Social Impact Assessment: Muthoot Fincorp

Submitted to: Muthoot Fincorp, Kochi Muthoot Chambers City Branch, Opp: Saritha Theatre, Banerji Road, Kochi Submitted by: INTELLECASH Microfinance Network Company Pvt. Ltd. #11 F, Gopala Tower, Rajendra Place, New Delhi 110008, INDIA Tel: +91-11-47093361, 45558027, 28, 29 Fax: +91-11-45558026 Website: www.intellecash.com Mumbai New Delhi Hyderabad Patna

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Table of Contents
1. Introduction to Muthoot Mahila Mitra 5 1.1. Background 5 1.2. Muthoot presence 5 1.3. Operational Methodology . 5 1.4. Outreach 6 Introduction to Sthreejyothi training programme 6 2.1. Background . 6 2.2. Geographical spread and outreach 7 2.3. Methodology 8 Background of the impact assessment study 8 3.1 Objectives of the impact assessment study . 9 Study phases 9 4.1. Phase I 10 4.2. Phase II . 10 Study Design 10 5.1. Study time frame 10 5.2. Research tool 11 5.3. Sampling method: Stratified random sampling 11 5.4. Research questions 12 5.5. Sampling design 12 5.6. Data analysis 13 Findings and Analysis 13 Respondent profile 13 7.1 Age 13 7.2 Housing status .. 14 7.3 Social status 14 7.4 Poverty status 15 7.5 Occupation status .. 15 Impact Analysis 16 8.1 Impact Heterogeneity . 17 8.2 Insurance coverage (Life, health & vaccination) 17 8.2.1 Life and health insurance coverage . 17 8.3 Member childrens vaccination status . 18 8.4. Savings trend . 20 Participation in community organization trained versus non-trained 22 9.1. Differing patterns of change in leadership 23 9.2. Decision making ability . 25 Impact of income generating loan on business / enterprises 27 10.1 Impact of IGL on business . 27 10.2 Self-perception 28 Swarnavarsham loan .. 29 11.1. Rating Swarnavarsham loan 29 11.2. Utilization of gold coin offered in Swarnavarsham loan 30 11.3. Swarnavarsham loan a key attraction? .. 30 Feedback on the services ... 32 12.1. Client suggestions on Muthoot MMM programme 32 12.2. Feedback from non-trained clients .. 33 12.3. Feedback from Other stakeholders.. 33 Conclusions .. 34 Recommendations . 35

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Annexures
Annexure 1 Impact Assessment Study Muthoot Mahila Mitra Client Questionnaire Annexure 2 - Impact Assessment Study Muthoot Mahila Mithra - Stakeholders

List of Tables
Table 1: MMM Clients trained Table 2: Study phases Table 3: Phase I survey sampling Table 4: Phase II survey sampling Table 5: Profile of the clients covered in sample Table 6: Change in family level income after MMM programme Table 7: Life and health insurance coverage Table 8: Member childrens Vaccination status Table 9: Saving habits Table 10: Community level participation Table 11: Differing patterns of change in leadership Table 12: Members self-perception Table 13: Impact of IGL on business Table 14: Clients feedback and suggestion

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List of Graphs
Graph 1: Insurance Coverage Graph 2: Member childrens e vaccination status. Graph 3: Saving habits Graph 4: Community level participation Graph 5: Leadership skill Graph 6: Decision making ability for trained clients Graph 7: Decision making ability after MMM intervention Trained Graph 8: Decision making ability before MMM intervention Non-trained Graph 9: Decision making ability after MMM intervention Non-trained Graph 10: Decision making and perception trend of trained and Non-trained clients Graph 11: Community level participation Graph 12: Leadership skill Graph 13: Respondents decision making ability-Trained Graph 14: Respondents decision making ability-un Trained Graph 15: Impact of IGL on business / enterprises Graph 16: Members Self perception Graph 17: Rating Swarnavarsham loan Graph 18: Buying / utilizing gold coins Graph 19: Swarnavarsham loan a key attraction

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1. Introduction to Muthoot Mahila Mitra 1.1 Background

Muthoot Fincorp Limited, a subsidiary of Muthoot Pappachan Group (MPG) is a finance company catering to the financial needs of retail and institutional customers. It is registered with the Reserve Bank of India as a nondeposit taking non-banking finance company (NBFC). Muthoot Fincorp Limited focuses on providing an array of financial services through their network of 2,300 branches across India. It has a diverse mix of retail offerings in the areas of consumer loan products. The services comprise of a mix of retail offerings in the areas of gold loan & other loan products including Investment products, Insurance & Advisory Services. Muthoot Fincorp designed Muthoot Mahila Mitra (MMM) Programme in April 2010 with special emphasis for providing microfinance services to women entrepreneurs. It caters to the financial needs of unbanked. Under MMM programme, Muthoot Fincorp offers loans to economically active women for any declared legal end use, like business expansion, working capital needs, purchasing raw material, purchasing animals, marriage, education and debt consolidation. The lending norms of MMM are based on the profile of the members, their cash flows, income stability, repayment capacity, business models and group guarantee. Emphasis is laid on understanding the borrowers weekly and monthly income, family income, household income, other expenses and the resultant installment affordability.

1.2 Muthoot Presence

Muthoot is emerging as a leading player in the microfinance space, presently operating in Kerala, Karnataka and Tamil Nadu. Muthoot Mahila Mitra (MMM) is present in 22 districts with 80 operational branches.

