Case Study Status Report on Gram Nidhi - APFED

Institutional Setting
The actors of this programme are a leading implementation organisation, the Centre for
Environment Education (CEE), the institution at village level, Paryavaran Vikas Mandals (PVMs)
and target villages. The Centre for Environment Education was established in 1984, supported by
the Ministry of Environment and Forests of the Indian government. The centre aims to improve
public awareness and understanding of the environment through developing education material and
programmes, as well as to create overall environment and development strategy for India, pursuing
a better environment and a better quality of life. With this background of the establishment of the
CEE, the strong and deep involvements of CEE staff in the target- village contribute to the success
the implementation of the programme.
The institutional setting is a primary factor for the substantial success of the project. Before starting
the Gram Nidhi, CEE has been working since 1988 in the fields for eco-development programmes,
and started assisting in the formation of the Self Help Groups (SHGs) in 1996. Since then, there
have been many programmes implemented in the village and Self Help Group have been set up
already in the villages. The SHGs are formal groups established by the community people, usually
consisting of 15-20 persons. The purpose of the formation of SHGs is that even poor people need
access to social and economic interaction when they face an emergency situation. With this
background for the formation of SHGS and environment, Gram Nidhi project has been
implemented.
The mechanism of the Gram Nidhi project shows in Figure 1. The major stakeholders of this project
are Paryavaran Vikas Mandal (PVMs) and NARMADA Trust and entrepreneurs. First, the CEE
formed the PVMs as an informal group, consisting of mainly youth. The PVM, a legal institution at
the village level under Bombay Trust Act (1950), is translated as Natural Resources Management
Development Group, consisting of women and young people to commit to the programme. The CEE
facilitates these PVMs to foster youths and women to participate in the initiative for environmentally
- friendly activities. The 450 members of PVMS for the Hingolgadh Nature Education Sanctuary in
Rajikot district are currently engaging in institutional activities (CEE, 2008). The willingness for
voluntary works for environment and development at the village is a criterion for becoming the
member of PVMs.
The CEE set up the Eco-Enterprise Investment committee (EIC) which consists of the
representative of PVMs, NARMADA TRUST, CEE, local government officials, financial institutions,
NGOs and experts. Eco Enterprise Investment Committee (EIC) will conduct the screening based
on the criteria.
The Gram Nidhi project supports access to reasonable credit and low interest. The villagers first
have to become a member of SHGs to receive the benefits of the borrowing and credit. The
villagers apply for the credits to SHGs, the application is forwarded the NARMAD Trust, and the EIC
makes a final decision for an approval. Currently, the villagers can borrow money with 7 % interest,
which is a relatively low rate compared to other similar microfinance schemes. For example, the
basic interest at Grameen Bank, Bangladesh is 10 % with flat rate, and the housing loan is 8%.
Although the SHGs repaid to the NARMADA TRUST actually with 5 % interest, the SHGS repaid
7%, and 2% of interest as a safety fund. The guideline was set up for lending funds to villagers by
NARMADA Trust members, NGOs, and CEE.
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