(in acres) Land taken on lease
Before T.F.I
After T.F.I
75.48 Lakhs
16.75 Lakhs
28.51 %
58.73 Lakhs
0
10
20
30
40
50
60
70
80
Before TFI After TFI Difference % of change
Increase in Annual Income of the poorin Gopularam H/o Maharajpet (V) of Rangareddy District
No. of SHG’s : 11No. of Members : 96Social Category : SC
EFFECTIVE IMPACT OF TOTAL FINANCIAL INCLUSION ON THE POOR IN GOPULARAM h/o MAHARAJ PET (V)
16.83
44.41
5.331.33
58.73
75.48
9.08
1.76
0
10
20
30
40
50
60
70
80
Rs. in Lakhs
Money Lenders 16.83 5.33 58.73 9.08
Bankers 44.41 1.33 75.48 1.76
Debt Interest amount Annual Incomeas % of annual
income
After TFI
Before TFI
10003000
3000800045008000 9500
0
40000
70000
0
10000
2000030000
40000
5000060000
70000
1stlinkage
2ndlinkage
3rdlinkage
4thlinkage
TFI
The impact of TFI vis-a-vis SHG-Bank LinkageName : Mrs.Ananthamma,Medak Dist.
10000 2000 0 40008000
25000
0
46000
123620
0
20000
4000060000
80000
100000120000
140000
1stlinkage
2ndlinkage
3rdlinkage
4thlinkage
TFI
The impact of TFI vis-a-vis SHG-Bank LinkageName : Mrs.Satyavathi,Khammam
15000
5000
1000010000
0
50000 34524
0
10000
20000
30000
40000
50000
1stlinkage
2ndlinkage
3rdlinkage
4thlinkage
TFI
The impact of TFI vis-a-vis SHG-Bank LinkageName : Mrs.Krishna Veni, VSP Dist.
7300 1373023060
37720
57040
7837089700
103830
0
20000
40000
60000
80000
100000
120000
2004-05 to2006-
07
2007-08
2008-09
2009-10
2010-2011
2011-2012
2012-2013
2013-2014
Action Plan under TFI in next six years
Impact on the bank branch
Participation of bank manager in the process Increase in the access by the poor to the
bank 100% recovery in new-intervention villages Increase in the profitability of the bank- 100%
increase in rural branches
Impact on the poor
Huge mental relief in switching over from money lender to the bank
Reduction in interest payments in each family Increase in asset base of the family Unleashing of entrepreneurial spirit of the poor Increase in health conditions of the poor-as it results
in improvement in food in-take by the poor Improvement in children’s education and higher
education in poor families
Sustainability of the Model
Enhanced savings by individuals, in S.H.Gs and in V.Os Social Security:
- RD for the children of members- Life, health and asset insurance
Reduction in expenditures:- Food Security- NPM- Micro Irrigation
Intervention in value chains of ‘key livelihoods’ of the poor
