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Bal-Mahila Vikas Samiti : VAMA impact study of Micro Finance initiatives by SPJIMR

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VAMA is a non profit organisation started in 1988 in gwalior by Mr. Indra Bhushan Verma and this is a major organisation working in the field of women empowerment, micro finance and rural health services.

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Bal-Mahila Vikas Samiti : VAMA impact study of Micro Finance initiatives by SPJIMR

  1. 1. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 THE EMPOWERED WOMAN An Impact Assessment of VAMA’s Microfinance and other Development Programs An assessment of the long-term, sustainable impact on women, households and communities of VAMA’s Microfinance, Financial Literacy and Aasha programs through a survey of 100 women and in-depth interviews SHREEJA DASH SPJIMR DOCC Project Report 4th March – 13th April 2013
  2. 2. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 CONTENTS Acknowledgement Executive Summary A. Background 1 B. Problem Definition and Framing 2 Context SWOT Analysis Problem Statement Problem Objective C. Methodology 4 Scope of the project Field work executed Primary data collection and community interaction D. Impact Assessment Survey 7 Survey Design and Objectives Assumptions Profile of groups Survey Results and Analysis E. Programmes and Concluding Remarks 9 Financial Literacy Programs Aasha Training Programs Conclusion Recommendations F. Individual Contribution 15 Appendix
  3. 3. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 The report is based on research conducted between March and April 2013 as a part of the DOCC Project with Bal-Mahila Vikas Samiti. ACKNOWLEDGEMENTS We thank Mr. Indra Bhushan Verma and all the staff of VAMA who gave us support and guidance without which this report could not have been completed. We are also grateful for the patience of and time taken out by over 100 VAMA members – both old and new, for participating in the survey, and for the insights given by officials of banks and other organizations. Special thanks to Mr. Bharat Parekh, INBAR for his valuable comments on our findings. Lastly, we are grateful to DOCC Committee and SPJIMR for organizing this memorable
  4. 4. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 EXECUTIVE SUMMARY The report assesses the long-term, sustainable impact on women, households and communities of the microfinance program of Bal Mahila Vikas Samiti (BMVS or VAMA) operating in Gwalior district, Madhya Pradesh. Impact of some of the other development programs under VAMA such as financial literacy and Aasha training programs have also been discussed. Other recommendations for the organization regarding its operations and product portfolio have also been suggested. Regular collection and communication of comprehensive impact assessment data to funding agencies would help secure steady flow of funds. Both quantitative techniques – a survey of 100 women from a representative set of from villages and urban slums, and qualitative techniques - in-depth interviews and client satisfaction survey, were used to assess the impact of the microfinance program. The variables examined for assessing impact were economic factors – income changes, vulnerability reduction, asset growth and accumulation, outcome level of enterprises; socio- political factors – change in power relationships and shift in economic decision making and personal factors such as women empowerment. As compared to the control group the target group (members of VAMA microfinance for one loan cycle or more, with similar demographic background) reported: · On a household level: annual household incomes were higher by 39322; ownership levels for assets of moderate value was higher (not significant for assets of modest or high value); there were more sources of income per household (reducing vulnerability) · On an individual level, women reported higher levels of involvement in decision making in households and higher levels of confidence in dealing with figures of authority · On an enterprise level, loans were used to start new micro-enterprises and expand on or invest in existing ones. Product cycles shortened and vulnerability of businesses decreased. Recommendations: · Regularly measure impact of programs and communicate results to key stakeholders, donors and funding agencies and appoint dedicated fundraiser to stem shortage of funds · Introduce a performance measuring system and enhance operational capabilities through training and incentives · Increase initial and subsequent loans amount to arrest customer dissatisfaction (promises made during initial meeting are not being met) and also to enable clients to start new small businesses · Implement a document management system to ensure clarity of goals and processes. · Periodically measure effectiveness of development programs through both quantitative and qualitative techniques. · Adopting fair HR practices and independent auditing
  5. 5. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 A. BACKGROUND Bal-Mahila Vikas Samiti (VAMA) Bal-Mahila Vikas Samiti (VAMA) is a non- profit organization established in 1988 and registered under Madhya Pradesh Societies Registration Act 1973. With a staff strength of 40 (Appendix 1: Breakup of staff by job positions), VAMA works for disadvantaged social groups such as Dalits, tribals, women, working children and other deprived classes on areas as diverse as capacity building, livelihood generation, awareness about land rights and women’s rights, health and sanitation, gender equality, financial literacy and microfinance (Appendix 2: List of Programs and Activities in 2012). After two decades of social development work in the economically backward and drought-prone Chambal-Bundelkhand region of Madhya Pradesh, VAMA started its microfinance program in 2006. Profits from the VAMA group of colleges and the Microfinance Unit, leave a comfortable surplus that can be reinvested in these units or directed to the non-income generating Programmes Unit (Appendix 3: Balance Sheet). However, the microfinance and the Programmes units are still largely dependent on donors and other funding agencies (Appendix 4: List of Donor Agencies). A five year Strategic Business Plan outlines the mission, vision and strategy to achieve 50,000 active clients by 2018. “To establish an egalitarian society based on rights so that the poor, marginalized and dalits - especially women, have equal participation in all spheres.” – VAMA Mission Statement MICROFINANCE PROGRAM SOCIAL DEVELOPMENT PROGRAMS VAMA GROUP OF COLLEGES § Operational in 189 villages and 47 urban slums of Gwalior district since 2006 § Loan portfolio: Rs. 3,11,58,000; average loan size of Rs. 7514 § No of groups: 1316; Active clients: 2276, members: 6881 § Women Empowerment § Financial Literacy Health & Nutrition § Natural Resource Management § Livelihood Promotion § Rural Education § Female Feticide § Domestic Violence § Colleges offering BBA, BCA, B.Com, B.Sc (Bio) § ANMnursing school in Datia district for training women to be nurses § Approved by IndianNursing Council,New Delhi and recognized by Mahakaushal Nursing Council, M.P Programs under Bal MahilaVikas Samiti / VAMA
