Submitted to: U-landshjelp fra Folk til Folk, Norge

Submitted to: U-landshjelp fra Folk til Folk, Norge 1 P a g e

Humana People to People India (Microfinance) Background Annual Report January to December 2013 Microfinance, or the system of formal institutional credit to the viable, but non-bankable poor, has proven to be an effective tool in financial inclusion and women s empowerment. The system, which delivers financial credit to poor women through the Joint Liability Group/Self-Help Group system, has proven to be a major catalyst in achieving the goals of financial inclusion of the marginalized communities, by providing unsecured loans to women for engaging in income-generating opportunities. Humana Microfinance as a project was started in November 2007 in Bansur block of Alwar district, Rajasthan. Since then it has grown manifold and operates under 15 Branches covering 577 villages by the end of December, 2013 in 10 districts of three states namely Rajasthan, Uttar Pradesh and Haryana and covering around 25,000 poor women to benefit from its micro credit program. Year 2013 has witnessed remarkable expansion drive across different geographical areas. Since January 2013, the microfinance project has expanded its activities to three states. In UP state, it has opened three new branches in Badaun, Bareilly and Ujjhani districts and another three branches in Mohindergarh, Rewari and Nangal Choudhery districts in Haryana state and four in Jhunjhunu, Sikar, Dausa and Alwar in Rajasthan. The expansion has allowed us to increase our outreach for many more poor women in India s some of the most poorest districts. The main activities of the project Operational Model: I. Formation of groups - Humana Microfinance team forms women groups, which are known as Joint Liability Groups (JLG). The objectives for forming the JLGs are: a. To augment flow of credit to farmers, especially small, marginal, tenant farmers, oral lessees, share croppers / individuals taking up farm activities b. To serve as collateral substitute for loans to be provided to the target group c. To build mutual trust and confidence between bank and the target group d. To minimize the risks in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline e. To provide food security to vulnerable section by enhanced agriculture production, productivity and livelihood promotion through JLG mechanism General features of JLG: A Joint Liability Group (JLG) is an informal group comprising of 5 women coming together to avail our credit facilities through group mechanism against mutual guarantee. Generally, 2 P a g e

the members of a JLG would engage in a similar type of economic activity in the Agriculture and Allied Sector. JLG members are expected to provide support to each other in carrying out occupational and social activities and it receives small loans based on social collateral. Until November 2013, we have formed 5,169 groups benefitting 25,463 women members during the reporting period. II. Self Help Groups (SHGs) SHG is a small voluntary association of poor people, preferably from the same socio-economic background. They come together for the purpose of solving their common problems through self-help and mutual help. Basically, a SHG is a cluster formed out of 2-4 JLGs of five women each. 25,463 group members have been organised in 1,445 SHGs with an average of 15-20 members per SHGs until November 2013. The project has formed 691 SHGs during the reporting period. The SHGs acts as a Federation, which stands as social collateral for the credit, and also strengthens, facilitates, and creates an enabling environment in the groups to solve any issue arising in a participatory manner. The members unanimously elect a President, who has a minimum middle grade qualification. She also facilitates collection of fortnightly installments and deposits to the Field Executive. Other qualities expected of the president include leadership skills, good communication, has the ability to take decisions and can solve the problems. III. Yes Bank Business Correspondence model - According to the guidelines given by Reserve Bank of India (RBI), the Business Correspondents are permitted to carry out transactions on behalf of the bank as agents, to expand its network and cover more people under its service area. The programme has received strong support under the Banking Correspondence agreement with Yes Bank Limited, under which Humana Microfinance disburses and manages micro credit loans to women in Rajasthan as an agent of Yes Bank with an open limit. This arrangement was a historic one for Humana Microfinance as it opened an avenue of finance in these challenging times and paved the way for a scale of expansion hitherto not possible. A total of around Rs. 30 crores was disbursed through the BC arrangement so far. Products and Services offered: I. Income Generating Activities - Humana Microfinance provides Income Generation Loan to poor women and is further ensured by proper loan utilisation checks by Human staff. As of now, more than 25,463 women beneficiaries are engaged in income generating activities with around 73% of them involved in Income Generating Activities animal husbandry, 15% are engaged in micro businesses, 2.5% are involved in Agri and Allied (Non Animal Husbandry) and other activities. The loans provided have helped them to substantially increase their monthly family income. The chart indicates huge demand of Dairy based activities in our current areas of operations. The challenge is also to develop the backward Service Sector 14 0% Others 29 0% Job 3 0% carpet 19 0% Business 1098 6% Shop 769 Agriculture 51 0% 4% Small Business 2922 15% Animal Husbandry 14200 73% Agriculture and Allied 477 2% 3 P a g e

