NGO-SHG-BANK LINKAGE

Organizational details: i) Annual Report of the NGO ii) Attested copy of registration and bye-law iii) Audited balance sheet for the last three years along with the details of the schedules.

iv) Information about borrowings from different institutions,

date of availing the loan, period of the loan, present outstanding and present position of the account.

v)

Confidential opinion from the lending institution as regards the conduct of the account.

vi)

Resolution to avail loan from the bank.

vii)

A brief note on the history of the NGO, experience and

professionalism of the board of directors, details of

projects implemented and their success rate,

experience and expertise of the executives manning the operations, total number of SHGs promoted by the

NGOs and the operational details like their age,

savings, lending, loans, monitoring system, management and organization structure etc.

Project details:

i) Complete address and location of the SHGs mentioned in

the project report. ii) Date of formation, number of members in each group, total savings, amount of internal lending and recovery percentage on internal lending.

iii) Details of external assistance received if any by these

groups and their present position. iv) Present liability of each group-group wise details to be furnished v) Period and rate of interest on the loans offered by the NGO

to the self-help groups.

v) Period and rate of interest on the loans offered by the NGO to the self-help group. vi) Resolution from each SHGs to avail the loan from the NGO vii) The SHGs should score a minimum threshold marking the grading exercise. viii) Information on the lending system by the NGO to the SHG. Whether the finance is extended to individuals or to groups, and

ix) A detailed note on the credit plan and the income

generating activities.

While NABARD initiated the process of microfinance in India through SHG linkage, the Small Industries Development Bank of India provides bulk lending to MFIs. RMK is the third player providing loans to NGOs for on lending to the SHGs promoted by women.
FUNDING AGENCIES

We have Housing and Urban Development Corporation (HUDCO), National Backward Classes Finance Development Corporation (NBCFDC), National Minorities Finance Development Corporation (NMFDC), Oxford Committee for Famine & Relief (OXFAM), Canadian International Development Agency (CIDA), Action Aid, CARE India, International Fund for Agriculture Development (IFAD), UNDP, British Department of Foreign and International Development

SCALABILITY

With a market-led approach and genuinely efficient operations, there is no reason why NGOs cannot achieve capacity building and economics of scale. NGOs should refocus their energies on capacity-building and institutional development.
Bank Rakyat Indonesia (BRI) state owned unit and the Badan Credit Desa (BCD), the village banks of Indonesia in Indonesia use the financial system approach to microfinance and all had remained profitable throughout the economic crisis.

SOCIAL INTERMEDIATION

The unique aspect of Grameen Banks minimalist credit strategy is not its financial intermediation of credit for the poor but its social intermediation. Credit for the poor women would change the social equations. Education, health, family setup and annual income tend to be positively associated with autonomy and authority indices. Local commercial banks have limited understanding of the

dynamics of microfinance practices, and therefore see MFIs as

unattractive customers. The only ready sources of adequate capital are global financial institutions.

NEW COMPETENCIES

NGOs will need to develop a range of new skills and

competencies in learning, bridging, mediation, dialogue and influencing. NGOs current focus on narrow management

issues, acquiring skills valued by donors and traditional

concepts of lobbying, need to be replaced by a broader base of capacities which include the ability to listen to, learn from

and work with others at both local and national levels. NGOs
need to develop ways of working that are less focused on promoting their own profile, and more concerned with building alliances and working with others in a collaborative way.

SHIFT

Innovations in markets and economics will demand much

greater detail form NGOs in their analysis and proposals,

without losing the power of grassroots testimony. Moving form development as delivery to development as leverage is the

fundamental change that characterizes this shift.