sarvodaya nano finance

7/27/2019 Sarvodaya Nano Finance

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GREETINGS TO ALL

ON BEHALF OF

THE SHGsWHO ARE THE OWNERS OF

THIS UNIQUE INSTITUTION


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Genesis of the OrganizationAssociation for Sarva Seva Farms (ASSEFA- an NGO Registered

under the TamilNadu Societies Registration Act, 1872 in the year

1969) started working with rural communities based on the conceptsof Sarvodaya and empowerment of the rural communities

adopting the multi-sector approach for development.

Started working with the State Government in the IFAD funded

initiative for the betterment of women through Self Help Groups.IFAD funded TamilNadu Womens Development Project came to a

close in 1999 but thousands of SHGs in scattered locations were in

need of continuous & easy access to credit.

SHGs were federated at the block level into Mutual Benefit Trusts.The legal status of the Federations is private mutual benefit trusts

which can have transactions only with its members.

The bye-laws of the Mutual Benefit Trusts were specially designed

to allow them to invest in Corporate entities & to borrow from F.I.s


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Evolution of the Federations There are gatherings of womens SHGs at the village and cluster

level but they do not play the role of financial intermediaries.

At the block level the SHGs are federated into MBTs. Each SHGhas to pay a one-time admission fee, fill an Entrance form and

execute the inter-se agreement to become a member of the

Federation. The SHGs constitute the General Body of the Trust.

Three of the Board of Trustees of the MBTs are filled up bynomination from the different project constituents of ASSEFA like

Dairy, Education, Health etc.; four by election from the SHGs in

the General Body; and two from the public by co-option.

The SHGs give their concurrence in the form of a resolution to theproposal to utilise the community resources (in the form of Project

grants, matching grants, etc.) to invest in the shares of corporate

entities. The savings of the members of the SHGs is not accessed

by the federations at any stage of the process.


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Evolution of the Federations (Contd.)

The Mutual Benefit Trusts acquired the shares in Sarvodaya Nano

Finance Limited by utilising the community resources meant for

the benefit of the SHGs.

The limitations of the MBTs in raising external borrowings were

understood and the need for a different entity to take on this

borrowing responsibility was felt.

The Community resources are used as seed money for leveraging

bigger loans.

Sarvodaya Nano Finance Limited takes on the responsibility for

raising loans from financial institutions to meet the credit needs ofthe women SHGs.

Sarvodaya Nano Finance Limited starts borrowing funds from

institutions like SIDBI.


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Structure of SHG Federation

Block Level Entity

Cluster level

(Non financial)

Shareholder in NBFC (Tax Paying entity)

Members of

General Body

of SMBT

Members

Self-Help Groups

Village level

Self-Help Groups

Cluster level

Members

Self-Help Groups

Village level

Self-Help Groups

Cluster level

Members

Self-Help Groups

Village level

Self-Help Groups

Cluster level

Sarvodaya Mutual Benefit Trust

(Private Mutual Benefit Trust)

Sarvodaya Nano Finance Limited

Non Banking Financial Company


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Organisation Chart of the Mutual Benefit Trust

He is also the Manager(Business Development)

of the NBFC in the block

Self-Help Groups

Field Officers

(30-40 SHGs)

Self-Help Groups

Field Officers

(30-40 SHGs)

Self-Help Groups

Field Officers

(30-40 SHGs)

Self-Help Groups

Field Officers

(30-40 SHGs)

CEO

(Appointment)

Chairperson

(Nomination)

Board of Trustees(Nomination, Election & Co-option)


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Nature of relationship between the NBFC & the MBTs The MBTs have a unique relationship with the NBFC as they are

the members in and borrowers from the NBFC.

The Company not only takes care of the credit needs but also themore important role of Capacity Building of the MBTs. Thesupport for the MBTs constitutes 80 % of the CB support budget.

The MBTs are independent legal entities with a Board of Trustees.Though the operational level matters at the trust level are handledindependently, the MBTs look up to the NBFC for support andguidance on policy matters.

But the lender-borrower relationship is on commercial basis and itis quite clear and unambiguous.

