Social Impact Assessment of Microfinance Programmes - weman

part of the credit programme is also through NRSP endowment fund provided by the
Government of Pakistan.
These services include:
Micro Credit - individuals through groups and Village Banking
Micro Insurance - hospitalization and accidental death
Savings - COs keep their savings in commercial banks or they invest these in
Community Physical Infrastructure.
Micro-credit is a major component of NRSP focusing on improving livelihoods. It is
reported to be the largest credit programme in the country after the Agriculture
Development Bank, having so far disbursed Rs. 7 billion in loans since 1995. Loans are
provided to both men and women for entrepreneurial business projects or for other
income generating activities, such as small businesses or investment in livestock.
The credit process begins with an initial instalment of Rs.10,000, followed by further
instalments of Rs. 5,000. The interest rate is 10-11 percent over the 12 months credit
cycle. However, after the inclusion of the processing fees, the rate rises to 21 percent.
The recovery rate is claimed to be almost 100 percent.
7.1.6.2 Savings
Each Community Organization is encouraged to collect some amount from its members
and put these savings in a Bank account. During the year 2004-05, the CO members
saved a total of Rs. 71.91 million. Of this amount, men’s COs saved Rs. 63.81 million
and women’s COs saved Rs. 8.10 million. However, there is no hard and fast rule
regarding the savings mechanism. Some COs keep their savings with the CO leader, who
disburses them according to the need of the group. A few COs also have a ‘committee’
system, whereby, savings are rotated among the members similar to a committee system.
7.1.6.3 Loan Disbursement Methodology
NRSP provides credits to the members of the COs and the credit groups through a
solidarity group approach. Although, NRSP does not have a preconceived package, credit
is given for any income generating purpose. Other than this purpose the credit is not
targeted for any other utilization. According to NRSP, this encourages the COs to utilize
natural resources and human capital.
Unlike many other microcredit programmes, the NRSP credit programme gives loans to
both men and women. The programme feels that the ratio of men and women clients
actually reflects community demands and behaviours. According to the programme
figures for 2004-05, Rs. 1,552,335,800 was disbursed, of which 83 percent was loaned
out to men and 17 percent to women. Furthermore, as the programme purpose is to focus
on improving the household livelihood conditions, the gender of the borrower is not a
major determinant. Most of the loans taken by the women are actually utilized for male
family member’s income generation activities.
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