community investment fund & cbos in andhra pradesh. an impact study
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Community Investment Fund & CBOs In Andhra Pradesh. An Impact Study. Sponsored by Society for Elimination of Rural Poverty Government of Andhra Pradesh. Conducted by Centre For Organizational Excellence Hyderabad. PURPOSE OF THE STUDY. To assess - PowerPoint PPT PresentationTRANSCRIPT
Community Investment Fund & CBOs In Andhra Pradesh.
An Impact Study
Sponsored by
Society for Elimination of Rural Poverty
Government of Andhra Pradesh
Conducted by
Centre For Organizational Excellence Hyderabad
PURPOSE OF THE STUDY
To assess The impact of CIF in capitalisation of CBOs
and better financial management. The role of CIF in enabling the Poorest of the
poor and poor SHG members to access adequate credit to improve their economic condition.
To focus on the trickle down effect of CIF on socio-economic empowerment of the members.
HYPOTHESES
Impact of CIF on CBOs CIF as a major contributing factor for capitalization in CBOs, capitalization is
the result of better management of CIF CIF is instrumental in leveraging bank funds and achieving self-sufficiency
for CBOs CIF has a great role in institution building CIF as a catalyst New micro finance interventions could not have been possible without CIF
Impact of CIF on Members. POP and poor women members of SHGs are made credit worthy Micro Credit Plans have helped in accessing funds for the livelihoods of the
POP and Poor at lower rates of interest CIF and bank linkages have resulted in increasing incomes of POP and poor CIF is effective as catalyst for poverty reduction initiatives for POP and poor
HYPOTHESES
The Study also aimed at exploring: Common use/purposes of loans by members Similarities and critical differences in the utilisation of
loans with specific reference to source of funds Changes in the process of administration of CIF
STRATEGY & PROCESS FOR IMPACT ASSESSMENT
In order to validate the hypotheses ,4 level sample study involving
- Individual Members-SHGs- VOs and MSs in three districts is undertaken. Individual members from SHGs are called
treated members and non-members are called control members.
Two treated members from each SHG; Four SHGs from each VO; Four VOs from each Mandal; Two mandals from each of three districts constituted the sample size
Administration of Specially prepared questionnaires for each of the samples.
Specially trained study team visited the individual members at their residences; enquired with them, administered the tools and recorded their observations
In CBOs data was collected from the books of accounts, and available information besides enquiry and observation.
STRATEGY & PROCESS FOR IMPACT ASSESSMENT (Contd.)
DETAILS OF SAMPLE
Districts covered are - Ananthapur, Nellore,
Warangal No. of treated members - 205 No. of Control samples - 129 No. of SHGs - 94 No. of VOs - 24 No. of Mandal Samakhyas - 6
CIF & THE MEMBERS OF SHG - IMPACT
In order to study the hypothesis that poorest of the poor and poor members are made credit worthy, the study covered a population of members of SHGs called treated group and another population of non members called control group.
To validate set hypotheses, examination in the following aspects was done.
Access to group loans by the members The quantum of loan accessed The quantum of loan accessed for IGA purposes The quantum of loan accessed for Consumption purposes The quantum of loan accessed through Micro Credit Plans The loan accessed for IGA purposes by POP, poor and non-poor The loan accessed for IGA purposes by illiterates and literates The change in external debt of members and non-members The change in income of the members both treated and control The change in assets of the members both treated and control
TREATED MEMBERS –MAJOR CHARACTERISTIC FEATURES
• Majority of the treated members are aged between 26 to 35years.
• About 63 per cent are illiterates.• 44 per cent belong to SC and 10 per cent to
ST communities.• The unmarried and the divorced constitute
1% each and widows constitute 8% of the population
• 79% are nuclear (non-joint) families.• 48% are POP and 2 per cent non-poor.• 4% are with disability.• 88% own houses.• 35% are leaders of Self Help Groups.