1.3 Operational Methodology

Muthoot Mahila Mitra follows Joint Liability Group (JLG) model of microfinance. Clients are organized in groups of 5-10 women and each woman takes joint liability for the other members of the group. The clients have weekly meetings where they pay back the loan installments and discuss other challenges or concerns regarding members or MMMs loan products and services.

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1.4 Outreach
Muthoot Mahila Mitra has reached 2.95 lakh borrowers as on March 31st, 2012 with 100% women clients. The portfolio outstanding as on March 31st, 2012 was INR 179 Crore with a repayment rate of 99.80%.

2. Introduction to Sthreejyothi Training Programme 2.1 Background

In Collaboration with ACCION1 International, Muthoot Fincorp provides financial literacy and entrepreneurship development trainings to select MMM clients. Under this programme, women clients are trained on business acumen and entrepreneurship aspects. This is initiated by the Muthoot Pappachan Group (MPG) under its Corporate Social Responsibility in partnership with ACCION Dialogue on Business. This is one of the unique features of the Muthoot microfinance initiative. The programme is branded as Sthreejyoti, and was started in Kerala, Karnataka and Tamil Nadu. Sthreejyothi training programme uses interactive games and role-plays to solve real life business challenges. The workshops are participatory and reality based, rather than text book cases, thus it helps people with lower formal education to learn effectively and apply that learning in their business activities. The training modules offered are as follows:

Self-Management for women Communication and promotion of business Leadership skills Feasibility of clients business The Entrepreneur and The Management Savings and Investment Idea to business Cash Management Debt Management

Muthoot and ACCION signed an agreement in March 2010 to design, develop, and deliver Sthreejyothi Programme for a 3 year period. Under this partnership, the role of ACCION is to provide all the training modules, train the Muthoot team, and also monitor the programme.

ACCION International is a microfinance and micro lending organization, giving people the financial tools they need to work their way out of poverty. www.accion.org 6|P ag e

Participants, after successfully completing the programme, are also certified by the Sthreejyothi team and get benefits like market linkages and product branding. Sthreejyothi has trained nearly 5,000 women in its first year of operations and scaled it to 16,000 during the second year. ACCION continues to monitor the members businesses to ensure success. Along with ACCIONs inputs, Muthoot has also collaborated with many other local NGOs to organize workshops on soap making, candle making, fabric whitener, phenyl manufacturing, paper bag making etc. at various centers. As part of this programme, Muthoot has also collaborated with NABARD2 and other Non-Government Organizations to deliver the programme and utilize their expertise for forward and backward linkages.

2.2 Geographical spread and outreach

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India

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Table 1: MMM Clients trained

State Kerala Karnataka Tamil Nadu Total Mar 11 2587 1185 1220 4992 Mar 12 8563 3051 4682 16296

As of March 2012, a total of 16,296 members have been trained from three different states under Sthreejyothi programme. This makes around 5% of the total MMM clients to be trained clients.

2.3 Methodology
MMM has gone beyond regular lending, training and has been trying to enable entrepreneurs to either learn or enhance various skills. Sthreejyothi training programme has trained more than 16000 women entrepreneurs across three states in South India namely Kerala, Karnataka and Tamilnadu. ACCIONs highly competent and skilled facilitators act as Coach to entrepreneurs. It begins with business counseling followed by customization of programme which leads to a unique learning experience. The women entrepreneurs with business acumen are increasingly enrolling for the programme. The programme is not a classroom; it is participatory, fun-to-learn and applies best practices in business mentoring, conducted by the Sthreejyothi facilitators.

3. Background of the impact assessment study

Muthoot Pappachan Group (MPG), as part of its corporate social responsibility programme, has initiated many activities and integrated them in their operations. To understand the impact of these changes and also measure changes in the quality of lives of its customers, over time, Muthoot engaged INTELLECASH3 Microfinance Network Company (P) Limited to conduct a social impact study for the Muthoot Mahila Mitra programme. Muthoot Fincorps microfinance operations are spread across three states namely Kerala, Tamil Nadu and Karnataka covering around 295,000 women. Keeping in view the size of the universe and available resources, Muthoot management felt that a sample size of 360 would be reasonable to get some insights on the impact. Based on this discussion, INTELLECASH has selected a sample size of 360 covering both Sthreejyothi and NonSthreejyothi members as part of the impact assessment study. The sample set covers all three southern states and includes 15 districts. Further, it was decided that the sample should cover only 2nd cycle clients, so that clients who spent reasonable time with Muthoot will be able to share their thoughts on the MMM programme.

INTELLECASH is a premier microfinance consulting company specialised in providing wide range of services.

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3.1 Objectives of the Impact Assessment study

To understand the various activities carried out for Muthoot Mahila Mitra members. To measure the knowledge and skills of women group members before and after the intervention. To measure the impact of the interventions on the target clients managerial abilities, and if it has contributed to an improved quality of life. To understand other stakeholders view and perspective on the intervention.

4. Study Phases Table 2: Study phases

Sl No 1 Activities Initial Assessment and Tool Design Field interview (360 sample size with 2 ICash and 4 MUTHOOT FINCORP resources) Partner interview (other stake holders like NABARD and ACCION) Data Compilation and Analysis Detailed Report Preparation Presentation of the Report Mar 12 Week 1 Mar 12 Week 2 Mar 12 Week 3 Mar 12 Week 4 Mar 12 Week 5 Apr '12 Week 1 Apr '12 Week 2 Apr '12 Week 3 Apr '12 Week 4 May '12 Week 1 May '12 Week 2

4 5 6

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4.1 Phase I
In the first phase of the study three resources from INTELLECASH were directly involved in the survey. They also simultaneously trained the MMM team for the second phase of the study. During this phase total 91 questionnaires were administered.