Loans are based on Loan Agreements, applications and thedecision of the Loan Committee.

Delayed payments are not condoned and they attract penal charges.

Monthly reports from the MBTs need to be sent without delay.


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Rationale

Poor women become members of Self Help Groups

Self Help Groups become members of Federations of SHGsi.e Mutual Benefit Trusts by paying a one-time admission

fee.

The federations have the legal status of Mutual Benefit

Trusts. The Mutual Benefit Trusts are members i.e. de-jure

shareholders of Sarvodaya Nano Finance Limited.

Only MBTs that are shareholders of the Company are

eligible for loans from the Company.

The quantum of loan will depend, inter-alia, the shareholding

of the trust in the Company and the Net Worth of the

Company as per the NBFC norms.


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Methodology

The SMBTs prepare the Business Plan for the respectivefederations and this is finalised in consultation with the

Company staff. The Business Plan includes details of thevillages covered, existing and planned SHGs, creditrequirements etc.

Sarvodaya Nano Finance Limited consolidates the Business

Plans of the trusts and prepares the overall Business Plan forthe Company.

Sarvodaya Nano Finance Limited borrows funds fromexternal sources.

Sarvodaya Nano Finance Limited enters into a LoanAgreement with the Mutual Benefit Trust.

Sarvodaya Nano Finance Limited lends to the Mutual BenefitTrusts in accordance with the Loan Agreement and a LoanApplication.


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Methodology (Contd.)

The Mutual Benefit Trust enters into a Loan Agreement with the

SHGs.

The SHGs apply for a loan under a specific product backed by a

resolution.

Then they lend to the Self Help Groups based on the Loan

Agreement, Loan Application and the results of the GradingExercise.

Utilisation Certificates confirm the appropriate usage of the loan

at the member level.


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Salient Features of Operations

Loan Committees at the MBT & the Company decide the

sanction and quantum of loan.

Grading of SHGs done by external staff, in a participatory

manner.

Independent Appraisal of Loan Applications.

Grades of the SHGs as well as their age, quantum of savings,rotation of savings etc. taken into account.

Uniform software for all the Trust Locations

All loan disbursements through cheques only.

All loan repayments are done only at the Trust Office; no cash

repayment to field staff is allowed.


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Salient Features of Operations (Contd.)

Savings of members of SHGs are not accessed by theFederations.

Standardised loan agreement and application forms.

Standardised documentation procedures for

transactions at all levels. The MBTs file their annual IT returns and also pay

taxes wherever due.

The surplus from the credit operations are utilised for

creating a Reserve in the MBT and the balance is

allocated among the member SHGs.


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About the NBFC

Sarvodaya Nano Finance Limited


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VISION


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`

To transform Sarvodaya Nano Finance Limited intoa truly community owned Micro-Finance Institution

that will instantly symbolize a fair, client - friendly,accessible, and transparent institution.


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MISSION


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To facilitate easy and timely access to credit and other financial services for the rural population

especially poor women and rural artisans through anetwork of Mutual Benefit Trusts located in their

vicinity.


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Management

Board of Directors

Shri Vijay Mahajan

Shri Deep Joshi Ms. Bharti Gupta Ramola

Shri S. Loganathan Shri S. Viswanatha Prasad


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Key Dates

Certificate of Incorporation : 1 July 1996

Certificate of commencement of Business:

10 October 1996

Registration as NBFC with RBI: 19 August 1999

Commencement of operations in TamilNadu :

13 July 2001


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Detailsof Coverage

No. of States : 1

No. of districts : 10

No. of Trusts : 27

No. of villages : 2812

No. of Self-Help Groups : 4065

No. of members in Self-Help Groups : 74601


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Staff Composition

Staff at Headquarters : 10

SNFL Staff in field locations : 20

Staff on field training : 6

Total : 37

Staff employed by the Trusts : 191


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Highlights of Performance 2002-03

No. of SMBTs Assisted - 20

No. of SHGs loans given - 2975 Loan Outstanding (31.03.03) - 970.14 lakhs

Loan Disbursed (2002-03) - 1833.67 lakhs

Profit Before Tax - 5.86 lakhs Operational Self Sufficiency 184 %

Financial Self Sufficiency 111 %

Operational Efficiency 10.1 % Operational Efficiency 4.79 %

(excluding MBT Expenses)


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Credit Operations

No. of Trusts assisted : 20

No. of SHGs assisted : 2975

No. of Individual borrowers : 34285

Rs.