  6. 6. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 APPROACH/STRATEGY USED, PROGRAM, LOCATION & BENEFICIARIES, AND OTHER STAKEHOLDERS, STAFF COMPETENCY, FINANCIAL HEALTH, EFFECTIVENESS B. PROBLEM DEFINITION AND FRAMING CONTEXT OF THE PROJECT As previously mentioned, VAMA operates in the backward and geographically remote Gwalior – Chambal region of MP. According to the 2011 census, the sex ratio in these areas is quite low (Bhind and Morena: 822/1000, Gwalior: 862/1000; Datia: 875/1000). SWOT ANALYSIS PROBLEM STATEMENT The report assesses the long-term, sustainable impact on women, households and communities of the microfinance program of Bal Mahila Vikas Samiti (BMVS or VAMA) operating in Gwalior district, Madhya Pradesh. Impact of some of the other development programs under VAMA such as financial literacy and Aasha training programs have also been discussed. Other recommendations for the organization regarding its operations and product portfolio have also been suggested. PROBLEM OBJECTIVES Though VAMA’s programs – both microfinance and development, have been running for several years, the reports and the data collection (often done by field executives) was
  7. 7. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 insufficient to get a true picture of the impact of their programs on the lives of these beneficiaries. As competition over funds from donors and funding agencies intensifies, communicating the full impact of VAMA’s interventions in terms of social goals achieved (beyond just loan portfolio size and number of active clients) would help secure a larger, steadier flow of funds. Regular communication of such achievements and milestones can not only help them attract new clients, but may also help check the high rate of attrition by motivating staff. C. METHODOLOGY SCOPE OF THE PROJECT The report assesses the long-term, sustainable impact on women, households and communities of the microfinance program of Bal Mahila Vikas Samiti (BMVS or VAMA) operating in Gwalior district, Madhya Pradesh. Impact of some of the other development programs under VAMA such as financial literacy and Aasha training programs have also been discussed. Due to scheduling conflicts and other constraints (as March was the closing month for this year, many development programs had already been completed for the year. As such we could observe only certain programs). Also, due to the limited number of women we interacted with for Programmes Unit, only qualitative techniques such as interviews have been used. Other recommendations for the organization regarding its operations and product portfolio have also been suggested based on field observations, conversations with staff and officials. Regular collection and communication of comprehensive impact assessment data to funding agencies would help secure steady flow of funds. FIELD WORK EXECUTED A total of 19 days were spent on the field observing the various processes and activities of VAMA and interacting with beneficiaries. (Appendix 4: Details of Field work executed) PRIMARY DATA COLLECTION AND COMMUNITY INTERACTION Over the course of 6 weeks, we spent 19 days in the field and collected data from over 100 women for the MF unit; interviewed a group of 20 women for the financial literacy program; interviewed a mix of Aasha trainees and trainers and other field staff and organizations officials. Details of the primary data collection for Microfinance Program are included in Section D of the report. Also, the details of the tools used for assessment have been included in appendix 3.
  8. 8. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 C. IMPACT ASSESSMENT SURVEY VAMA’s Microfinance (MF) program gives loans to women for the following purposes: dairy, agriculture, microenterprises, services and house repair & maintenance. As of 2012, VAMA has provided access to capital to 18,128 low-income households in 189 villages and 47 urban slums in Chambal region of Gwalior district, MP. Currently the marketing for the microfinance program is through grass root marketing, word-of-mouth and client recommendations. SURVEY DESIGN AND OBJECTIVES By combining both qualitative and quantitative techniques, the report assesses long term, sustainable changes in the lives of women, and on other identifiable units of analysis such as households, organizations, communities. Impact can be either positive or negative but equally important (Blankenberg, 1995). Standardized data was collected as part of the Impact Survey while in-depth dialogue with clients and case studies were used as qualitative tools of assessment. ASSUMPTIONS · Those choosing to join the program are similar to existing clients in terms of demographic background, motivation, and business experience and thus offer an appropriate and easily identified comparison group. · All the data recorded from the survey was recorded as it is without any efforts to verify the statements of the women. Hence, we are assuming that the data provided by the participants is generally accurate and reliable. A total of 107 (Target group: 57; Control group: 42, 8 profiles rejected for incomplete/inaccurate data) from a representative set of villages and urban slums of Gwalior district participated in the survey. The participants were informed of the purpose and the voluntary nature of our survey which was conducted in Hindi. As mentioned in the assumptions, the data has not been verified. Thus, there is a risk of inaccuracies due to problem of recall, insufficient knowledge of the respondent etc. PROFILE OF SAMPLE POPULATION In a comparative study, ensuring that the target group and the control group have similar demographic backgrounds (external factors such as age, literacy), business experience and motivations (both joined VAMA, only the number of months they’ve been a member of VAMA is different) is important to ensure that these external factors are not biasing the results.