Table 3: Phase I survey sampling

State Kerala Karnataka Tamil Nadu Total Survey conducted 24 17 50 91

4.2 Phase II
MMMs resources that were trained by INTELLECASH during the first phase carried out remaining part of the survey and 269 forms were administered in the second phase of the survey.

Table 4: Phase II Survey sampling

State Kerala Karnataka Tamil Nadu Total Survey conducted 231 13 25 269

5. Study Design 5.1 Study Time frame

The field work/data collection was undertaken in the month of March and April of 2012.

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5.2 Research tool

Data collection tool: Keeping in mind the various stakeholders in the study, INTELLECASH used following data collection tools. a) Structured Interview/ Questionnaire schedule ( for clients) b) Structured Questionnaire ( other stakeholders) c) Secondary sources namely reports, new letters, case studies, brochures, pamphlets etc. d) Focused Group Discussion (FGD). The study combined the application of both quantitative and qualitative tools including questionnaire on different indicators addressed to beneciaries and other stakeholders. Qualitative information was collected through Focus Group Discussions (FGDs), to understand the present situations of the members. The Social impact assessment study includes the processes of analyzing and monitoring the intended and unintended social consequences, both positive and negative, of planned interventions (policies, programme, plans, projects) and any social change processes invoked by those interventions .The subject matter of the impact is MMM and Sthreejyothi Programme in three states of India namely Kerala, Karnataka and Tamilnadu specifically to assess the extent to which these programmes have benefited the target group. , The study has used client recall technique to measure members pre-intervention status.

5.3 Sampling Method: Stratified Random Sampling

The sample was divided into smaller group of trained and non-trained clients based on members' shared attributes or characteristics like geography, present loan cycle etc. A random sample from each stratum was taken in a number proportional to the stratum's size when compared to the population.

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5.4 Research Questions

The key research questions addressed during the study include: 1. Sthreejyothi training programme benefits 2. MMM products and services 3. Change in business income 4. Change in savings, health, and insurance and food habits of the household 5. Change in self-perception, leadership skills etc.

5.5 Sampling Design

A multi-stage sampling design with cluster based sampling was used. Sample of 360 members were selected in different geographical location, rural/urban presence, and trained & non-trained, on random basis. Under each state, about 2-6 clusters with at least 30- clients, which included both trained and non-trained members per cluster were selected, it was decided to cover 50% of sample from trained and 50% non-trained. The sample was spread across the clusters (10 rural and 19 urban) in 41 districts of 3 states. The survey was designed to cover the respondents, who have availed loan(s) from MMM and also Sthreejyothi participants. The traceable samples of trained members and non-trained members were interviewed through structured questionnaires to seek information on the change in the household income, savings, meals, health facilities etc.

Table 5: Profile of the clients covered in sample

State Karnataka Tamil Nadu Kerala Total Clients 30 75 255 360 Trained clients 22 46 200 268 Non-trained clients 8 29 55 92 1st cycle clients 19 24 61 104 2nd cycle clients 11 51 194 256

As planned, the sample clearly represents mostly trained and 2nd cycle clients. However, it was noticed that around 20 members from the first cycle, who are not trained are also covered.

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5.6 Data Analysis

The quantitative data of sample households was analyzed to find out percentages, averages and frequencies for various indicators. The results were analyzed and compared across trained v/s non-trained. Further, the quantitative results were supplemented and validated by qualitative aspects like FGDs and field interactions with clients.

6. Findings and Analysis

This section of the report discusses about the study findings and analyses each indicator in detail. Entire section is broadly divided into two sub-sections; the first section describes the respondent profile in terms of Age, social, housing and poverty status, while the second section of the report discusses the impact analysis, namely family income, savings pattern, children education & vaccination and overall well-being of the family.

7 Respondent Profile 7.1 Age

Graph 1 : Respondent profile

Majority of the survey respondents are in the age group of 31-40 years. The average age is 36 years. It is believed that this age group is the most productive in terms of working and contributing to household economy.

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7.2 Housing Status

Graph 2: Respondents social status

The social profile of the respondents shows that majority are represented by Other Backward Caste (OBC) social category followed by schedule caste around 25%. Hence, it is felt that Muthoot can review its target segment in terms of social profile, in order to have a more diversified client base.

7.3 Social Status

Graph 3 : Respondents housing status

Around 77% of the Muthoot clients own a house. This may be considered quite well, as it ensures that members are stable and reliable in terms of mobility, and may be considered less risky while lending. Still, around 20% seem to be staying in a rented house; this is clearly an operation policy deviation. Muthoot can review this policy and take necessary action.

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7.4 Poverty Status

Graph 4 : Respondents poverty status

Muthoot approach seems to be balanced in terms of client targeting with reference to their poverty status. Around 55% of the clients are represented by below poverty category. During the field visit and FGDs it was noticed that Muthoot is targeting economically active population.This confirms that Muthoot is targeting to address economically active clients and not merely focusing on their poverty status.However, keeping in view of the recent RBI guidelines on MFIs, this should be considered a major gap for Muthoot and should invite immediate policy review, especially if Muthoot wants to carry out microfinance as an NBFC MFI.

