Social Impact Assessment of Microfinance Programmes - weman

since she was distributing her time for his care as well. The first loan of Rs. 3,000 was
sought to buy candle-making machines so that she could produce more candles in less
time. The experiment was successful and now in her fifth round of loans, she has 11
machines, and distribution has increased tremendously covering Shahdadpur and
Sanghar both.
• Another participant stated that his family was in an extremely desperate condition as
their crops were destroyed during the torrential rains. They were only left with one
buffalo which was the only source of income for the family of 11 people. He found
out about SAFWCO’s programme through the community organization and was
encouraged to apply for a loan. He used it for buying a goat which brought some
stability in the family. Loans were paid off through savings and another application
was filed for buying seeds so they could prepare for the next crop. After a gap of two
years, he applied for a bigger loan to buy another buffalo so the income from selling
milk could be increased further.
• In case of urban clients, both males and females, another strong reason for applying
for a loan is the raising inflation rate which continues to shrink their income and bring
business to a static position. Many participants stated that their home budgets keep
increasing because of family needs, health and educational expenses, and they do not
have much left to invest in the business. Therefore, the loan money is directly
invested in business so it could lead to greater profit margins.
Loan Repayments and Social Collateral
• Participants unanimously agreed on the need to make payments on time as their
probability to get bigger loans approved, increases. The strategies used for paying
instalments varied again from individual to individual. Some people did not invest all
amounts together, saving enough to pay off the first three instalments. That freed
them from the worry at least in the initial payments. Once the business picks up,
instalments were seen as utility bills and so were included in budgeting. Others
mentioned that they put aside some money from their daily income so paying Rs.500
or 1000 doesn’t emerge as an issue at the end of the month.
• Many women clients stated that ‘any delays or defaults in loan repayments is
unthinkable’ because they would not want to deceive someone who has done them a
huge favour. They felt that when they were in absolute need of help and support,
SAFWCO took them out of the crises, so it was unethical of them not to repay.
• Clients showed their satisfaction with SAFWCO’s policies for social collateral and
the loan process. Since a group of 3-6 members are needed for each loan application,
there were clients who are part of more than one group. When asked how they would
pay up if the main client defaulted, almost 75 percent of the participants asserted that
such a situation will not arise. The strong belief emanates from the close-knit nature
of business community as well as of rural life. They mentioned that it is basically a
web of trust and interdependence which every member respects. Moreover, there is
the belief that the social and economic gains are much higher if one follows the core
principles rather than violates them.
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