  9. 9. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Fig 02: Slightly older participants of target group Source: Impact Assessment Survey, 2013 § Difference in “>40” category could be because clients over 50 are not allowed toform new groups but can continue if already in an existing group § Could bias results in favor of TG as olderwomen have more experience, more time to develop skills and accumulate assets Fig 01: Similar levels of literacy for both target and control groups Target Group Control Group Source: Impact Assessment Survey § Illiterate or primary schooledwomen: 73% for TG vs. 74% for CG. § No significant bias expected due to literacy levels Fig 03: Borrowing from sources other than VAMA § Low levels of borrowing from other sources. Respondents depend on friends (part of “Others”) and family membersfor loans. § Informal moneylenders have not been replaced by VAMA MF evenin TG. The TG is reaching out to more diverse sources of finance – banks and other MFIs (Samhita MF) § High and unsustainable (loan amount > annual income) levels of indebtedness observed in 2 TG households § Average loan size for TG: Rs 7906 (not including two outliers); CG: Rs. 2967Source: Impact Assessment Survey, 2013 Target Group Control Group
  10. 10. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Fig 04: Change in income as compared to previous years Source: Impact Assessment Survey, 2013 § More TG respondents (22 percentage points) reported increase in income over lastyear § Indicates economic success of VAMA’s intervention, or at the very least increased optimism and confidence about income Table 01: Higher average household and household income/ person for TG SURVEY RESULTS AND ANALYSIS ECONOMIC FACTORS: INCOME CHANGES VULNERABILITY REDUCTION Diversifying income and vulnerability reduction In the Bundelkhand region, where there is a period of drought every two to three years, income from farming and allied activities is especially vulnerable. As such, income from Average annual household Income ( ) Average annual household income per person ( ) Target Group 183441.38 38668.95 Control Group 144119.05 36490.79 Difference 39322.33 2178.16 ECONOMIC FACTORS SOCIO-POLITICAL / CULTURAL PERSONAL / PSYCHOLOGICAL § Income changes § Vulnerability reduction § Asset growth § Outcome of level of enterprises § Change in power relationships (status positions) § Shift of economic decision making from men to women § Political empowerment § Womenempowerment § Psychological strength due to financial health and strength Factors and variables for measuring impact of microfinance programs
  11. 11. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Fig 05: Multiple sources of income reduces vulnerability of TG Source: Impact Assessment Survey, 2013 § Both TG and CG have an average of two working members per family, but TG has higher number of sources of income leaving it less vulnerable to shocks other sources, and more importantly income from multiple sources, becomes especially important. Even in urban households, an extra source of income reduces vulnerability to shocks such as the bread-earner falling ill. Sector of activity Most of workers from both groups are either wage earners or work in the construction industry. Some of the most popular occupations are constructing roofs, sewing and trading (small kirana stores). (Appendix 5: Survey Results - Sector of Activity Details) ASSET ACCUMULATION AND GROWTH For the target group, 41% of the assets of modest value, 50% of assets of moderate value and 33% of assets of high value were acquired when they were a member of VAMA Microfinance. One of the limitations of the survey was not recording other assets such as cell phones, coolers etc, which were more common to these households than bed with frame and radios. A more comprehensive survey could also track house and land ownership. Household assets -> Modest Value Moderate Value High Value Radio, cycle, chair/table, gas/stove, bed with frame. Fridge, TV, Motorcycle Car / pickup truck, tractor Target Group 2.45 / 5.00 1.95 / 3.00 0.03 / 3.00 Control Group 1.75 / 5.00 1.46 / 3.00 0.05 / 3.00 Difference SIGNIFICANT SLIGHT NEGLIGIBLE
  12. 12. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Fig 06: Use of Loan from VAMA by TG Source: Impact Assessment Survey, 2013 § Loans large enough for working capital to start microenterprises but not for small businesses. Some investment has to come from the client (distributes risk between lender and borrower). § The above chart shows the sector wise use of loan while the adjacent chart shows the purpose of loan. § Several clients have used loans to start, reinvest in businesses showing the effect of the loan on communities and the local economy Household Expenses Food was the most important component of the household expenditure for both the target group (TG) and control group (CG). For the TG, the second main priority was school expense followed by clothes. For the CG, the second highest expense was clothes followed by school expenses. Most respondents send their children to private schools to ensure a better education. Impact of Investment The analysis of investment impact shows that majority of VAMA borrowers perceived a positive impact on their investment. The impact mainly shows in terms of increase in income and savings. 65.5% of 22% 14% 20% 2% 13% 9% 7% 12% 0% 26% 19% 17% 4% 13% 6% 4% 11% 1% Food Clothes School Expenses Health-Related Cost Household Items Reinvest in enterprise Savings Others Don't Know 0% 5% 10% 15% 20% 25% 30% ControlGroup TargetGroup 65.5% 70.7% 25% 14.1% 28.1% 6.3% 25.0% Increase in Income Increase in Savings Expanded size of business Added new products Improved quality of products Reduced costs by buying in greater volume Developed a new enterprise
  13. 13. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Source: Impact Assessment Survey, 2013 Source: Impact Assessment Survey, 2013 Fig 08: What clients liked about VAMA’s MF Program § Interest rates are perceived to be lower than that of other sources. Clients also like that the loans provide themwith a steady source of capital. § “Others” include disbursement of loan on time, customer services and collection at home. Fig 07: Significantly higher participation in decision making for TG § Women in the TG households have shifted to self or joint decision making. § Small % of this could be attributed to difference in average age of TG and CG as elders have higher participation in rural households Target Group Control Group the respondents have noticed an increase in their income and 70.7% noticed an increase in their savings. SOCIO-POLITICAL/CULTURAL FACTORS Change in Power Relationships (Status Position) Apart from the quantitative data recorded in the survey, it was also observed that women in the target group were more forthcoming and confident in their conversations with the interviewer and other figures of authority – an observation that was confirmed with Field Executives (FEs) and Branch Managers (BMs) alike. Client Satisfaction Survey Knowing what features current clients value and what they would like to change would help VAMA design better products and services in the future. 46.6% 39.7% 3% 10.3% 34.5% 12.1% 22.4% 14% Lower Interest Rates Steady source of working capital Group dynamics Training or assistance Other financial services Easier guarantees than loan alternatives Others Don't Know