7.5 Occupation Status

Graph 5 : Status on Members Occupation

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The above tables show that around 85% of the respondents are involved in some kind of business/enteprise. It is interesting to see that out of 306 members who are engaged in business, around 57% of the member were running the business before they joined MMM programme while around 28% of the repondents started running the Business/enterprise post joining MMM programme

8. Impact Analysis
Under this section of the report, the findings on each indicator are analysed in detail, they include both qualitative and quantitative aspects of impact. The quantitative aspects include change in family income, savings patterns and insurance coverage, whereas the qualitative aspects include decision making, participation, leadership, and impact of IGL on enterprise.

Table 6 : Change in family level income after MMM programme

Family level income level after MMM PROGRAMME All members Increased Decreased Constant Family Income Level

81% 0% 19%

Graph 6: Respondents family income levels

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Of the total respondent around 81% reported that their income has increased after joining MMM programme. This is a very significant achievement for Muthoot. This also confirms that Muthoots basic objective of microfinance is fulfilled. It can also be inferred that the programme has been successful to a great extent. The impact of the increase income could be seen across other indicators namely improved access to health, education, insurance etc, which can be considered as the improved quality of life of MMM members.

8.1 Impact Heterogeneity

This section of the report describes the impact of the various MMM interventions on two different sample groups. Trained members Non-trained members It is to be noted that the non-trained members are also part of Muthoot Mahila Mitra programme and have taken loan from MMM.

8.2 Insurance Coverage (life, health & vaccination)

8.2.1. Life and health Insurance coverage Table 7: Life and health Insurance coverage Not yet 102 51 157 57 insured

Parameters Life Insured Trained Life Insured Non-trained Health Insured Trained Health Insured Non-trained

Before MMM 135 31 74 22

After MMM 31 10 37 13

Life Insurance: The analysis on the insurance coverage under life insurance indicates that before Joining MMM programme many of the clients already accessed various kind of insurance. However, there has been a positive impact of joining the MMM programme, nearly 11% of the clients have taken insurance for the first time after joining the MMM programme. Further, it clearly shows that the impact is more among trained (Sthreejyothi) members. Next level of analysis shows that, post joining MMM programme, members who are trained using insurance are almost three times more than non-trained clients. Similar trend is observed under Health insurance coverage. However its interesting to observe that the scope for improvement is still very high, nearly 42% of the total sample size are still not covered under insurance.

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Graph 7: Insurance coverage (life & health)

Source: Survey Data

Conclusion: MMM could look at the option of creating special focus on Insurance education to its clients. The Training program should have a module on the importance of life insurance.

8.3 Members children Vaccination status

Table 8: Members children Vaccination status Not vaccinated yet 35 16 39

Parameters Vaccinated Trained Vaccinated Non-trained

Before MMM 99 28

After MMM 23 9

NA 111

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Graph 8: Vaccination Coverage

Source: Survey Data

Vaccination does not apply to approx. 50% of the respondents as their children are grown ups and does not require vaccination. Out of the eligible client responses, it is observed that nearly 60% client children are vaccinated before they joined the MMM programme. Of the total 23 clients whose children are vaccinated post MMM enrollment makes up around 15%, which is reasonable impact when compared among the trained Vs. non-trained members.

Conclusion: Sthreejyothi trained members are aware about the benefits of vaccination and thus get their children vaccinated.

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8.4 Savings Trend

Graph 9: Respondents savings trend

Savings trend
Post office / bank 187 168 Self-help group Private / chits Piggy bank / Home 174

141 111 83 84 93 70 34
9 19 11 24

127

133 127 99 92

17

0 0 >Rs. 1000 Before MMM PROGRAM

0 0 >Rs. 1000 After MMM PROGRAM

Rs.100 - Rs.500 Rs.100 - Rs.500 Rs.501 - Rs.1000 Rs.501 - Rs.1000 Before MMM PROGRAM After MMM PROGRAM Before MMM PROGRAM After MMM PROGRAM

The survey figures on savings habit of MMM programme clients reveal that most of them had increased their savings amount post joining MMM programme. Members are using post office / bank as the most preferred option to saving their amounts which is in the range of Rs.1000/- and above. The increase in this segment is most significant after MMM programme. Savings amounts at Self Help Groups (SHG) also increased in the range of Rs.500/- - Rs.1000/-. Savings at private chits has increased after the MMM programme for the amount range Rs.100/- - Rs.500/-.

Conclusion: MMM intervention has shown a better impact on savings of the clients. The level of savings has increased and clients understood the importance of savings much more than before. Members are looking for secured and good returns for their savings. There is a lot of scope for Muthoot to introduce the products which help the members get good returns for their savings.

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Table 9: Savings habits

Savings Habits Trained members savings money Non-trained members savings money Before MMM 103 38 After MMM 106 21 Not Saving 59 33

Graph 10: Saving habits

Source: Survey Data

Its interesting to observe that around 35% of the members have either started savings or increased quantum of savings, when compared to non-trained client; this clearly shows the impact of Sthreejyothi Training. The graph clearly shows impact on savings after the Sthreejyothi training. The number of clients saving money after Sthreejyothi training is 5 times more than the members who have not attended training. Training has a positive impact here. However, there is still considerable scope to include other members who are not saving. Conclusion: Sthreejyothi training program showed good impact on increase in savings quantum After joining MMM and undergoing Sthreejyothi training program, clients ability to save money on monthly basis has gone up. About 22% of clients are not able to save money even after receiving Sthreejyothi training because of household problems which could be higher expenditure of the household, repayment of previous debt etc. It has been noticed that after joining MMM clients very well understand benefits of savings and inclined to save money on monthly basis. Some clients save money and then invest that in mutual fund or gold investments. Muthoot can track these clients and can offer wide range of products.

