| 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. |
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