  14. 14. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Fig 09: What clients dislike / would like to be changed about VAMA’s MF Program § High rates of overall satisfaction with VAMA MF (54% respondents completely satisfied with the program). § Small size of initial and subsequentloans, different from whatwas earlier promised is biggest irritant § Some clients feel that compulsory savings and insurance are forced. This is a story of howan illiterate, single mother struggled against all odds to work towards her passion. The colorful bangles that now lie before her are testament to her hard work and the life changing impact that a little help can have on the lives of women like her. She is a source of inspiration for women in her community and has successfully advised other women on their finances and for starting new businesses (Appendix 7: Detailed description of in-depth interview with Badami) Badami (55 years), Madhav Nagar, Gwalior. § One of the oldest clients of VAMA’s MF Program § Head of her nine member household § VAMA’s loans have helped her successfully start her own bangles selling business and save more than Rs. 10,000. § She now dreams of owning a fridge and building two additional rooms in her house. Microfinance Case Study: Badami, Anmol Joint Liability Group 3.4% 17.2% 3.4% 3.4% 1.7% 12.1% 53.4% 13.8% High interest Size of loanstoo small Loan cycle too short or long Meeting frequency too often or meetings too long Forced savingsor insurance Others Nothing Don't know
  15. 15. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 E. DEVELOPMENT PROGRAMS AND CONCLUDING REMARKS DEVELOPMENT PROGRAMS: FINANCIAL LITERACY A group of 20 women were interviewed about their experience with the financial literacy program. Most women said that they were not able to save and that the program had no impact on their financial habits. Some were too shy to answer our questions. DEVELOPMENT PROGRAMS: AASHA TRAINING Aashas were satisfied with the training program and did not have any complaints and nor could they suggest any changes for the better. They pointed out that the extra income and more importantly, the respect that they get from their communities is the main reason why they continue to work as Aashas. Trainers reported that even illiterate women (generally about 8% of the trainees were able to become Aashas through support network of their families and neighbors (asking others to record, especial attention given to these women during training). The trainers felt the need for more regular training to reinforce concepts. The Women’s Day Celebration, though a step in the right direction was also plagued with several problems such as poor organization (guest speakers cancelled at the last minute, women had to wait for hours in the sun for the program to start; a significant proportion of the event was taken up by a single woman promoting a certain religion which had no bearing on women’s issues). CONCLUDING REMARKS POSITIVE IMPACT As gleaned from our in-depth interview with Badami, successful women play a key role in their communities – they encourage other women to start new businesses, to cut down on
  16. 16. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 unnecessary expenditures etc. Also, as the primary decision makers in their households, they act as role models in their respective communities. NEGLIGIBLE / POSITIVE IMPACTS Turning to moneylenders or friends and family would not end because of the microfinance program (since the money lenders offer convenience and often larger size of loans). The unsustainably higher levels of indebtedness as reported by two of the TG respondents can push these clients into a cycle of debt. VAMA’s microfinance program generally caters to the low-income households, and not poor households (as observed from reported household level incomes). The beneficial impact of VAMA’s work in the social development field is not as visible due to the problems mentioned before. RECOMMENDATIONS Based on our findings from this report and our observations from field visits, the following actions can be considered to improve VAMA’s Microfinance Program. 1. FINANCE AND FUNDRAISING Rationale: At the core of the problem of the microfinance programs, is lack of access to a steady flow of funds. The microfinance program is not self-sustaining, as in new loans cannot be generated based on just the repayments and the current savings accounts of the members. The Andhra crisis has resulted in a shortage of funds flowing to microfinance programs pressurizing growth of VAMA’s MF portfolio, especially since 2009. As can be observed from the Client Satisfaction Survey, most of the dissatisfaction stems from the loan size. VAMA has taken a conscious decision to use their limited funds to increase outreach rather than increase loan amount (in group meetings, a gradual increase is promised to the client per cycle depending on good group behavior and timely repayment). For securing additional funds, most of the work is done by the Executive Secretary, Mr Indra Bhushan Verma who also handles VAMA Group of colleges, the Programmes Unit and oversees operations and other functions of the organization. Solution: Since fundraising is an important and time-consuming activity, one that is currently constraining the growth of VAMA and contributing to higher levels of dissatisfaction (both MF and Programmes), appointing a dedicated fundraiser for the organization would add more value as compared to the cost. 2. Performance Management System Rationale: From discussions with branch managers (BM) and field executives (FE), we discovered that FEs can without much effort achieve the current targets of securing five new
  17. 17. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 client groups per month. The high demand and the strong brand image and word to mouth marketing results in groups approaching the office themselves. Several women from the newly formed groups complained about the delay in starting the group. FEs are often unable to handle the number of requests for group formation. Solution: For these reasons, we recommend establishing Key Performance Indicators (such as number of new groups formed; collection time rather than just the portfolio size and number of groups serviced) for Field Executives and providing additional incentives such as increments in salary etc based on these indicators. This would arrest the high rate of attrition in the organization, especially at the lower levels. Also, it would motivate the field executives to reach out to more clients, and improve the overall client experience and lifetime value. 3. Adopting good business practices Rationale: Two children under 14 years of age were being employed as office attendants. For an organization that claims to work towards the elimination of exploitation of vulnerable sections, it is absolutely unacceptable that child labor is employed. Moreover, one of these employees was not being paid on time (salary outstanding for three months). Also, the internal auditing is done by a relative of a member of the board. Solution: Though cost cutting is an important priority for a perennially cash strapped organization, fair employment conditions are a must. Independent audits reduce the chances of an unbiased picture of the health of an organization 4. Business Development Services Rationale and Solution: Currently, VAMA leverages on its brand (developed through the ongoing social development programs in the area). Some existing programs such as Financial Literacy modules can also be offered to existing clients to strengthen the overall microfinance program. This would also help address early on the problems with clients with high and unsustainable levels of indebtedness. VAMA is also considering partnering with INBAR and other NGOs in the area to promote alternative income-generating activities such as bricket making (from residual ash of chulhas). As observed from the survey data (sector of activity, use of loans), several women in an area are pursuing similar income-generating activities. As such, providing them with technical training etc can benefit these clients enormously.