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Box 1: Advantages of MMM loan It is available at the doorstep Get gold coin as savings/investment Involves less paper work Accessible to the poor No corruption involved No involvement of middlemen The groups expressed that: The loans from MMM were far better and cheaper than borrowing from private sources The loans were given without delay and the entire processing was completed at their doorstep The repayment was also easy
Source: FGDs

9 Participation in community organization: trained versus non-trained

Table 10: Community level participation Participation Trained Non-trained in Full Partial No Full Partial No community participation participation participation participation participation participation organization 37 71 160 9 25 58

While analyzing the participation level of the members in various community development activities, it is noticed that there is no significant difference between the groups. Across the scale of participation, the pattern is same in both groups (trained and non-trained). Members seem to be not very keen in participating in general community development programme. This also indicates that either the members are fully engaged with Muthoot initiatives or their own Livelihoods development. Hence, they are not getting time to involve themselves in the other programme. Additionally, these are slow moving developments and also largely dependent upon local dynamics and culture.

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Graph 11: Community level participation

Source: Survey Data

Inner circle represents trained clients and outer circle represents non-trained clients.

Conclusion: MMM needs to review its training module on community participation if this is one of their agenda.

9.1 Differing patterns of change in leadership

Table 11: Differing patterns of change in Leadership Before joining MMM Differing patterns of changes in leadership skill Trained Differing patterns of changes in leadership skill Non-trained 69 After joining MMM 48 Not at all

150

10

12

70

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Graph 12 : Leadership skill

Source: Survey Data

Inner circle represents trained clients and outer circle represents Non-trained clients

Conclusion: Leadership skills show no major improvement for trained and non-trained members. In overall sample, it is evident that more than half of the clients surveyed are not showing any change in leadership skills. However, among trained this percentage is less. It is also a time taking process and requires intervention at multiple levels for longer periods. MMM should review its training modules to ensure that this particular aspect gets proper attention in times to come.

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9.2 Decision Making Ability

Graph 13: Respondents decision making ability-Trained

Graph 14: Respondents decision making ability-un Trained

Source: Survey Data

Interesting pattern has emerged on the members decision making ability on critical aspects. Members decision making ability has improved from less than spouse to equal to spouse scale; this confirms that Muthoots inputs are more on gender balance issues. The members and their spouse are maintaining balance in decision making process.
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However, this trend is more significant among trained than non-trained. Trained members decision making ability has shown quicker movement than that of the non-trained members. It can be presumed that the impact is due to inputs provided during the process of training and also access to credit by members.

Conclusion: On almost all aspect, women have shown higher degree of decision making ability after joining MMM program. Especially on money, production material, household goods, loan utilization and earning, women have got decision making power equal to spouse after MMM intervention. The change is significant among the trained members where their decision making status moved from less than spouse to equal to spouse. Asset purchase decision still remains with spouse. Women intervention is more visible in purchase of production material, household material and utilization of the loan. MMM clients in generally have got significant decision making power. In most of the cases women have either equal or more decision making powers in comparison to spouse. Overall MMM intervention and their trainings appear to have a direct impact on the decision making capacity of its women members.

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10. Impact of Income Generating Loan on Business/Enterprises. 10.1 Impact of IGL on Business
Table 13: Impact of IGL on business
Increase in sales Increase in profits Expande d size of business activity New products launched Increase in producti on / turnover 28 No Change Improve ment in quality of the products 13 Reduced expenses Hired more workers

Number

117

40

31

29

24

10

10

Graph 15: Impact of IGL on business / enterprises

Overall results clearly show that IGL has a positive impact on members business and enables them to grow and sustain their business. Nearly 50% impact is seen in terms of increase in profit and sales, while around 30% impact is in terms of growth of the business. Its interesting to see that nearly 3% of the members enterprises are creating jobs, which is one of the key achievements. This essentially means that members are not only growing their business, but also providing employment opportunities to fellow community members. If the percentage of such member enterprises can be increased over a period of time, it stands to great a huge impact on the ground.

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10.2 Self-perception
Table 12: Members Self Perception Particulars Feel more confident to run the business 155 Feel more confident as a person 50 Customers are happy with my business services 9 Feel more happy with my business 17 No Change 16 5 Not responded 21 49 Overall self-perception of members is quite high. They responded by saying that they feel more confidence in their professional and personal life. It is interesting to observe that the trend is more or less similar in both groups of trained and non-trained. Graph 16: Members Self perception 2 2 6 28 Trained Non-trained

Source: Survey Data

Inner circle represents trained clients and outer circle represents Non-trained clients.

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Conclusion: The training clearly has an impact on the confidence level of members in handling business and taking business related decisions. As a person, members feel more confident after getting training It seems that the confidence level is more due to be MMM program in general than training specific inputs. It is believed that access to finance has always proved to be important factor in building members confidence.

11.

Swarnavarsham loan

To understand the impact of Swarnavarsham product --one of the unique products of Muthoot Fincorp Limited, members feedback on was captured both in terms of its benefits and value. The findings are interesting and encouraging.

11.1 Rating Swarnavarsham loan

Graph 17: Rating Swarnavarsham loan

The graph clearly shows nearly 95% of the members liked Swarnavarsham product. Out of the 2% who suggested for improvement, a majority felt that cost can be reduced.

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11.2 Utilization of gold coin offered in Swarnavarsham loan

Graph 18: Buying / utilizing gold coins

Total 153 members find gold coin as indirect way of savings and 110 members said that they will use the gold coin for making ornaments, while 50 members see it as an investment. The rest said that they will use it for marriage; during emergencies or for gift it to somebody. Overall members value this product very highly.

