© Foundation for Sustainable Development, 2009

Pustikar Samiti’s Self-Help Group Initiative

By Jason Caya

April 2009

2 May 12, 2009

Overview

Introduction

Evaluation

Observations

Conclusions

Suggestions

Summary

Closing

3 May 12, 2009

1. Introduction

Jason Caya’s Background:

Jason graduated from the University of Michigan in 2006 with a Bachelors in Business Administration. Since graduation, he has been working in the United States. First, at a consulting firm that specialized in growth strategies for Fortune 1000 companies. Then, in the nonprofit sector soliciting donations through grants, corporate sponsorships, and individual contributions. Jason came to India with the Foundation for Sustainable Development to gain experience in international development and microfinance.

4 May 12, 2009

1. Introduction (continued)

About the Foundation for Sustainable Development (FSD):

The Foundation for Sustainable Development partners with more than 200 community-based organizations throughout Asia, Africa, and Latin America to support sustainable change. Specifically, FSD partners with several community-led organizations in Jodhpur to offer opportunities for interns, volunteers, and donors to make a lasting contribution at the community level. FSD works in seven overlapping development areas – microfinance, health, environment, youth and education, women’s empowerment, community development, and human rights.

5 May 12, 2009

1. Introduction (continued)

Jason + FSD = Pustikar Samiti:

primary purpose was for Jason to gain exposure to a successful microfinance operation. Additionally, Jason sought to identify opportunities for Pustikar Samiti to improve their effectiveness in fulfilling their mission.

As a new partner of the Foundation for Sustainable Development, Pustikar Samiti was chosen as Jason Caya’s host organization for his 12-week stay in Jodhpur, India. From February 6th, 2009 until April 22nd, 2009, Jason collaborated with the Pustikar Samiti Branch at Baba Nadi to evaluate the Self-Help Group Initiative started 3-years ago. The

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Jason interviewed 5 members of the Pustikar Samiti staff for 30 minutes each

May 12, 2009

2. Evaluation

Staff Interviews:

Mr. Amar Chand Purohit, Chief Executive

Mr. Ragendra Purohit, Branch Manager

Mrs. Anjoo Hersh, Supervisor

Mrs. Babita Verma, Field Officer

Mr. Prateek Purohit, Computer Operator

7 May 12, 2009

2. Evaluation (continued)

Self-Help Group (SHG’s) Interviews:

Jason interviewed 5 clusters of Pustikar Samiti’s self-help groups at different locations

Gandhi Ashram – 3 SHG’s

Sursagar – 17 SHG’s

Mandore – 10 SHG’s

Digari – 6 SHG’s

Ghoronka Chowk – 5 SHG’s

8 May 12, 2009

2. Evaluation (continued)

Additional Interviews and Site Visits:

Interviewed Mr. M.K. Goyal of NABARD

Visited Sambhali Trust’s Setrawa Project, aimed at providing free education and a sustainable handicraft business

Visited “SAMBAL” Jodhpur, a organization for self-employment of women

Attended Sa-Dhan’s National Microfinance Conference 2009 themed “Microfinance Ecosystem – Equilibrium Between Growth and Effectiveness”

Researched and read best practices as determined by M-CRIL, SEWA, Grameen Bank, Sa-Dhan, and others

9 May 12, 2009

3. Observations

Staff Interviews:

Everyone is content and believes in Pustikar Samiti’s mission to help the poor.

There is a focus on keeping Pustikar Samiti profitable and growing.

There is more Pustikar Samiti could do to educate and train the SHG’s in terms of income-generating activities.

The current staff is the foundation of Pustikar Samiti’s SHG operation and more staff is needed to expand operations.

10 May 12, 2009

3. Observations (continued)

Self-Help Group (SHG) Interviews:

The women have been positively impacted through the establishment of a savings, freedom from local money, and the feeling of self-empowerment.

The SHG’s are not fully utilizing the loans available for income-generating activities (such as a micro-enterprise).

The likelihood of starting an income-generating activity greatly depends on the SHG’s education or previous work experience and the sense of unity felt by the group.

The women are very motivated to be educated, trained, and to begin income-generating activity.

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Microfinance institutions must invest in educating and training the SHG’s on income-generating activities or partner with NGO’s that can offer education and training.

Microfinance must involve offering a complete spectrum of financial services – savings, loans, insurance, etc.

Microfinance institutions need to be profitable but the first priority must be their true mission of helping the poor.

Microfinance institutions must listen more closely to what the SHG’s want and need.

May 12, 2009

3. Observations (continued)

Additional Interviews and Site Visits:

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SHG’s are loyal, save regularly, and repay 95% of loans.

SHG’s have established a savings, have been freed from local moneylenders, and feel empowered.

Pustikar Samiti is financially strong.

Pustikar Samiti’s staff is happy and dedicated.

Pustikar Samiti has access to potential new SHG’s.

Pustikar Samiti has a good reputation in the community.

Pustikar Samiti offers a range of financial services such as savings, loans, and insurance.

The SHG branch of Pustikar Samiti performs very well compared to other Pustikar Samiti branches.

Strengths

Weaknesses

Opportunities

Threats

May 12, 2009

4. Conclusions

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SHG’s struggle to start income-generating activities due to lack of education and training.