  18. 18. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Retail Financial Services · Consumer Loans · Savings Product · Insurance Products Greater coordination (staff hours, funds) would be required between the Programmes and the MF Unit. 5. Document Management System Rationale: Some of the key documents of the organization such as the business development plan and the operations manuals have several contradictions and discrepancies in the data. Information such as target number of clients and new processes need to be communicated in a consistent and clear manner. Solution: As such, all documents need to be regularly updated with key information and other data points such as “Last updated”, “Prepared by” and “Reviewed by”. 6. Outreach and increase of loan amount Rationale: As mentioned previously, the outreach targets per FE are not ambitious enough to be able to reach the goal of 50,000 active clients The results of this survey showed that 32% and 21% of the target group and control group respectively received credit from sources other than VAMA MFI. VAMA should increase its efforts to reach out to clients and to increase the loan amount given to individual clients. 7. Development of new products A wider product portfolio such as insurance and emergency loans (would further reduce vulnerability of clients to shockc) addressing the needs of the clients – both existing and future, can help both VAMA and the clients. VAMA should consider conducting feasibility studies on the development of insurance and leasing products. 8. Enhancing of operational capabilities In order to increase client volumes, managing larger loan portfolios and to introduce new products, VAMA’s operational capabilities have to be enhanced. The productivity of loan Business Development Services · Financial Literacy · Business Training /Technical Assistance · Access to markets · Bank Linkages Microfinance Microenterprise Development
  19. 19. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 officers need to be enhanced through training and incentive programs. The current cost structures need to be reassessed to allow for competitive pricing. Staff training on MIS system is also needed to ensure higher productivity and internal control. 9. Measurement of Effectiveness As observed in some programs, the beneficiaries are not getting the desired benefit from the intervention. A periodic review and measurement of effectiveness of development programs through both quantitative and qualitative techniques, would help track the impact of the program. F. INDIVIDUAL CONTRIBUTION Though all the work – including field visits, meetings, report writing – was done as a team, I would like to highlight the following areas of my contribution to this project: § Interviewed VAMA’s field executives and Bank of India’s Branch correspondent – Narayana Singh Rana about financial literacy modules and bank linkages program § Prepared rough structure of questions for the in-depth interview with Badami Bai, whose success story is highlighted in the report. § Helped design impact survey questionnaire based on AIMS (Assessing the Impact of Microenterprise Services) – SEEP (Small Enterprise Education and Promotion) Network Manual. Revised questionnaire as per suggestions of the NGO.Surveyed 40 women participants (20 TG, 20 CG) from urban slums and villages on the outskirts of Gwalior district. § Attended all field visits and took notes and transcripts for interviews and on the field observations. § Addressed a gathering of around 50 women on issues regarding education and women empowerment at the International Women’s Day program in Raura village. § Designed questionnaire for and interviewed Aasha trainees and trainers at Datia district § Along with my fellow team mate, I presented our preliminary findings from the impact survey results to Mr.Dr. I. V. Ramanuja Rao, Programme Director, INBAR, Mr. Bharat Parekh, Programme Officer, INBAR, officials from NABARD and several other NGOs from the state. § Training Needs Assessment Form
  20. 20. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 REFERENCES § Internal Documents from VAMA: o VAMA Annual Report 2011-2012 o VAMA Operations Manual o VAMA HR Manual o VAMA Accounts Manual o VAMA Strategic Business Plan 2012-2017 o Financial Progress Monthly Report o Operational Progress Monthly Report o SMERA MFI Rating report September 2010 o CRISIL Microfinance Grading Report August 2009 Publicly available data can be accessed at <http://vamaindia.org/> § “State of the sector report 2011”; Microfinance India; Accessed on March 2013; <http://www.microfinanceindia.org/download_reports/sos_2011.pdf> § Microfinance Impact Assessment and Market Research Survey-UNRWA – Microfinance Department – Syria § M-CRIL Microfinance Review 2012: MFIs in a Regulated Environment § Microfinance Market Survey in the West Bank and the Gaza Strip conducted by Planet Finance § Microfinance and Poverty Alleviation: An Impact Assessment Survey By RBS Foundation § “Learning from Clients: Assessment Tools for Microfinance Practitioners, The SEEP Network”; Accessed on March 2013; < http://pdf.usaid.gov/pdf_docs/PNACJ138.pdf> Appendix 1. Breakup of staff by job positions Staff Strength: 40 (as of 31 March 2012) § CORE TEAM (2nd line management) - 06 § MIS and ACCOUNTS (Office level management) - 06 § Program support staff and Project staff - 10 § Field Executives - 12 § VAMA Group of College Faculty - 06