11.3 Swarnavarsham loan a key attraction?

Graph 19: Swarnavarsham loan a key attraction

The finding on the attractiveness of the product is positive. Around 69% of members mentioned that the gold coin is a key attraction for taking loan from Muthoot,

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When asked if you would take loan without Swarnavarsham, it is interesting to observe that a high majority (94%) says that they will still take the loan. This reinforces the belief that members perceive Swarnavarsham as a value added product but not as the main product. Out of the total responses, 25% suggested an increase in the loan amount for subsequent cycles. Tenure increment was suggested by 20% of the respondents, and about 20% wanted to increase the weight of gold coin (Swarnavarsham loan) from 1 gram to 2 grams. Conclusion: Maximum members are satisfied with the product and services of Swarnavarsham loan. Maximum Members are using gold coin as savings, investments and for making ornaments. Though maximum members mentioned that gold coin is a key attraction for taking loan from Muthoot, they will continue availing loan from Muthoot even if gold coin is not offered

Box 2: Gold coin scheme: A boon to the women The reasons for preference of the gold coin scheme, especially by women, were their ability to: invest in gold at their doorstep indirect way to save small amounts on regular basis which was not possible in any formal nancial institution create emergency asset to give them some security at difficult times contribute to their family or near and dear ones during distress Members felt that availing gold coin was almost like a panacea as it helped in emergency situation including medical purposes, childrens education and social and religious functions
Source: FGDs

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12. Feedback on the services 12.1 Client suggestions on Muthoot MMM Programme
Across the total sample of 360 clients, there was a general satisfaction with the micronance programme of MMM. In order to analyze clients suggestions and feedback, we have divided their response into three broad areas: namely product, process and Sthreejyothi training. Table 14: Clients feedback and suggestion

Product
To increase loan amount To increase repayment from 52 weeks to 60 weeks To increase gold coin from 1 gram to 2 gram weight under Swarnavarsham loan To introduce loan product with monthly repayments To introduce personal loan, housing loan, two wheeler loan, rickshaw loan To decrease interest rates To introduce interest fee emergency loan and festival loan To introduce top up loan. To introduce education loan Individual Loan product with big ticket size loans enterprises

Process
To reduce the documentation process for secured loan To speed up the disbursement process at branch To be flexible with center meeting timings To provide gold coin at the time of disbursement under Swarnavarsham loan To increase rented house up to 60% in a group To give subsequent loan immediately after completion of a loan To start discussions in center meetings which women can benefit from in their personal and social-life To introduce center leader incentives To introduce Swarnavarsham loan without gold coin and interest To organize seating arrangements and drinking water facility for the clients at branch

Sthreejyothi Training
To start skill development trainings every quarter and refresher trainings To initiate medical and eye camps To introduce market linkages programme To start self-employment training like chocolate making, animal husbandry, jute products, poultry farming To provide training on value addition in their current products in terms of moving to next level. To start Muthoot provision stores

To arrange job fairs To start Muthoot school and children education scholarships Training on sales and marketing Awareness on farming and on women related issues like health and hygiene

To increase business loan up to 1 lakh

To start loan products with fortnightly repayment schedules

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12.2 Feedback from non- trained clients

To capture the feedback of the non-trained clients, a separate analysis was carried out to understand their specific requirements and expectation from MMM. Few of the key suggestions are mentioned below: 1. 2. 3. 4. Need Sthreejyothi training. Provide Trainings on Business development including market linkages and cash management training. There were suggestions for: tailoring, designs and embroidery trainings, umbrella making training, saree designing training, and ornaments and jewelry making. Need Mushroom harvesting training, Bakery items training, Paper bags making training, pickle making training.

12.3 Feedback from other stakeholders

MMM understands the importance of financial assistance to the poor and provides timely credit support to the poor and vulnerable groups who are finding difficult to get loan support from financial institutions.MMM Team-from all the departments-from the top to the bottom gives the full support for the implementation of the Sthreejyothi programme.

Source: Accion

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13

Conclusions

Based on the above findings and analysis, the following conclusions have been drawn with special focus on important impact indicators. Muthoot Mahila Mitra appears to have achieved most of its microfinance programme objectives. Evidence of the achievements can be seen under income increase and improved quality of life namely health, education and childrens vaccination. In terms of financial inclusion, the results are mixed; members are fully included on credit services, but moderately included on savings and very less on Insurance services. Muthoot Fincorps focus in terms of targeting client segment is also in line with its goals. However, the Socio-economic profile of the members needs to be reviewed both in terms of economic and social profile, keeping in view the regulatory aspects that govern the newly formed class of NBFC MFI's. Muthoots approach of using CSR activities to complement its Microfinance programme is yielding good results. Its flagship programme Sthreejyothi is showing positive results and members perceive the programme as positive. One of the key achievements of the MMM programme is the impact on Decision Making ability of its members. The findings confirm that members have started taking equal position in the family in all major decisions. The results are more pronounced among the trained clients. The impact of Swarnavarsham is also very good. However, this is not seen as the key product but as a value added product. The demand for Swarnavarsham product is quite high and members wants it to be packaged along with the regular loan and also increase quantum of the Gold coin. Impact of IGL product on the Business is also quite good; nearly 50% of the clients confirm that their profit and sales have increased. While 30% felt it has helped them to expand and grow their business. Though the employment/jobs created by members' enterprises is around 3%, it is considered as very important indicator in social performance management arena.

