Social Impact Assessment of Microfinance Programmes - weman

social conditions. Consequently, it has not engaged in identifying the poorest of
the poor or empowering women, for instance, to bring about gender equity.
• OCT does not envisage any major expansion in its direct operations, geographical
reach or client base. It works with a carefully selected and focused client base
within Orangi, with just a single office located in the building of OPP-RTI. The
total loan disbursed in Orangi between 1987- August 2006 amounts to Rs.
157,760,184 to 9,508 units. Out of these, as many as 7,301 units are closed and
2,207 units are open, which reflects on OCT’s resolve to keep its client base small
and manageable.
• This portfolio is balanced by replication of its microcredit programme by
supporting NGOs/CBOs, where institutionalization becomes the core focus rather
than operational expansion. OCT is working with 47 NGOs/CBOs where a total
of Rs. 286,600,604 has been disbursed to 25,606 units till August 2006. Out of
this 13,926 units are closed while 11,680 are open in 433 areas and villages.
• OPP-OCT is providing microcredit to existing micro enterprises at bank rate of
interest without collateral ranging from Rs. 2,000 to 50,000 with simple
procedures and documentation. There are eight different types of products that are
offered by OCT to its Orangi and non-Orangi clients. Loans to Schools; Loans to
Manufactures; Loan to Traders; Loan to Service Providers; Loan to upgrade
Thallas; Loans to Farmers and Fisher folk; Loan to Clinics; and Loan for
Livestock.
• The recovery rates have not always been stable and positive. For instance, in the
first year 35 percent of clients defaulted causing 20 percent of amount loss.
Gradually, the trust in borrowers began to pay off and, indeed, clients followed
the principles of fair business deals. According to OCT’s data, the recovery rate
has improved tremendously over the years with the current rate at 97 percent.
• OCT has aimed to reach sustainability since its inception and for this purpose, the
mark-up rates were kept equivalent to bank rates and operational expenses were
consciously kept low.
• OCT is the only MFI in our sample which is a largely male client oriented. It also
has other characteristics which are dissimilar to other MFIs, particularly that it is
not in the business of poverty alleviation, as most other MFIs claim. Hence, its
criteria and standards are different as well.
• Most of OCT’s clients are in the Business Retail Shop profession, and many of
the Non-Borrowers move from the category of Technical Service Provider and
Personal Community Service Provider to those who own Businesses or set-up
some sort of Cottage Industry. This suggests that credit is a constraint to
entrepreneurs who, once they receive the loan, may want to set up different sorts
of economic enterprises since their credit-constraint may have been released.
• Borrowers’ perceptions about the positive Effect on the Quality of Life are high
as soon as the first loan is given and continue to rise thereafter. This trend is
found in most other indicators about perception as well, and most Borrowers
believe that the rise in Income and the improvement of Quality of Life can be
sustained over time. We found that OPP clients, who had been borrowing for 3
year or more, were spending more on food expenditure.
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