| Community Banking |
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| Supported by Friends of MSSRF, Tokyo |
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| The National Network on Bio-villages and Community
Banking was launched in order to link micro-enterprises to micro-credit.
The main aim of this programme is to improve the socio-economic
conditions of the rural poor by enhancing their income- generating
potential through the financial support given to them. |
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| The members of Friends of MSSRF, Tokyo, have
contributed generously to form micro-credit banks for the rural
poor and to link them with micro-enterprises. Micro-credit is
given to a small and homogeneous group of men/women having a similar
socio-economic background called Self-Help Groups (SHGs), These
groups are democratic and fully participative. Extending of micro-credits
is an empowerment process in which a community gains confidence
and initiates economic activities. |
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| Self-Help Groups and Community Banking |
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| Production by people for commercial success
and sustainability requires support from organizational and management
structures that can confer on small-scale producers the powers
of production and marketing. This is best achieved through SHGs
based either on a single activity or several activities. For any
such activity, finance is the key factor. When this need is met
by micro-crediting, people gain confidence; this helps the members
develop various skills such as banking, budgeting, business planning,
marketing, and production. This financial support to the group/community
is known as Community Banking. |
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| The advantages of Community Banking
are: |
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- Need-based credit
- Timely and effective support
- Low transaction cost
- User-controlled revolving fund
- High repayment record
- Credit accompanied by appropriate services
|
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| MSSRF extends micro-credit mainly for market-driven
micro-enterprises through a process of mobilization, organization,
technology incubation and capacity building. The micro-credit
is given as interest-free loan by entering into a legal agreement
with the group. Repayment period is based on the nature and gestation
period of the project. The group repays the loan from the income
generated by the economic activity started by them. |
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| 76 micro-enterprises were started with the
support of the Friends of MSSRF. The following activities have
been taken up by the SHGs with the help of micro-credit system. |
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| Bio-pesticide |
Turkey rearing |
| Mushroom cultivation |
Poultry |
| Boards/paper from banana waste |
Coir-rope making |
| Hybrid seed production |
Minor millet & rice mills |
| Fodder cultivation |
Dhal (pulse) mill |
| Calf rearing |
Handicrafts |
| Goat rearing |
vegetable cultivation |
| Dairy |
Pig rearing |
|
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| Micro-credit |
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| A study of these enterprises revealed the
potential of the SHGs and micro-enterprises in empowering poor
village women and creating for them several means of livelihood.
Micro-enterprises fall within the framework of Ecopreneurship.
Ecopreneurship refers to the technical, managerial and marketing
capacities of villagers to organize themselves and produce goods
for sustainable development. It promotes thrift and establishes
a strong network with banks and other government agencies. A Federation
of SHGs has emerged from these efforts. Micro-enterprises start
with mobilization of villagers, followed by group formation, capacity
building and monitoring of the activities of the group. Micro-enterprises
are started based on the following considerations: |
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- Environment friendliness
- Cost-effectiveness
- Economic viability
- More job opportunities
- Empowering of women
|
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| From the generous endowments made by the Friends
of MSSRF, Tokyo, the amount needed for starting a project is given
as interest-free loan. MSSRF's experience in promoting micro-enterprises
through micro-credit is encouraging, and it can be used as an
effective tool for fighting poverty and empowering women in villages.
|
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| Many of SHGs have completely repaid the loan
from the income generated through the micro enterprises started
by them. They have become Sustaining Self Help Group and act as
a 'model' for other Groups. |