  21. 21. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 List of Programs and activities for 2012
  22. 22. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Appendix 4: Details of Field Work Executed No. Days Area Details 1 3 Kale Kar Bai Ki Goth Tehsil, Gwalior District. Observed group formation process for 3-4 groups in urban slums 2 2 Morar District Observed collection process for 10-15 groups 3 1 Kale Kar Bai Ki Goth Tehsil, Gwalior District. Followed the same group for group recognition test with Branch Manager, Deepal Malhotra and Field Executive, Punita. 4 1 Morar Field investigation process with Branch Manager, Deepal Malhotra and Field Executive, Madan 5 1 Raura village, Gwalior Women’s Day Event – Were guest of honor and main speakers. Creating awareness on female feoticide. 6 1 Datiya Aasha training. Observed training process. Talked to five trainees, three trainers and VAMA officials in charge of the five-day residential training program. 7 1 Dabra Financial Literacy program. In-depth interviews with a group of 20 women and VAMA field executives in charge of the program 8 1 Berja Interview with Branch correspondent of Bank of India, Berja branch 9 1 Veerpur Girwai In-depth interview with Badami Bai 10 4 Shreeja: Around 20 urban slums in and around Gwalior and Morar district Impact Assessment Survey – 40 respondents.(20 target group, 20 control group) 11 4 Noorain: Around 20 urban slums in and around Gwalior and Morar district Impact Assessment Survey – 40 respondents.(20 target group, 20 control group) 12 1 VAMA, Gwalior Office Disbursement process 13 2 VAMA, Gwalior Office Attended two day seminar by INBAR on financial security of NGOs and rural livelihood generation and presented findings of our impact survey. Bharat Parekh – Country Head INBAR Appendix04: Tools for data collection Tool § Microfinance Impact Assessment Survey § Social Security Survey § Asha Questionnaire § Financial Literacy Questionnaire § MFI Questionnaire § Audio of the interview with Ms.Badami
  23. 23. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Appendix 6: Survey Results – Sector of Activity Details Appendix 7: Detailed description (edited transcript) of in-depth interview with Badami Badami’s husband left her and her two sons very early on, leaving her to fend for herself and her family. She worked in an industry as a labour, earning 50 per day for working more than 12 hours. It was hard work and the long commute and work hours left her with very little time with her family. In this time of need, her father built a house for her and her family – the one in which she still lives. Though she was very grateful for the help that she received from her family, she did not feel comfortable in continuing to depend on them. With the meager earnings her family struggled to meet ends and soon her two sons had to drop out from school – having studied only till classes 5th and 7th. They started working as
  24. 24. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 daily wage earners for constructing roofs. She regrets that she was not able to afford a better education for her sons but says that it was a necessary step to ensure the welfare and survival of her family. It was in 2006 – when VAMA’s Microfinance program was just being launched - that Badami heard about the organization and its work from Bharti, an Aanganwadi worker from her area. Soon she joined several other women in her community to form a self help group – Anmol. She had never taken a loan from any other source before, so this was a novel experience for her. She received her first loan of 5000. Badami had always wanted to open a bangles’ shop but realized that the current loan amount was too little for starting this business. So she used her first loan to do sewing work, working diligently to pay back the installments and accumulate some savings. With her savings and a second loan of 10,000, she was able to open a bangles’ shop. Her business grew steadily and she her business generates a profit of 2500 per month. With the third loan of 15000, she bought more materials for her shop. She sets up shop (on a thela rented for 20 per day) only three or four times a year – on days of major festivals such as Diwali and KarvaChauth and as and when local melas are organized. She is able to sell the other bangles from her home itself as many women come to her to buy bangles. She is thus able to spend the entire day with her family and especially cherishes the time spent with her grandchildren. Her daughter-in-laws help around with household chores and do sewing work while her sons now have their own business for constructing roofs. She remembers a time when she did not have any assets besides her house. With her increased income, she was able to buy a television, a cooler and a fan. Though her own sons, as victims of circumstance, could not finish school she has ensured that her grandsons get the very best of education. They now study in a private school. She has more than 10000 of savings in a Post Office account. She has talked to many women in her community about the benefits of taking such a loan and of savings. Women look up to her and have often come to her for advice and for help. She encouraged and advised another woman in her neighborhood, who has now started a successful vegetable store.
