Social Impact Assessment of Microfinance Programmes - weman

and economic change in their surroundings. This group was then known as Samaj
Sudhar Adabi Idara and undertook small scale social work like arranging for
medical and health camps and distributing books amongst poor students.
• Long and intensive reflections led to the establishment of the Sindh Agricultural
and Forestry Workers Coordinating Organization (SAFWCO) in 1990. Registered
under the Societies Registration Act XXI of 1860, SAFWCO kept rural
development as its key priority. As a result, it started addressing cross-cutting
issues including conditions of peasants and rural women, education, the role of
feudal lords, the political situation in the area, unemployment, water logging and
salinity, low wages and housing.
• Starting from Rs. 5,000 for goat-rearing and home-based poultry, SAFWCO
initiated its microcredit programme in 1993-94. The expansion of the portfolio
and credit line has been gradual and firmly grounded in the contextual needs of
the communities SAFWCO is catering to. SAFWCO’s concept of microcredit is
the extension of small loans to entrepreneurs too poor to qualify for traditional
bank loans. It also ensured a more integrated approach towards meeting
organizational mission and targets.
• SAFWCO articulates its principles and policies for microcredit as: affordable
services for low-income groups; greater outreach to the general public; minimal
risks for new entrepreneurs; loan pay back systems are nurturing towards small
businesses; increased and easily accessible opportunities for the economically
disenfranchised groups to support them in gaining economic power.
• SAFWCO provides both group and individual loans. Loans are made to
established groups of both men and women, comprised of three to six individuals,
that have been operating for over a year. For credit and saving activities, villages
are identified on the basis of their socio-economic situation. For the savings
programme, monthly meetings are conducted to collect savings, with a minimum
voluntary contribution of Rs.20. The programme is operated through COs, which
collect deposits, and manage the savings records and passbooks. Communities are
also encouraged to utilise their savings through their village development
organisation as internal lending.
• The socio-economic status, soundness of business proposal and social collateral
are the most important criteria for selecting individuals and groups for loans.
Loan delinquencies of over one month can result in the disqualification of an
entire village for further loans. This ban is lifted only when all arrears are cleared
either by the individual or the group of guarantors. According to the management,
the loan recovery rate averages 95 percent for men and 99 percent for women. An
operational reason for encouraging women clients is also because they not only
ensure that instalments are paid on time, but also take responsibility for
appropriate and effective utilization of the credit. Consequently, SAFWCO has
brought flexibility in its lending strategy where credit is given to female units
which can involve other family members in its use.
• The average retention rate is 60 percent with variations across districts and
communities. Of the 40 percent that drop-out, SAFWCO’s management reports,
that these do not qualify as drop-outs because they return after a gap of 12-18
months.
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