Social Impact Assessment of Microfinance Programmes - weman

programme has since expanded to Multan and Lahore. It should be mentioned here that
although NRSP through UPAP is running a separate urban credit programme, the NRSP
MEDP continues to operate in certain peri-urban areas in its programme regions.
UPAP establishes low cost settlement offices and disburses credit to women using the
‘solidarity group’ method. Three or more women can form a group. The credit facility
can be used for family enterprises. Men can also use the facility but they must be family
members whose income comes into the hands of the borrowers. This strategy has saved
UPAP from major incidents of fraud or default. Alongside the solidarity group approach,
UPAP also adopted the individual approach on the pattern of the Orangi Charitable Trust,
to cater to the needs of small-scale entrepreneurs and manufacturers who do not live in
areas where there is a UPAP settlement office.
For expansion purposes UPAP has found the solidarity group approach more successful.
The experience of UPAP teams is quite diverse in terms of its borrowers. They learned
that borrowers could be either trustworthy or untrustworthy according to circumstances
and not as a rule. Thus, UPAP believes any credit disbursement strategy is likely to
succeed which ensures effective supervision and pursuance of borrowers. This can be
done through regular monitoring and by developing a relationship of respect with the
community. The recovery rate of UPAP reflects the effectiveness of this approach.
Objectives
• To improve the quality of life of disadvantaged and low income people;
• To develop an indigenous model of poverty alleviation in the urban areas of
Pakistan;
• To provide the urban poor, focusing on women but not excluding men, with
access to credit;
• To alleviate poverty of low-income households by organizing women,
encouraging them to save;
• Increasing their access to resources through credit;
• To create income generating self-employment opportunities for women;
• To explore the possibility of establishing a specialized bank based on the
experience of the pilot project.
Credit Disbursement Approaches
Solidarity Group:
Three or more like-minded women with comparable social and economic conditions form
a group. Once a group is formed it meets weekly. During the meeting, each group
member saves some amount, through cutting her expenditures equivalent to the weekly
recovery instalment of the credit amount that she intends to borrow. After five weeks, the
weekly saving amount is given to one of the members through a draw. Thereafter this
process continues again. Four weeks after group formation, credit is disbursed to one of
the women. After the group has ensured that this woman has utilized the credit properly
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