TREATED MEMBERS - LIVELIHOODS
S No Livelihood No Percentage
1. Not working (due ill health/old age) 13 6.34
2. Agriculture 19 9.27
3. Agri. Labour 118 57.56
4. Dairy 06 2.93
5. Handloom 07 3.41
6. Dhobi 05 2.44
7. Tailoring 05 2.44
8. Small Business 05 2.44
9. Cobbler 01 0.49
10. Private Employment 01 0.49
11. Others 25 12.20
Total 100.00
DURATION OF MEMBERSHIP IN SHG
S No Duration No Percentage
1. Less than One Year 16 7.80
2. 1 to < 2 years 35 17.07
3. 2 to < 3 years 51 24.88
4. 3 to < 4 years 26 12.68
5. 4 to < 5 years 14 6.83
6. 5 years and above 63 30.73
Total 205 100.00
TREATED MEMBERS - ACCESS TO CREDIT
05,000
10,00015,00020,00025,00030,00035,000
POP Poor Non-Poor
Average Amount of Loan Taken byAmount
TREATED MEMBERS – ACCESS TO CREDIT
All treated members accessed credit. 84 %of population availed loans for Income
Generating Activities also. Average Amount of loan availed by members is
Rs.24068. Average Amount of loan for IGA Rs. 16500. Average Amount of loan for consumption Rs.10225.
( is 62% of the average IGA amount or 38% lower than for IGA)
Average Amount of loan accessed for IGA by POP and Poor are Rs.10997 & Rs.15829 respectively.
Average IGA loan accessed through MCP by POP and Poor Rs.13499 & Rs.19888.
TREATED MEMBER – AVERAGE AMOUNT OF LOAN VS LENGTH OF MEMBERSHIP
INCOME FROM SPECIFIC IG ACTIVITY.
IGA specific Income
Increase S No
IGA No
Avg. Loan
Taken Rs.
At Present
2 years before
Amount %
Annual increase
on Investment
1. Dairy 63 17230 7476 4964 2512 51 14.58%
2. Sheep and Goat 34 13264 4070 2000 2070 103 15.60%
3. Small Business 23 15591 10504 6804 3700 54 23.73%
4. Agriculture 29 17473 10784 9500 1284 14 7.34%
5. Others 23 18637 2861 1368 1493 109 8.01%
TREATED MEMBERS – OUTSTANDING LOANS OVER TWO YEARS
S No Loan Item Before 2
years Rs. At Present
Rs. Increase %
1. Average outstanding loan from SHG 2,600 8,563 5,963 229
2. Average outstanding external debt 13787 17,646 3859 28
The members of SHGs also access loans from other sources
Outstanding loans from SHGs registered 229% increase while the external debt also increased by 28% which signals remarkable improvement in creditworthiness of the members.
TREATED MEMBERS – SOURCES OF EXTERNAL DEBT.
Sources of External Debt to Treated Members
0 10 20 30 40 50 60 70 80
Bank
Finance Company
Money Lender
Employer
Local land lords
Friends / Relatives
Others
No.
TREATED MEMBERS IMPACT ON INCOME & ASSETS
S No Income / Asset Before
two years Rs.
At Present
Rs. Increase %
1. Average Family Income of SHG member 15,992 24,701 8,709 54
2. Average Family Gross Assets of SHG member 73,885 1,27,600 53,715 73
3. Average Family Movable Assets of SHG member 9,244 22,121 12,877 139
Average SHG Member Profile
0
20000
40000
60000
80000
100000
120000
140000
Family Income Gross Assets Movable Assets2 Years Before
At Present
VALIDATION OF HYPOTHESES-MEMBERS OF SHG
Foregoing slides from 14 to18 validate the hypotheses that POP and POOR members of SHG are made creditworthy and accessed credit including CIF chiefly from SHG
In a span of two years they increased their incomes and assets also by accessing loans for IGAs through a process called MCP
CONTROL MEMBERS – CHARACTERISTIC FEATURES.
Majority of the control members are below 35 years of age (71 %)
About 71% illiterates. 60% belong to SC and 10% to ST communities. The unmarried and the divorced constitute 1%
and 2% respectively. 86% are nuclear families. 62% are POP,27% are Poor and 1% per cent non-
poor. 5% are with physical disability. 79% own a house.
