Case Study Status Report on Gram Nidhi - APFED

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The innovativeness for this micro finance scheme is not only to carry out pro-poor measures, but also to combine the programme with environmental education for promoting their sustainable living. The Gram Nidhi model is based on three E’s: Economic Support, Extension service, and Environmental awareness. The package of measures based on three E’s conferred a benefit on entrepreneurs. To take an example of many, the Technical Assistance Fund (TAF) is introduced into the model. The villagers in the rural area have not been able to access micro-credit due to lack of knowledge, as well as not understanding why it is important to conduct sustainable practices such as organic farming rather than producing an instant cash crops like cotton. Therefore, the CEE formed the TAF to provide a necessary training and the technical assistance for improving their agricultural and livelihood in a sustainable manner. The TAF plays a role as an advisory service for consulting about financial control, accounting, as well as offering technical assistance for agriculture, animal husbandry, agro-forestry, horticulture, agro-processing and water conservation. Through these activities, the TAF significantly contributes to convince villagers of the benefits of practicing sustainable farming in the long term. In addition, the Gram Nidhi model applies an eco-package concept providing further positive impacts on promoting environmental-friendly entrepreneurs. The eco-package provides the utmost benefits for each entrepreneur with linkage to the market at the village level. The Gram Nidhi diversifies the activities of entrepreneurs for funds, so that even a landless farmer is able to start an enterprise such as processing activities for milk production. A chain of suppliers and consumers at the local level also strengthens community development. Another essential factor is the presence of a female staff member at the local office of CEE. She has been heavily engaged in communication with women’s groups at the village level from the initial stage. The aim is to organise women’s group as SHG to discuss family issues, children education, health, sanitation, therefore the presence of a woman as part of the staff is essential for villagers to facilitate the discussion, as well as to give advise on these issues. Now all villagers, even the men, are building trusting relationships with the woman staff member, and when she visits the village, the men are willing to send their wives to the women’s group, as well as encouraging their wives to get involved in various outside activities, such as participation of the agricultural fair outside of the village. Also, she is a model to which many village girls can aspire. Figure 2: Gram Nidhi programme linkage to the market 6
Future Plan and Challenge This micro finance scheme differs from others which primarily focus on pro-poor activities. The Gram Nidhi model is a combination of micro credit and support in building environmentally sustainable and economically variable enterprises to improve the target villagers’ lives. The Gram Nidhi model also proved that the timely access to a small amount of funds can make a change the rural development. In addition, the long-term involvement of NGOs in the target area is an essential factor to conduce a successful practice. The Gram Nidhi Project shows that the availability of funds in the early stage, the presence of NGOs, and long-term involvement in the target area are essential to implement the project. The villagers are now thinking of raising more funds to expand their entrepreneurial skills to other activities. Although the villagers have been saving money to increase the fund money, it is not so easy for villagers to save extra money regularly. The neighbouring villagers also want to start the similar micro finance scheme, but they have not currently started the programme yet due to the lack of basic funds. Conversely, the Gram Nidhi was sponsored by the World Bank, and this condition actually allows the CEE to start the programme. Without the intervention of a funding organisation, is it possible for the villagers to replicate a similar micro finance scheme by themselves? After conducting the case study, it seems that the absence of a funding organisation is a limiting factor to implement the programme. However, to sustain and expand the Gram Nidihi Project, the CEE still needs to take an initiative to seek other funding organisations to expand the project. In addition, CEE itself must bear some of the cost of basic expenditure such as personnel for the consultation for sustaining the project. In this regards, the CEE is currently working to expand the Gram Nidhi model in collaboration with Yale School of Management. Further study of existing mechanisms of Gram Nidhi require the identification of significant factors for replication, as well as the role of NGOs and government for further improvement of rural development. References Centre for Environment Education (CEE). http://www.ceeindia.org/cee/index.html Centre for Environment Education (CEE) 2008. Annual <strong>Report</strong>. Government of India. 2007. Poverty Estimates for 2004-2005. http://planningcommission.nic.in/news/prmar07.pdf Grameen Bank Home page http://www.grameen-info.org/index.php?option=com_frontpage&Itemid=68 Grameen Bank, Credit Delivery System http://www.grameen-info.org/index.php?option=com_content&task=view&id=24&Itemid=127 7
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Case Study Status Report on Gram Nidhi - APFED

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