Social Impact Assessment of Microfinance Programmes - weman

7.1.7 Application of the new Model
Currently, the new model is operating in the Hyderabad, Badin, Mardan, Malakand and
Rawalpindi Regions. Present reports show the following outcomes:
• The entire staff has become more focussed on doing the assigned work in a
planned manner;
• The credit staff is implementing all credit activities systematically;
• The social organization process has accelerated;
• The SOs do not feel overworked despite forming a larger number of COs;
• Disbursements have increased considerably;
• Repayments have improved significantly and all new loans are showing 100%
recovery.
It is important to note that the changes are in the management structure only: the
principles and the structure of the credit programme remain the same. For example, the
service charge, repayment schedules and credit ceilings are the same. Credit only goes to
individuals, as is the case in the existing programme. The CO still initiates the request for
credit and its members benefit from it. The concept of social pressure through group
formation still prevails, because the credit is given on the recommendation of the CO,
which also undertakes the responsibility for repayment.
7.1.8 Appraisal Process
The appraisal process focuses on assessing the character and trustworthiness of the
intended clients. Previously, NRSP’s appraisal process focused primarily on the financial
feasibility of the proposed activity plus the COs guarantee. However, the Organization
has learned from experience that the character of the client pays a greater role in his or
her repayment performance than his or her ability to generate a profit from the business
or activity for which the loan is taken. The character assessment or social appraisal
includes whether the client is ‘honest’ and ‘responsible’ as well as confirmation of his or
her whereabouts for which copies of National Identity Cards and client photographs are
obtained and a complete record is maintained at the village and district offices.
Two independent appraisals are conducted. The field Worker collects the CO Resolution
for rural credit in the CO meeting and then carries out an appraisal at the home of the
intended client. This is called the Social Appraisal because it confirms the whereabouts of
the client and on his or her character. While the second appraisal, referred to as a
Technical Appraisal, is done by the Credit Officer confirming the accuracy of all the
information collected by the Field Worker during the Social Appraisal. The Credit
Officer also checks the financial viability of the proposed activity, with assistance from
the Engineer or other specialists such as the enterprise development staff if required. This
double appraisal at the household level helps the NRSP staff to know the borrower and
also involve the family members in the process. The Field Worker is not authorized to
reject a credit application on his/her own. The decision lies with the Senior Credit
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