  25. 25. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 She now dreams of owning a fridge and building two additional rooms on the roof of her house. Appendix 5: Contact details of people and organizations interacted with during DOCC project work Sr. No. Name Designation & Organization 1 IndraBhushanVerma CEO, VAMA 2 Nilofer Khan COO, VAMA 3 SarveshDhingra Finance Manager, VAMA 4 Deepak Malhotra Branch Manager, VAMA 5 Shanno Khan ABM, VAMA 6 MadanKushwaha ABM, VAMA 7 Dr. I. V. RamanujaRao Programme Director, INBAR 8 Bharat Parekh Senior Programme Officer, INBAR 9 Narayan Singh Rana Branch Coordinator, Bank of India
  26. 26. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 LIABILITIES 2011/12 2012/13 1 Share Capital (Schedule 1) Upto Last Year 7225067.98 9307325.13 During Current Year 0.00 2243.00 LESS Share withdrawn 0.00 25195.00 9284373.13 2 Security Deposits (Schedule 2) Upto Last Year 0.00 0.00 During Current Year 0.00 0.00 LESS Withdrawals 0.00 0.00 0.00 3 Savings with MAC (Schedule 3) 0.00 0.00 Upto Last Year 0.00 0.00 During Current Year 0.00 0.00 LESS Savings Withdrawn 0.00 0.00 0.00 4 Outstanding Borrowings (Sch 4) Upto Last Year 34096044.69 24526399.46 Borrowings Current Year 11959108.73 4918875.00 LESS Amount Repaid 21528753.96 13264741.73 16180532.73 5 Short Term Borrowings Upto Last Year 1069108.00 1505181.00 Borrowings Current Year 4477997.00 1930633.00 LESS Borrowings Returned 4041924.00 4183293.00 -747479.00 NET SURPLUSES 2082257.15 380433.00 35338905.59 25097859.86 ASSETS 2011/12 2012/13 1 Share Capital Upto Last Year 0.00 0.00 Share Paid up Current Year 0.00 0.00 0.00 2 Deposits Upto Last Year 1770118.00 1860665.69 During Current Year 190547.69 70546.00 LESS Saving Deposit Refund from ASP 100000.00 547134.00 1384077.69 3 OS Loans with Members (Sch 5) Upto Last Year 26916616.00 17103696.00 Current Year Loans 32897897.00 13392662.00 LESS Repayments 42710817.00 21032776.00 9463582.00 4 Advances Outstanding Upto Last Year 5142379.00 4094884.00 Advances Current Year 6060568.00 9061029.87 LESS Advances Recovered 7108063.00 5539650.74 7616263.13 5 Fixed Assets (Schedule 6) Upto Last Year 6363634.25 6100566.20 This Year 51745.00 85036.74 LESS Depreciation 314813.05 114327.00 6071275.94 6 Closing Balance Cash on Hand 2395847.00 4159.00 Bank Balance 3783246.70 392668.10 396827.10 35338905.59 24932025.86
  27. 27. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 LIST OF PROJECT FUNDING BY THE DIFFERENT AGENCY S. No Name of Funding Agency Ref. on Sanction letter date Amount Sanction Amount Released Status of the project 1 CIDA (ICCCO) 38-17-1-39 (GEF) Dated April 30.2001 10,99,628.00 10,89,664.00 SAMARTH “Women’s Empow erment prog.”2 year Program started in April 2001 and completed in march 2003 2 NABARD ND.BPL/MCIC/11925/SHS Gs. 21/2000-01.Dated 14 March 2001 2,25000.00 2.22500.00 SHG “Bank Linkage Program “2 year Program started in April 2001 completed in march 2003 3 IGSSS SP/142 (MP-11) 02.W- 17/48 Dated 09.08.2002 5,87,100.00 5,87,100.00 Community Development Program. 6month started in October 2002 and completed in march2003. 4 WATER-AID #3090 and WAI No. 335 Date20 January 2003 7,69,437.00 7,69,437.00 AABHAS “Water & Sanitation Program” one year Program started in April 2003 and completed in March 2004. 5 NEG NEG/MP/(186)/1246 March 22,2002 3,52,650.00 3,52,650.00 DASTAK Innovative pilot project on primary education started in April 2002 completed in March 2003. 6 SPK&SS, New Delhi RCH Project Ref No./786/SPK& SS/RCH/SCOVA-111/GWI. Dated 20.04.2002 3,19,423.00 3,19,423.00 Reproductive & Child health programme.”3 year Program started in April 2002. 7 FORRAD F-137/2000- Projects (30) dated 02 November 2000 2,40,000.00 2,40,000.00 Community Land Development Program started in November 2000 and completed in April 2001 8 BUTTERFLY BF/NRWWS/190/01 DATED 07/08/2001 45,000.00 45,000.00 Published Bal News Paper 3 volumes published completed in March 2002 9 NCSTC (DST) CO/TR/528/98 Dated 11/01/99 59,100.00 59,100.00 Workshop on explaining Miracle for ruralyouth started on 25/07/99 and completed on 14/08/99 10 CAPART WSD/MPR/ 17/10/1998 Dated 4 March 2004 56,28,817.00 22,74,158.00 Community Watershed Management On-Going 11 WATER-AID #3090 and WAI No.335 Date 20 January 2004 10,24,317.00 10,24,317.00 AABHAS “Water & sanitation Program” ONE- YEAR extension, completed in June 2005. 12 SIDBI BHBO/126-27 /SFMC/ VAMA/LOAN 24.12.2008 50,00.000 TL 5.90,000 Grant 50,00,000 Tl 50,00,000 5.90,000.00 50,00,000 Fund for empowerment of SHGs 13 CARITAS,INDIA Women empow erment through Skill development 46,500.00 46,500.00 Ghatigaon block of Gwalior dist. 14 CARE -CASHE Micro-finance Institute 5,44,328.00 5,44,328.00 Working in Gw alior dist. As a Micro finance Institutions w ith local banker and SHGs groups. 