and forward linkages for the business development along with institutionalisation of the involved communities to sell milk. Humana team is devising ways to help the communities in bringing them together and in building strong brand to sell their products. II. Micro insurance Humana offers Micro insurance services under the partnership with IDBI Federal. It is a financial arrangement to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved. The product has been for all the women and their spouses, who receive loans. As many low-income people do not have access to adequate risk-management tools, they are vulnerable to fall back into poverty in times of hardship, for example, when the breadwinner of the family dies, it forces families to take out loans with high interest rates. They are saved from the financial trauma of paying off the loans. It covers life risk for husband and wife up to the loan disbursed to the clients. The 25,463 women members who were given loans during the reporting period are all insured under this programme. Financial Literacy Campaign The team conducted the financial literacy awareness campaign with 3,000 existing borrowers. Financial literacy fulfils Humana People to People India s mandate to bring the rural poor women to the forefront of financial products and services. It allows our members to combine the financial products with the basic management skills to optimally utilise those products to enhance their income. Increased awareness on household financial management, social security products and achieved as close to 100% increase in measurable impact, e.g. bank accounts opened, increase in usage of account for savings, sign-up on social security products reached through this programme. Through this initiative, the team conducted 112 household campaigns training (approximately 3,000 target stakeholders) along with collecting data for baseline and impact assessment study. Achievements and Developments during January till December 2013: I. Operational Excellence: HPPI team has put in a lot of efforts over the whole last year to raise the operational quality and has resulted in improvement of our processes and systems. We converted the manual entry into digitalisation of loan application forms and saved time in processing the loan files. The external ratings in all the three categories, namely Governance, Operational and Financial were raised by CRISIL, India s top rating agency and a recognised Agency, which rated our microfinance operation. The duration of the rating process was for two intensive days involving onsite and offsite observations from the field. We received grading of mfr4 on a scale of mfr1 to mfr10, and the key highlights of this Rating were as follows: Experienced senior management with adequate experience. Strong support from the Federation in terms of operations and financials. Adequate capitalisation level to support future growth with a net worth of Rs 51.10 million as on 31st March, 2013 Strong CAR (Capital Adequacy Ratio) of 81.14% and low Debt to equity ratio of 0.73 times. Adequate credit approval mechanism and adherence to Know Your Client (KYC) norms. Structured HR policies with very low attrition rates. Extensive track record in development activities with more than 15 years of experience. 4 P a g e

II. Training of new staff - Humana Microfinance organised a three weeks training for 80 new staff to fulfill the requirements in the existing branches. The training continued for 7 and 14 days off-site and on-site trainings respectively. After receiving a productive training, they have taken their own responsibilities in several branches and acting well in their fields. All 3 Area Managers were sent outside for a training programme for efficient operations in Microfinance. III. Financial Literacy Programme The staff also got involved in reaching out to around 3,000 clients to bring awareness about financial products, importance of savings, accounting of businesses, etc. The campaign used three small movies and lots of banners and pictures to showcase the importance savings and individual and collective entrepreneurship. The effects of the project activities Humana Microfinance has defined its purpose of achievement of poverty alleviation through sustainable microfinance operations. It has charted out goals for itself in terms of achievement of outreach, financial stability, as well as poverty reduction amongst its clients. Humana Microfinance has created a huge impact in the lives of thousands of poor women and their families by increasing their self-confidence and awareness about financial literacy. Women have become self-dependent by starting their own livelihood activities, and they have substantially added value to their family income. Impact on Target Community Social, Economic and Political empowerment of Women leading to the larger role of women in decision making in the family has created a favorable social and political environment of our 25,000 clients. A recent study conducted by a team from Xavier Institute of Management University has reflected that most of our members answered positively 1. For the substantial increase in income 2. Improvement in Social Status and higher status of women in decision making. The team had taken 10% of our total clients as their sample from our four oldest Branches and covered around 2,600 clients and used Focused Group Discussion and structured discussion to answer impact assessment questions. Managing natural resources sustainably: The communities have also started using cooking gas, stopped wastage of drinking water and maintain greenery at households. The Microfinance team is consistently involved in building stronger environmental support from the communities. Food Security, Better Clothing, Child Education: The impact has further helped in reducing vulnerability to food, and has helped families to secure shelter and clothing amongst the poor households decreased enormously. Women lead the family with hope, courage and interest provide better education, better health to their children. Community Mobilisation: The village communities were also engaged in reducing domestic violence in the target area, peer pressure created among the community, member families. 5 P a g e