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14. Recommendations
Recommendations: Muthoot can review the social profile of its clients and needs to focus on socio-economically excluded segments also. Further, keeping in view of recent RBI guidelines on MFIs, it is imperative for Muthoot to review its client profile in terms of APL. This can be measured through below poverty line (BPL)/above poverty line (APL), social category and status on house ownership. In terms of portfolio segmentation, it can diversify to agriculture and allied to mitigate the risk. This is also required keeping in view the social performance management. The proponents of SPM also judge quality of MFI based on the range of products and services that it offers to its community. On the products front, Muthoot can offer more flexibility in terms of tenure and frequency, especially monthly repayment options. This is also considered as one of the critical aspects of social performance management. Muthoot can review their current operations policy on rented house residents eligibility and allow some rented residents to access credit from Muthoot. Muthoot can focus on Sthreejyothi with special attention on selection and screening the right clients for training. Some kind of screening can be carried out to ensure that inputs goes to the right members. Need based skill trainings can also be offered to clients since it is a very specific and clear demand from the clients. Focus on market linkages needs to be improved, especially post trainings. Cost-Benefit analysis can be carried out on the Sthreejyothi programme to explore the option of institutionalizing the programme over a long term.

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ANNEXURE 1

Impact Assessment Study Muthoot Mahila Mithra Clients

Muthoot Finance Corporation intends to understand the impact of its various initiatives under Muthoot Mahila Mitra. To carry out objective assessment, Muthoot requested INTELLECASH do the study. The details of the respondent will be kept confidential. Hence, request you to give honest response to the following questions. Your response and suggestions will help Muthoot to improve the program further and bring better services to all its members.

Client Name: Town / Village: House (Own / Rented / Lease / Other): Start time of interview:

Age: State: BPL / APL:

Caste: ST / SC / OBC / Min (Kerala / Tamilnadu / Karnataka)

1. Of the following MMM initiatives which services you have utilized a) Education initiative b) Health programs c) Sthree Jyothi d) All the three e) none of the above 2. Which programs did you OR any of your family members attended? (Please tick)
a. Sthree jyothi training b. Medical Camp c. Health Insurance d. School Going e. College Going f. Skill Development k. Educational Material l. Summer coaching camp m. Seminars for parents and children n. Counseling Program o. Sponsorship for higher education p. Skill training q. Heart to heart orchestra r. Muthoot Ernakulum cricket club s. Bakery making training t. Others, please specify

g. Anti-ragging campaign h. Smiles at Muthoot plaza i. j. MPG pace setter 2007- Talent hunt Mushroom training

3. Is your family life is insured? a) Before MMM b) After MMM 4. Is your family health is insured? a) Before MMM b) After MMM

[ c) Not at all [ c) Not at all [

5. Do you have children who are in the age group require immunization? a) Yes b) No
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6. If yes, are they vaccinated? a) Before joining MMM b) After joining MMM c) Not at all 7. Is there any change in your family food habits a) Yes after MMM b) No after MMM c) Yes before MMM d) No before MMM 8. How is your family well being? (Please tick ( ) ) BEFORE MMM Able to consult doctor for treatment Relationship and get medicines Always Never Sometimes Self Spouse Mother Father Mother-in-law Father-in-law Child 1 (Male / Female) Child 2 (Male / Female) Child 3 (Male / Female)

AFTER MMM Able to consult doctor for treatment and get medicines Always Never Sometimes

9. Is there any change in family household income level after MMM? a) Increased b) Decreased c) Constant 10. How many of your children are going to? Line Item Girls Before After MMM MMM Going to School / College Not going to School / College Going to labour work Not going to labour work

Boys Before MMM After MMM

Total Boys & Girls in your family

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11. Details of loan from Muthoot? Purpose Loan amount In which year Loan cycle Income generation Household expenses Asset purchase Gold purchase Other specify 12. Do you run any business / enterprises / income generating activity? a) Yes b) No 13. If yes, when did you start? a) Before MMM b) After MMM

EWI

[ c) NA

14. Which activity do you do? [ ] a) Tailoring / Embroidery h) Business / IGA / Enterprise / Trading / Petty shop b) Agriculture i) Animal husbandry c) Hotel / Food items j) Beauty parlor d) Candle making / Agarbatti making / Beedi rolling e) Dry cleaners / Washing / Cloths ironing k) Paper plates / cups / bags f) House wife l) Labor work / Daily work g) Service / Salaried m) Others, Please specify ___________________________ 15. Did you attend any skill training program before joining MMM? a) Yes b) No c) NA [ ]

16. If yes, please list the name of the training _____________________________________ 17. Did you setup the business / enterprise / IGA after attending the skill training? [ a) Yes b) No c) NA 18. Did you start the same activity/trade that you are trained? a) Yes b) No c) My old activity 19. Are you able to use the skills that are taught in the training? a) Yes b) No c) NA 20. Is there any change in the skills after attending joining MMM? a) Yes b) No [ ]

21. If yes, please tick the option that is feel most useful [ a) Manage financial transactions b) Maintain books of records c) Manage stakeholders like creditors / debtors / suppliers / financial organizations d) Manage the cash flows e) Communication f) Debt Management g) Leadership h) NA
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22. Is there any change in business / enterprise / IGA? [ ] a) Increase in sales b) Increase in production / turnover c) New products launched d) Launched new business e) Expanded size of business activity f) Improvement in quality of the products g) Started new shop in another location h) Reduced expenses i) Hired more workers j) Increase in profits k) No change l) NA 23. Is there any change in income and financial resources? a) Business is in profits b) Increased expenses c) Savings initiated d) No Profits / No loss e) NA 24. Did you purchase any of the following assets after Joining MMM? a) Home appliances b) Business related c) Gold d) Land / buildings e) Not at all 25. Are you able to run your business independently after MMM programs? a) Yes b) No 26. If No, who is assisting in your business? a) Spouse b) Parents [ ]