15 DFID (PACS) Violence against women 42,00,000.00 42,00,000.00 As a Lead NGOw orking in Vidisha and Sagar Dist. With the support of 4 nos. FNGOs 16 MNGO Reproductive & Child Health Govt. of India, Ministry of Health and Family Welfare 15,00,000.00 approx. 2,00,000.00 As a mother NGOw rking in Datia district. 17- CARE -CASHE Micro-finance Institute 3,62,000.00 3,62,000.00 Working in Sagar & Vidisha dist. As a Micro finance Institutions with local banker and SHGs groups. 18 FWWB, AHMEDABAD Micro-finance Institute 2,30,00,000 2,30,00,000 Fund for empowerment of SHGs/JLGs 19. ICICI BANK LTD Micro-finance Institute 30,00,000.00 30,00,000.00 Revolving fund for empowerment of SHGs 20. State Bank of INDIA Micro-finance Institute 100,00,000.00 100,00,000.00 Revolving fund for empowerment of SHGs/JLGs 21. CARE-RLF Micro-finance Institute 50,00,000.00 30,00,000.00 Revolving fund for empowerment of SHGs/JLGs 22. MPSACS F/AIDS/TI/NGO/09/01-07 dated 02-01-2009 12,27,800.00 12,27,800.00 Targeted Intervention Project among Female Sex Workers 23 Manaveeya Holding Sanction Dt. 10-09-2009 1,00,00,000 1,00,00,000 Fund for empowerment of SHGs/JLGs 24 IDBI Bank Sanction Dt. 23-06-2010 50,00,000 50,00,0000 Fund for empowerment of SHGs/JLGs 25 Indian Bank Sanction Dt. 23-06-2010 25,00,000 25,00,000 Fund for empowerment of SHGs/JLGs 26 CASA April 2010 18,00,000 18,00,000 Reinforcing women for sustainable livelihood in morar block of Gwalior district 27 MPSACS BHOPAL April 2010 to Jan 2011 185,354 185,354 Targeted Intervention Project at Mandsour 28 MPVHA (Save the Girl Child) April 2010 to Jan 2011 25,000 25,000 Movement against declining female sex ratio in district Gwalior 29 RMK Feb 2011 75,00,000 75,00,000 Fund for empowerment of SHGs/JLGs
  28. 28. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 Performance Indicators Up to Dec -12 13-Jan Cumulative Outreach No of State 1 1 2 No of District 1 1 2 No of Block 2 2 4 No of Branches 1 1 2 No of Villages 189 189 378 No of Semi urban Location 47 47 94 No of SHG's/JLG's/Grameen/Others (Specify Group Type SHG/JLG) 777 778 1555 No of SHG's/JLG's /Grameen/Others (Specify Members Type SHG/JLGMembers) 3829 3734 7563 Credit Operation Total Disbursal Amount 2555000 1,828,000.00 4,383,000.00 Disbursement % Achieved as per B.P Average Loan Size 9941.634241 11,078.79 10,386.26 Total Disbursal Group (Specify Group Type………………………………..) 0 778 778 Total Disbursal Members (Accounts) (Specify Members Type……………………….) 257 165 422 No of Active Loanee 1256 165 1421 Loan Outstanding Amount to Field 8957129 9,463,615.00 18,420,744.00 No of Loan/Field Officer 5 4 9 Loan Outstanding/Loan Officer 1791425.8 2365903.75 2046749.333 Overdue Status (Overdue Amount/No of Overdue Account) Overdue Amount of Less than 30 days 2666 5166 7832 Overdue Members of Less than 30 days 3 2 5 Overdue Amount of Less than 60 days 1833 1833 3666 Overdue Members of Less than 60 days 2 2 4 Overdue Ammount of more than 90 days 1000 1000 2000 Overdue Members of more than 90 days 1 1 2 Overdue Amount of more than 120 days 43073 48345 91418 Overdue Members of more than 120 days 10 5 15 Demand/Collection Status Demand Principal 1304147 1,300,460.00 2,604,607.00 Principal Collected (Excluding prepayment) 1301484 1,295,294.00 2,596,778.00 Prepayment Collection 17166 18,922.00 36,088.00 Demand Interest 177117 191,357.00 368,474.00 Interest Collected 169214 182,787.00 352,001.00 Current Repayment Rate (In %) 1470696.841 1478079.732 2948777.786 Overdue Pricipal Amount 58117 58117 Saving Total Saving Amount 0 0 External Borrowing (Agency Wise) 1 State Bank of Inda 5000000 5,000,000.00 10,000,000.00 2 SIDBI 5000000 5,000,000.00 10,000,000.00 3 Ananya Finance for Inclusive Growth Pvt. Ltd. 23000000 23,000,000.00 46,000,000.00 4 Indian Bank 2500000 2,500,000.00 5,000,000.00 5 Rashtriya Mahila Kosh 7500000 7,500,000.00 15,000,000.00 6 BASIX-LAMP Fund 7500000 1,500,000.00 9,000,000.00
  29. 29. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 External Outstanding (Agency Wise) 1 State Bank of Inda 229385.73 220,389.73 220,389.73 2 SIDBI 1668000 1,549,000.00 1,549,000.00 3 Ananya Finance for Inclusive Growth Pvt. Ltd. 1944644 1,805,755.00 1,805,755.00 4 Indian Bank 1363198 1,405,388.00 1,405,388.00 5 Rashtriya Mahila Kosh 5638063 5,300,000.00 5,300,000.00 6 BASIX-LAMP Fund 5638063 1,500,000.00 1,500,000.00 Source: Operational Performance Report, VAMA
  30. 30. VAMAMicrofinance and Programs – An Impact Assessment SPJIMR DOCC Project Report 2013 VAMA (Bal-MahilaVikasSamiti) 9-C, MaharanaPratap Nagar, Near Jiwaji Club, Gwalior- 474009 Madhya Pradesh, INDIA Telephone: +91-751 2457438 Email: bmvs1988@yahoo.co.in vama1988@rediffmail.com Website: www.vamaindia.org.

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