CONTROL MEMBERS - LIVELIHOODS
S No Livelihood No Percentage
1. Not working (due ill health/old age) 11 8.53
2. Agriculture 09 6.98
3. Agricultural Labour 92 71.32
4. Dairy 00 0.00
5. Handloom 02 1.55
6. Dhobi 01 0.78
7. Tailoring 00 0.00
8. Small Business 03 2.33
9. Cobbler 00 0.00
10. Private Employment 01 0.78
11. Others 10 7.75
Total 129 100.00
CONTROL MEMBERS - LIVELIHOODS
Livelihood Pattern
0
10
20
30
40
50
60
70
80
90
100
Not working Agriculture Agricultural Labour Others
No.
CONTROL MEMBERS – EXTERNAL DEBT
S No Livelihood No. of
members No /
Amount Rs. Average Rs.
%
1. No. of control members accessed external credit
105 81 %
2. Total external debt borrowed 105 1895700 18054
3. External debt outstanding before 2 years
42 7,28,500 17,345
4. External debt outstanding at present
99 16,67,700 16,845
5. Decrease in average external debt by control member
500 03 %
•While presently 99 have outstanding borrowings,only 42 members borrowed loans two years before.• Average external debt is Rs. 18054.
CONTROL MEMBERS – SOURCES OF DEBT
CONTROL MEMBERS – IMPACT ON INCOME & ASSETS
S No Income / Asset Before 2
years Rs. At Present
Rs. Increase %
1. Average Family Income of control member 9,661 15,107 5,446 56
2. Average Family Gross Assets of control member 30,542 44,657 14,115 46
3. Average Family Movable Assets of control member 3,641 6,696 3,055 84
Average Control Member Profile
0
10000
20000
30000
40000
50000
Family Income Gross Assets Movable Assets
2 Years BeforeAt Present
ACCESS TO CREDIT – BOTH TREATED AND CONTROL MEMBERS
S No Income / Asset Treated
Members Control
Members
Treated
%
Control
%
1. Average amount of loan accessed 24,068 16,502 100 69
2. Average outstanding loan from SHG before 2 years 2,600 100 0
3. Average outstanding loan from SHG at present 8,563 100 0
4. Average outstanding external debt before 2 years 13,047 5,647 100 43
5. Average outstanding external debt at present 17,646 12,928 100 73
6. Percentage Increase / decrease in outstanding loan 28 129
7. Total debt raised 49,20,900 18,95,700
8. Present outstanding debt 36,17,400 16,67,700
9. Reduction in debt 13,03,500 2,28,000
10. Percentage decrease in debt 26.49 12.03
RATES OF INTEREST ON BORROWINGS FROM OTHER THANSHGs –BOTH TREATED AND CONTROL MEMBERS
Rate of Interest
Treated Control
Before two years
Present position
Before two years
Present position
(Rs. In lakhs) (Rs. In lakhs) (Rs. In lakhs) (Rs. In lakhs)
Up to 24% 23.74 (68.65%) 28.89 (79.85%) 4.83 (59.26%) 10.07 (59.62%)
25% to 36% 10.03 (29.01%) 6.95 (19.21%) 2.97 (36.44%) 6.28 (37.18%)
Above 36% 0.81 (2.34%) 0.34 (0.94%) 0.36 (4.42%) 0.54 (3.2%)
Total 34.58 36.18 8.15 16.89
CHANGES IN FAMILY INCOME & ASSETS- BOTH TREATED AND CONTROL MEMBERS
S No Income / Asset Treated
Members Control
Members
Treated
%
Control
%
1. Average Family Income before 2 years
15,992 9,661 100 60
2. Average Family Income at present 24,701 15,107 100 61
3. Average Family Gross Assets 2 years before 73,885 30,542 100 41
4. Average Family Gross Assets at present 1,27,600 44,657 100 35
5. Average Family Movable Assets 2 years before 9,244 3,641 100 39
6. Average Family Movable Assets at present 22,121 6,696 100 30
7. Increase in Average Family Income 8,709 5,446 100 63
8. Increase in Gross Assets 53,715 14,115 100 26
9. Increase in Movable Assets 12,877 3,055 100 24
CHANGES IN FAMILY INCOME & ASSETS- BOTH ( CONTD..)