Pustikar Samiti approaches and trains every SHG the same but each SHG is unique and has different needs.

The ideal SHG model is often not followed and that leads to an inability by the group to reach their potential.

Pustikar Samiti’s method for tracking SHG’s is fragmented and could easily break down.

Pustikar Samiti is highly dependent on the current staff and must hire more staff to expand operations.

Pustikar Samiti’s future business goals and strategy lacks detail and the reasoning is not transparent.

Strengths

Weaknesses

Opportunities

Threats

May 12, 2009

4. Conclusions (continued)

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SHG’s have shown great interest in income-generating activities but need more education and training.

SHG’s would like more financial products from Pustikar Samiti (e.g. Education loans).

Pustikar Samiti could benefit greatly from increased advertising and marketing.

Capital will be easily accessible for Pustikar Samiti due to on-going government support and the current investor sentiment.

Technology (i.e. mobile phones) can rapidly reduce the cost of doing business and help reach even more people.

There is an a huge, untapped market for micro-financial services in Rajasthan and beyond.

Strengths

Weaknesses

Opportunities

Threats

May 12, 2009

4. Conclusions (continued)

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Improvement in the quality of life is not guaranteed each time a SHG is formed.

Pustikar Samiti must focus on creating quality SHG’s and not just creating more SHG’s.

Current SHG’s could be lost due to high interest rates and a lack of attention from Pustikar Samiti.

External conditions (e.g. drought, famine, or disease) could undermine Pustikar Samiti’s entire operation.

Strengths

Weaknesses

Opportunities

Threats

May 12, 2009

4. Conclusion (continued)

16 May 12, 2009

5. Suggestions

Implement a Sustainable Livelihood Approach with SHG’s:

Regular saving by SHG’s is not the ultimate goal of Pustikar Samiti... more must be done for SHG’s to reach their full potential and engage in income-generating activity.

Independently implement this

approach

NGO partner implements this

approach

Investment needs to be

made in staff, training, and

internal processes

Find a NGO that

specializes in a holistic approach to

poverty alleviation

Continually work with SHG’s to

create viable, sustainable source of income

Focus on core

competency of providing services to

SHG’s

OPTION 1

OPTION 2

17 May 12, 2009

5. Suggestions (continued)

Process of Implementing a Sustainable Livelihood Approach:

Assess SHG’s quality of life

and continually monitored

Educate and train SHG’s

based on their background and interest

Research linkages between

groups and the market

Invest in hiring staff

and extensive training on sustainable livelihood

Invest in improving internal

system for tracking SHG’s

Partner groups to

create leverage

and identity or brand

go to market

Monitor progress and continue support

Chief Executive and

Board of Directors

approve, set goals, and re-

assess

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Select a method of

evaluation for the SHG’s

Regular saving by SHG’s is not the ultimate goal of Pustikar Samiti... saving regularly is not the only indicator of how well a SHG is doing.

May 12, 2009

5. Suggestions (continued)

SHG’s Must Be Evaluated and Tracked:

NABARD method: assess SHG’s in a simple, but effective manner. Focus is on functionality of the SHG (i.e. group size, attendance at meetings, loan recoveries, etc.).

SEWA method: assess SHG’s using questions developed by SHG members themselves. Focus is on full employment and self reliance.

Grameen method: assess SHG’s based on how well members’ families are living (i.e. housing, education, nutrition, etc.). Focus is on poverty alleviation.

Develop the Pustikar method: asses SHG’s using any combination of the methods above or develop a method entirely independently.

19 May 12, 2009

5. Suggestions (continued)

Process of Evaluating and Tracking a SHG:

Chief Executive and

Board of Directors

approve, set goals, and re-

assess

Invest in hiring staff

and extensive training on the

chosen method of evaluation

Invest in improving internal

system for tracking SHG’s

Evaluate each SHG

Collect results and identify

thriving SHG’s as well as struggling

SHG’s

Use thriving SHG’s to

educate and train new or struggling

SHG’s

Re-evaluate in 1 year

Distribute quarterly

newsletter with

information and helpful

tips for SHG’s

Re-train struggling

SHG’s

Re-evaluate in 6 months

20 May 12, 2009

6. Summary

Pustikar Samiti

Positive: Profitable, Good Reputation, and Dedicated Staff

Negative: Internal SHG Tracking is Weak, Staff is Over-Utilized, Strategy Lacking Transparency and Thoroughness

Self-Help Groups

Positive: Saving Regularly, Free from Local Moneylenders, Feel Empowered

Negative: Struggle with Income-Generating Activity, Every Group Does Not Reach Their Full Potential

Suggestions

Implementing a sustainable livelihoods approach is highly recommended

Evaluating and tracking each SHG is also highly recommended

21 May 12, 2009

22nd April, 2009

Dear Pustikar Samiti,

Thank you for hosting me during my stay in India. You have a very impressive organization. I fully support your mission and the effort you have taken to achieve that mission. Nonetheless, please take my suggestions into consideration. I believe there is a great future for Pustikar Samiti and all of the amazing women in your self-help groups. Good luck!

Sincerely,Jason Caya

7. Closing