Amount of Loan Issued : 1833.67 lakhs

Average Loan Size

(Per Individual Borrower) : 4601/-

Loan Demand : 1142.23 lakhs

Loan Repayments : 1136.83 lakhs

Loan Outstanding (Cumulative) : 970.14 lakhs

On-Time Repayment Rate : 99.53%


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Loans planned and released

202.

3

137.

9 17

5.

76

164

.24

17

7.

45

168.

40

1

87.

33

193.

70

192.

65

1

88.

05

227.

7

281.3

9

113.

94

126.

53

89.

07

195.

34

168.

82

193.

89

80.

75

142.4

3

76.

54

168.

05

162

.65

31

5.

67

0

50

100

150

200

250

300

350

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Rs.

inlakhs

Loans planned Loans released


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Savings and Internal Rotation

Savings and Internal Rotation

0

1000

2000

30004000

5000

Rs.

inlakhs

Savings Internal Rotation Interest earned

Savings 491.23 605.70 709.92 812.99 917.55

Internal Rotation 2517.34 2992.88 3138.71 3422.94 4000.31

Interest earned 251.99 279.15 284.19 304.34 315.51

April June Sep Dec Mar-03

Sh C i l


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Share Capital

68.8357.17

64.83

31.19

25.85

19.59

84.73

10.75

14.42

14.06

11.58

2.81

6.00

23.68

8.30

1.10

14.18

18.90

0.66

12.22

0.5

50.00

gingee

Rishivandayam

sankarapuram

kallakurich

chinnasalem

thyagaduragam

vriddachalam

achirapakkam

vandavasi

anakkavur

vembakkam

sivagangai

alangudi

narikudi

nilakottai

tirumangalam

viralimalai

vadugapatti

individual

kalligud

natham

Virudunagar


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Share Capital & Loan Outstanding

462.22

4

806

.95

420.16

470.98

1365

73

3.38

482.79

1665

72

8.82

543.73

2311.08

9

70.14

0

500

1000

1500

2000

2500

Rs. in lakhs

ASON

30-06-02

ASON

30-09-02

ASON

31-12-02

ASON

31.03.03

Share Capital and Loan O/S

SHARE CAPITAL LOANS DISBURSED LOANS OUTSTANDING


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Repayment Performance

2311.0

8

1142.2

3

1136

.83

99

.53%

0

500

1000

1500

2000

2500

Rs.

inlakhs

Loans

sanctioned

Demand Collection OTRR

H th d th C dit


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How they used the Credit

House Repairs

2%

Manufacturing

36%

Animal Husbandry

5%

Micro Enterprise

21%Family Functions

18%

Manufacturing

36%Clearing old loans

5%

Education

2%

Medical

3%

Agricuture

3%

B i Pl f 2003 04


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Business Plan for 2003-04

A. Trusts to be assisted : 30

S.H.Gs to be assisted : 4500 Individual Borrowers : 58,520

Rs.

B. Share Capital : 100 m

Borrowings (Cumulative) : 146 m

C. Disbursement : 327.82 m

Average Loan Size : 5601 D. Year end Outstanding : 206.25 m

E. Total Income : 21.69 m

Operational & Other Costs : 19.11 m

F. Profit : 2.59 m


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Projections for 2003-04

No. of SMBTs to be assisted 30

Paid up Equity Share Capital -- 720 lakhs

No. of SHGs to be assisted -- 4500

No. of borrowers to be assisted 58520

Total Loans to be disbursed -- 3278.23 lakhs

Average loan size per group -- 72850

Average loan size per member -- 5602

External Borrowing (2003-04) -- 930 lakhs

Cumulative External Borrowing -- 1503.90 lakhs

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