Less dependency on local money lenders: Better services in providing credit facilities has resulted in lesser dependency on informal source of financing such as local money lenders who charge exorbitantly high interest rates to the poor communities. Attachment1: The Project in Numbers January to November, 2013 Activities Goals for 2013 Results till November 2013 Goals achieved (%) No. of Branches 16 15 94 No. of villages covered 600 577 96 No. of better Future Groups formed 9,658 5,154 53.4 No. of clients 44,390 25,500 57.5 No. of Federations 3,219 1,694 52.6 No. of client insurances including spouses 44,390 25,500 57.5 Total people reached 44,390 25,500 57.5 Attachment 2: Microfinance at a glance 6 P a g e

Attachment 3: Recommendation Letters Recommended By: Vidya Devi, Sarpanch, Nanangwas Panchayat, Alwar Dt., Rajasthan. This is to certify that Humana People to People India is running the Humana Microfinance project in our Panchayat since the last three years. They actively work towards women empowerment. They have helped the women to improve their financial status. I would like to request Humana Microfinance to increase the loan ticket size and to continue to work in our area. I would also request the institution to train our women in more income generating activities so that they could take benefit from this programme. 7 P a g e

Recommended By: Dayavati, Sarpanch, Gandala Panchayat, Alwar Dt., Rajasthan This is to certify that Humana People to People India s microfinance project is working in villages under the Gandala Panchayat in the field of women empowerment. Their project actively helps in improving the economic and social status of the women from our village. They provide loans for various activities. 8 P a g e

Attachment 4: Success Story SPREADING SMILES THOROUGH TRANSFORMING LIVES Myself Meera Devi w/o Pawan Kumar from Samod village. I belong to a poor family and have two children. I am a house wife, and my husband has a small tea shop in the Samod village. I had a dream to provide good education to my children, but I never had that money. To fulfil my dream, I thought that I should start some income generating activities to earn money, but I was not on that position to invest. One day, I heard about Humana Microfinance Programme from a woman in my village, who told me that Humana staff Anil Kumar comes to the village on Thursday and provides loans to poor women for small businesses. So one Thursday, I went in Saheli meeting with a woman, where the meeting was conducted. I asked that how I can get a loan from Humana Microfinance. Then they told me that I had to be a member of a Joint Liability Group, and the whole method was explained. In 2013, I got a loan of Rs. 15,000 to start a cosmetic shop with toys. Initially, the income from the shop was low but very soon people from surrounding area came to know about my shop, and the income started increasing. Presently, I am earning of Rs. 200 to 300 per day from my shop. Now I am very happy with my family, and my children are going to a good school. I want to say many thanks to Humana Micro Finance and hope it will grow to support many more women like me. Thank you Humana!!! VOICE OF MY HEART Shanti w/o Sitaram lives in a remote village at Maid, Viratnagar block, Jaipur district, Rajasthan, with her family of five members. She has the skill to make stroke baskets as an income generation activity, but she lacked money to invest in raw material. Her economical worsened due to the marriage of her son and daughter, a month ago, which put her in a debt of Rs. 2 lakhs. One day, I went to Maid village to form a new group, further I met Shanti s husband Sitaram, and explained him about HPPI & Humana Microfinance; he got very much interested to join her wife as a member in the group. We provided Shanti a loan of Rs. 10,000 on 14 th Feb 2013, which she invested to purchase the raw material for basket making. Fortunately, the very first endeavour changed the economic condition of her family, and she started to earn good money. Her husband started to sell the baskets and handle the orders. Nowadays, she is earning Rs. 500 per day, and with a sound economy, she has repaid 90% of her loan with interest and purchased two goats, and she is also paying back the debit, which she incurred during the marriage of her son and daughter. Seven months later she took a second loan of Rs. 15,000 from Humana Microfinance, which she invested to open a vegetable shop for her son. She is very much glad to feel the improvement in her family condition, and she heartily thanks Humana Microfinance for the helping hand. She is an example for others in that particular area; we are looking the confidence level of Shanti with which she won the battle against poverty. 9 P a g e

Attachment 5: Pictures from the project Animal Husbandry is a major activity among members A Field Executive conducting a Federation meeting Women being explained about savings Financial literacy campaign for underprivileged A borrower engrossed in her work Field executive teaching a member to sign 10 P a g e

A women with her goat and a calf Members availing credit in front of the President She works, earns and looks after her family Village visit to assess the situation and resources A member with her small shop Women involved in discussion about their current situation and how savings can improve their future 11 P a g e