SOIL Report 2008 - ACCESS Development Services

Chapter I34MFIs andNGOs havehelped animpressivenumber ofover 10 millionhouseholds withcumulativeloans of overRs 10,000crore. Some,like BASIX,recognise thelimitation ofminimalistmicrocreditand have builta significantmulti-facetedlivelihoodpromotionprogramme.6.4 Livelihood efforts by NGOsNon-governmental organisations (NGOs) have played a large role in livelihood promotion. The time rightbefore and well after India’s Independence saw several Gandhian organisations promoting livelihoodsin agriculture, khadi and village industries. One example of this was the Association for Sarva SevaFarms (ASSEFA), promoted by S. Loganathan in Tamil Nadu in 1969. ASSEFA originally meant to helpformerly landless families who had received land through the Bhoodan movement, make their land morecultivable. Today, it works with marginal farmers and the landless, in about 8,000 villages in eight statesthrough promoting land-based economic development – dairying, agriculture and micro-enterprises.It also works in education, community health and housing. With the help of BASIX, ASSEFA also setup Sarvodaya Nano Finance Ltd, a non-bank finance company (NBFC) which is owned by over 25,000women’s self-help groups (SHGs), and has provided micro-credit worth over Rs 400 crore since 2001.MYRADA, whose original name was Mysore Resettlement and Development Agency, was established in1968, by Capt Bill Davinson. It initially worked in resettling Tibetan refugees in Karnataka. A decadelater it shifted focus to promoting livelihoods of the rural poor through microcredit, building appropriatepeoples’ institutions, and training in relevant activities. It works in partnership with other NGOs in sixother states with about 75,000 families. Through a separate affiliate, Sanghamitra Rural Financial Services,it works with 6 lakh poor women, offering bulk loans to their SHGsStarting with a nature cure centre on the outskirts of Pune, Maharashtra, the Bhartiya Agro IndustriesFoundation (BAIF) later renamed BAIF Development Research Foundation was promoted by Gandhiansocial worker Manibhai Desai. Using local affiliates, BAIF works on a variety of rural developmentinitiatives, particularly livestock development and watershed and land resource development, agriculture,agro-forestry, Wadi (homestead orchard), renewable energy, and empowerment though SHGs. BAIFworks in 45,000 villages in 12 states across the country.Professional Assistance for Development Action (PRADAN), began in Bihar in the early 1980s inorder to help NGOs and government agencies make their development efforts more effective. It alsobegan to assist corporate rural development efforts (ITC Ltd) and the largest government livelihoodpromotion programme, IRDP. In the mid 1980s it also began working directly with poor communitiesin livelihood promotion. Today PRADAN works in 30 projects in seven states, with over 120,000 ruralpoor households, supporting agriculture, livestock, and non-farm rural enterprises, providing access tocredit by linking SHGs with banks, which PRADAN pioneered like MYRADA.After liberalisation, since 1991, banks became more averse to lending to the poor. As a result, manylivelihood promotion NGOs began to focus on microcredit, some forming SHGs and linking themwith banks and others started lending directly to the poor. In 1996, BASIX was promoted as India’s firstcommercial microfinance institution (MFI), as the founder believed that NGOs could not have significantaccess to capital markets. Yet, over 1000 NGOs got into microcredit with funds from FWWB, RMKand SIDBI. High unmet demand and supportive donors/lenders enabled rapid growth of these MFIs,and many of them including SHARE, Spandana and SKS, transformed from NGOs to NBFCs. Manyothers chose the intermediate form – a Section 25 company – like Sanghamitra of MYRADA, IASC ofPWDS+HDFC, and CMC of Cashpor. Still others, like PRADAN decided to stay as SHG promotionagencies and link their SHGs with banks. Through these diverse forms, MFIs and NGOs have helpedan impressive number of over 10 million households with cumulative loans of over Rs 10,000 crore.Some, like BASIX, however, recognise the limitation of minimalist microcredit and have over the yearsbuilt a significant multi-faceted livelihood promotion programme.6.5 Corporate efforts for livelihood promotionIndia’s large companies have made several efforts at livelihood promotion. These can be broadlyclassified into three categories (i) as philanthropic efforts, through charitable Trusts (ii) as corporate34