Social Impact Assessment of Microfinance Programmes - weman

Officer. If the Field Worker and Credit Officer disagree, the Senior Credit Officer makes
the decision, after hearing both opinions.
Disbursement of amount is done within 7 to 8 days of approval, for which the individual
borrower visits the local Habib Bank Branch for direct collection of cash through a check
issued on her or his name.
Collateral
NRSP extends micro credit to economically marginal men and women who have no
material collateral. The COs, however, exert social pressure in case of loan default.
Because each loan request is signed by at least 75% of the CO members, each member
acts as a guarantor for all other members. To facilitate the COs and their members in the
repayment of their loans in difficult times, NRSP encourages the COs to practice regular
savings before requesting a loan. However, to ensure that this does not discourage the
poorest CO members, the ceilings for mandatory savings are flexible.
Saving and Internal Lending
The habit of saving is a prerequisite for CO membership, as is regular attendance in the
fortnightly meetings. Once the members’ savings (which are deposited in a bank account
in the name of the CO) reach a substantial amount the process of internal lending begins
with the unanimous will of the CO. The CO then forms a credit committee, which
appraises the loan requests. The CO extends credit to its members from its saving pool on
its own terms and conditions. NRSP trains the COs in accounting and financial
management.
Enterprise Development
NRSP facilitates the COs in developing new enterprises and improving existing ones
through its Vocational Training Programme (VTP) and Natural Resource Management
Programme. As part of the VTP, the CO members are trained in business development
and financial management.
7.1.9 Principles of Recovery Monitoring and Dropouts
Recovery monitoring is given a lot of importance in the new system. It requires daily
recovery planning with preparation of daily recovery targets based on the due date of
each instalment. In the new model, the Senior Credit Officer’s primary duty is to develop
daily monitoring reports and to ensure that a client who does not pay his or her
instalments on time is reminded of the obligation to repay. It is the responsibility of the
Senior Credit Officer to focus on finding ways and means of ensuring timely recovery.
According to the NRSP micro-finance programme team, NRSP does not have a very
stringent approach towards recovery and depend more on the social collateral through the
COs and loan groups (3 individuals per group). To-date, the programme has not
encountered any major defaulters.
In addition, the loan officers at the village level have certain district targets which if
achieved are a major source of incentives in form of bonuses added into their salaries.
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