Social Impact Assessment of Microfinance Programmes - weman

problem of group lending is that meetings are weekly and if the recovery is not 100
percent then the whole group has to wait till the recovery is completed.
Akhuwat’s Group lending programme only focused on women who were organized in
Self Help Groups (SHGs) of 10 members each and thus relied on social collateral. In each
group a president and a manager were elected through consensus and the group
collectively had to save Rs.3,000 before it could become eligible for receiving loans.
After that, group members would receive loans by turn and as the responsibility of the
repayment fell on the whole group, it was prompt. The loan has no interest on it, but Dr.
Saqib feels that some of the cost of the credit has to be transferred to the clients or they
would not value the loan and it will be like a free meal. So, five percent of the loan is
charged as a membership fee and this makes the process professional and not charity as
people demand better services when they pay the fee.
In group lending, meetings are fortnightly, which allows for frequent interaction between
group members and Akhuwat staff. At the meetings, routine collection of loan
instalments and savings takes place as well as discussion of grievances and problems of
group members. The outcome of these latter discussions have been very constructive as
Akhuwat arranged for a tutor to coach community children during one summer and has
set up several health camps.
Figure 5.2
Disbursements
Millions
35
30
25
20
15
10
5
0
30.2
12.8
7.8
5.1
0.8 1.2 0.2
2.4 2.6
2002 2003 2004 2005 2006
Year
Group Loans
Individual Loans
5.1.3.2 Individual Loans
Akhuwat has a large portfolio of individual lending with a total of 14,711 beneficiaries
and it has devised a rigorous appraisal method to ensure maximum recovery. In 2005,
individual loan disbursements grew by almost 390 percent and in 2006 they grew by 135
percent as can be seen in Figure 5.2. A prominent feature of individual loans is that they
are marketed through mosques and the disbursement of the loans also takes place in
mosques. Each branch is associated with a particular mosque and is located within or just
outside the mosque’s premises. An introduction to the programme is given after prayers
when people have congregated there. According to Dr. Saqib, the decision was deliberate
as he states, ‘for far too long, we limited the use of mosques to just prayers. In between,
they are desolate. With our offices in mosques, we have saved tremendously on
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