Profile before 2 Years
0
10000
20000
30000
40000
50000
60000
70000
80000
Family Income Gross Assets Movatable Assets
Treated Member
Control Member
Profile at Present
0
20000
40000
60000
80000
100000
120000
140000
Family Income Gross Assets Movatable Assets
Treated Member
Control Member
Increase Pattern
0
10000
20000
30000
40000
50000
60000
Family Income Gross Assets Movatable Assets
Treated Member
Control Member
CHANGES IN FAMILY INCOME & ASSETS- BOTH ( CONTD..) The treated members are found better off
compared to control groups both in terms of annual incomes and their asset base.
The average family income of control members is about 60% that of the treated members both at present and two years ago.
The amount of average movable assets of control members was just 39 per cent of treated members two years ago and the same has come down to 30% at present.
The increase in average family income and movable assets of control members is just 63 per cent and 24 per cent that of treated members.
VALIDATION OF HYPOTHESES-MEMBERS (contd)
As compared to the control group, treated group members have access to higher credit including CIF and increase in assets,incomes is far higher.
Credit was accessed through MCP a systematic approach for Micro enterprises which is possible because of their being n the SHGs
VALIDATION OF HYPOTHESES (CBOs) –SHGs,VOs and MSs In order to test the hypotheses, financial
data such as owned funds Viz.,Thrift,Share capital,profits,Reserves for two years is collected and compared .
The access to CIF in the form of loans from MS to VO and VO to SHG net positions for current and previous FYs is collected.
Profitability is observed for measuring capitalisation in CBOs
This is evidenced by the following observations.
SHGs- CHANGE IN CAPITAL BASE
Capital Item 2004-05 2005-06 Change Percentage
Thrift 13,67,247 20,30,075 6,62,828 48
RF 4,98,000 7,11,000 2,13,000 43
SURPLUS 5,90,452 10,27,530 4,37,078 74
CAPITAL (OWN FUNDS) 24,55,699 37,68,605 13,13,906 53
VO Loan 14,25,461 37,91,929 23,66,468 166
Bank Loan 7,32,471 17,42,739 10,10,268 138
TOTAL SOURCES OF FUNDS
46,13,631 93,03,273 46,90,642 102
Change in Capital Base
0100000020000003000000400000050000006000000700000080000009000000
10000000
Owner Funds Total Funds
2004-05
2005-06
SHGs-CHANGES IN SURPLUS
Item 2004-05 Amount Rs.
2005-06 Amount Rs.
Change Amount Rs.
%
Income: 1189742 2084730 894988 Interest Income 1149278 1990618 841340 73 Other Income 40464 94112 53648 133 Expenditure: 599290 1057200 457910 Interest Expense 386443 732607 346164 90 Other Expenses 212847 324593 111746 53 Surplus (Income – Expenditure)
590452 1027530 437078 74
Change in Surplus over two years
0
500000
1000000
1500000
2000000
2500000
2004-05 2005-06
Income
Expenditure
Surplus
VOs – CHANGE IN CAPITAL BASE
Capital Base
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
Owner Funds CIF Total Funds
2004-05
2005-06
Capital Item 2004-05 2005-06 Change % Rs Rs Rs Share Capital 232258 376123 143865 62 Reserves 147818 488694 340876 231 Thrift 70886 167829 96403 136 CIF 4769199 6052131 1282932 27 Other Assistance 601807 460380 -141427 -30.72 TOTAL 5821968 7544617 1722649 29.59 CIF AS % OF TOTAL 82% 80%
VOs -CHANGES IN SURPLUS
Item 2004-05 Amount Rs.
2005-06 Amount Rs.
Change Amount Rs.
