Social Impact Assessment of Microfinance Programmes - weman

to consider young unmarried clients as well as older ones who are in good health.
However, most of the borrowers seem to be between the ages of 35 to 55 years, who are
members of Village Community Organizations and familiar with the working of NRSP.
The majority of the participants in all four groups were second or third time borrowers.
According to the group participants, the very poor in their communities were unable to
borrow even under such schemes as NRSP as they could not afford to pay back the loan
instalments and did not possess any assets, which could be used in case of an emergency.
The communities conceded, which was also endorsed by some of the programme staff,
that the poorer households were generally not included as CO members, specifically in
the credit schemes due to the social collateral approach, as other members were not
ready to take the risk in case of a drop-out or defaulter client. Similar feedback was
given in the context of Group Loans for the poor.
NRSP conducts participatory poverty assessments in each community they work in, but
ironically, this inability of actually providing services to the real poor seems to be the
most prominent weakness of the NRSP credit programme.
A rapid comparison of average household incomes of the group participants suggests that
there has been a positive impact of the loan. Borrowers, males or females, usually used
the borrowed amount to strengthen an existing income source. For example, Ghulam
Mohammad was earning Rs. 1,500 to 2,000 per month through his donkey. After he
joined the NRSP CO, the CO president told him to start saving so that he becomes
eligible for a loan through the CO. Once he got the credit of Rs. 10,000, he started a
vegetable cart and now earns Rs. 3,000 to 4,000 per month.
A worthwhile point in case of NRSP clients is that being an integrated rural development
programme, NRSP is not only focused towards credit, but its CO members are also
involved in other community development activities This results in a stronger sense of
cohesiveness and ownership amongst the members, who feel that although the credit
scheme is a major incentive but it is not the only benefit of being a part of NRSP.
Formal financial transactions are quite rare among the rural communities in Pakistan.
NRSP programme areas are no exception. People mostly depended on informal means for
fulfilling their financial requirements and in case of emergencies borrow from relatives
and neighbours.
Female participants were aware of local moneylenders, but had never utilized any such
services. While male groups members were more familiar with the concept, they did not
approve of it and termed it as a highly exploitative means of extracting money from those
in need. According to the men, the money borrowed from a local moneylender could
seldom be repaid due to the high interest rates and for years people kept paying the
interest rates rather than the actual amount borrowed. Therefore, people only went to a
moneylender in case of a very urgent need.
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