[ c) Others

27. Are you confident enough to run an enterprise after attending the skill training program? a) Yes b) No c) Cant say [ ]

28. Do you feel the need for any other handholding support other than loan? a) Yes b) No

29. If yes, which hand hold support did you need the most? [ a) Financial Linkages b) Marketing Linkages c) Loan support d) Packing / Transport e) Quality Check f) Designing / Labeling g) Registration / Licensing h) Advertisement i) Others please specify __________________________________________________

30. What change do you feel in your self-perception after training? [ ] a) Feel more confident to run the business / IGA / Enterprise b) Feel more confident as a person c) Customers are happy with my business services d) Feel more happy with my business / IGA / enterprise e) No change

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31. If you have to rate the difference in decision making power before and after joining MMM, how would you rate on the following parameters? Item Before NA Less Equal More Fully / After than to than independently spouse spouse spouse Real assets (Land, Houses) Before After Money (Savings, Cash) Before Livestock Production materials (Enterprises, Farm tools) House hold goods (Kitchen, furniture, TV etc) Use of the loan Money earned from enterprise After Before After Before After Before After Before After Before After

32. Do you save money? a) Before MMM

[ b) After MMM c) Not at all

33. If yes; where and how much does you do save? Where Before MMM Savings Amt pm Post office / Bank SHG Private / Chits Piggy bank / Home

After MMM

Savings Amt pm

34. Are you participating in any community organizations / civil society groups? a) Full participation b) Partial participation c) No

35. Are you holding any leadership position in one or more groups or organizations? [ a) Before joining MMM b) After joining MMM c) Not at all 36. How would you rate the disbursement process at MFL branch? a) Excellent b) Good c) Average 37. If has to improve, kindly suggest the improvements? a) Service part b) Quality part c) Cost part
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[ d) Has to improve [ d) Others specify

38. Have you availed any other MFL Product? a) Yes b) No 39. If yes, please give the following details of products and services availed? Products Amount Charges Turnaround time Money Transfer Vehicle loan Gold loan Gold coin 40. Do you recommend MFL to your friends / relatives? a) Yes b) No c) In future 41. Since when do you know about Muthoot? a) After availing loan b)Before availing the loan 42. If before, by whom? a) Relatives b) Friends

Liked Features

[ c) Neighbors d) Others [

43. Can you differentiate between blue Muthoot and other group? a) Yes b) No c) Merely 44. Do you want to continue in this MMM? a) Yes b) No

[ c) Cant say

45. If No, why? _________________________________________________________________ 46. How would you rate Swarnavarsham loan? a) Excellent b) Good c) Average 47. If has to improve, kindly suggest the improvements? a) Service part b) Quality part c) Cost part [ d) Has to improve [ d) Others specify ]

48. Why do you want to buy gold coin? [ a) For marriage purpose b) An investment c) As savings d) Help in critical situations e) for giving as gifts f) for making ornaments 49. Is this gold coin a key attraction for taking loan from Muthoot? [ a) Yes b) No 50. If the gold coin is not offered would you like to take loan? a) Yes b) No [

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51. How MFL products / activities / trainings / programs can be improved?

52. Any suggestions / comments?

Name and Signature of the interviewer

Date and Place

End time of interview

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ANNEXURE 2

Impact Assessment Study Muthoot Mahila Mithra

Muthoot Finance Corporation intends to understand the impact of its various initiatives under Muthoot Mahila Mitra. To carry out an objective assessment, Muthoot requested INTELLECASH to carry out the study. The details of the respondents will be kept confidential. Hence, we request you to give honest response to the following questions. Your response and suggestions will help Muthoot to improve the program further and bring better services to all its members.

Name of the organization: Details of the respondent: A) B) C) D) Name Designation Contact number Email id

1) Type of Stakeholder: 1. NGO 2. Accion 3. NABARD 4 Other

2) Did you /organization sign a formal partnership agreement with Muthoot? 1. Yes 2. No If yes, what are the specific objectives of the agreement? _______________________________________________________________ _________________________________________________________________ __________________________________________________________________

3) What is the tenure of the agreement /partnership? a) Less than a year b) 1-3 years c) More than 3 years
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4) In what specific areas have you contributed to the MMM programme. _______________________________________________________________ _________________________________________________________________ __________________________________________________________________

5) Do you review the programme progress? a) Yes b) No c) Sometimes. 6) With whom / which department do you interact in MMM _____________________________________________________________________

7) What has been your experience with MMM association so far? _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ 8) What are the challenges you have experienced working with Muthoot _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

9) What are your expectations from this partnership _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

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10) Do you feel that the MMM programme intervention is having any impact on the end client? a) Yes b) No 11) If yes can you list down TOP 3 Impact areas? __________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ 12) How do you think MMM programme can be made more effective? a) Yes b) No c) Cant say 13) Do you intend to continue with MMM over long (5 years) period of time? a) Yes b) No 14) If yes; would your role remain the same or would you want to expand the scope of the engagement with MMM ____________________________________________________________________ _____________________________________________________________________ __________________________________________________________________

THANKS FOR YOUR VALUABLE TIME AND SUGGESTIONS.

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