%
Income: 353121 855710 502589 142 Interest Income 270094 659281 389187 144 Other Income 83027 196429 113402 137 Expenditure: 238467 514834 276367 116 Interest Expense 156660 338929 182269 116 Other Expenses 81807 175905 94098 115 Surplus (Income – Expenditure)
114654 340876 226222 197
Change in Surplus
0100000200000300000400000500000600000700000800000900000
2004-05 2005-06
IncomeExpenditureSurplus
CBOs –FLOW OF CIF & CHANGES IN CAPITAL
Flow of CIF and changes in Capital Base
0100000020000003000000400000050000006000000700000080000009000000
10000000
2004-05 2005-06
2004-05 4769199 5821968 4613631
2005-06 6052131 7544617 9303273
CIF for VOs Capital Base of VOs Capital Base of SHGs
STUDY OF CBOs-MANDAL SAMAKHYAS Sample size:6 1.BRSamudram 2.Talupula
3.Podalakuru 4.Vakadu 5.Dharmasagar 6.Geesugonda
Share Capital : Rs.2.19lacs (in 4 MSs) Out of total corpus of Rs.682 lacs,CIF amount
of Rs.602.23 lacs constitutes 88.30%. Total loan outstanding to VOs are
Rs.515.04lacs as on 31.03.06 and profit is Rs.13.53lacs which is 2.63% of the loan outstanding and 2%of total funds.
MS (contd) CIF is received by the Mandal Samakhyas as
grant from DPMU and also in the form of recoveries from VOs where Vos received CIF directly from DPMUs in yesteryears.
CIF is pooled at MS level for continuous recycling and is done so through sanctioning loans to VOs on the basis of Micro Credit Plans at present.
VOs in turn dispense these funds to SHGs on the basis of MCP subprojects.
MS-contd At each level because of the varied
repayment schedules from MS to Vo;VO to SHG;and SHG to members there will be capitalisation because of float money
This augmented funds access by the POP and Poor
Surplus and capital base in SHGs increased by 74% and 53% respectively from previous f.y to current F.Y
Surplus and capital base in VOs increased by197% and 30% during corresponding period.
VALIDATION OF HYPOTHESES -CBOS The study observed and found that CIF is a
major contributing factor for capitalisation in CBOs
Increased capital,profits and surpluses in SHG,VO and MS prove better financial management including CIF
Increase in bank loans to SHGs is 58%in one year.Thus CIF a major factor in capitalisation of SHGs has also helped in leveraging Bank funds.
All these go to reflect a sound Institution building in CBOs
CIF and OTHER Micro finance interventions Food security and marketing activities are
taken up by 50% and 12.5%of 24VOs respectively from out of CIF amounts
Benefits of Food security are highly acclaimed by the members as revealed by enquiry.
Out of 205 treated members ,51%(105members )availed RCL and 46% reported increased consumption because of the scheme.
35%availed other commodities also and 47%experienced considerable reduction in cost
FINDINGS- BENEFITS ACCRUED TOMEMBERS FROM SHG MOVEMENT
Purchase of assets and increase in assets by 166 members (81%)
Availed loans for Children’s education105 members (51%)
Can contribute higher thrift amount 148 members (72%)
Gained more understanding about IGAs 178 members (87%)
Can handle Bank transactions 146members (71%) About 78% exhibited confidence to manage and run
CBOs, 37% for leadership and 42%for financial management.
ALL THESE VALIDATE THE INCREASED CAPACITY OF THE MEMBERS OF SHG AS COMPARED TO NON MEMBERS
VALIDATION OF ALL HYPOTHESES AT MEMBER LEVEL,AT SHG,VO ANDMS LEVEL
THE FOREGOING OBSERVATIONS AND FINDINGS TEND TO VALIDATE THE HYPOTHESES AT ALL LEVELS ABOUT COMMUNITY INVESTMENT FUND THAT FORM THE SUBJECT MATTER OF THE STUDY
WEALTH CREATION AT HOUSEHOLDS LEVEL IS CONTRIBUTED BOTH BY CIF AND BANK LINKAGES.