Microfinance in bihar
- Provide quality financial services to women below the poverty line
The eastern part of Uttar Pradesh and the western part of Bihar are among the poorest and least developed regions of India. In this region, more than 80% of the 140 million inhabitants belongs to the rural poor. Life expectancy, mortality rates of infants and children under 5 years are very bleak. Discriminatory traditions, which are attributed to the caste system, are persistent. Over 20% of the population is Dalit. They are almost entirely dependent on large landowners (zamidari's). Women take little part in public life, because of the traditional gender roles and limited access to education. Microfinance is a tool that can contribute to improving the economic position of the poor. Cashpor is one of the few MFIs that has been able to establish a successful microfinance program in this part of India.
We have been working with Cashpor Micro Credit (CMC) since 2007. CMC fits well in our country strategy. In addition to the connection with the mission, it also reflects our geographical focus. Cordaid has a strong preference for investment in northern India, as the microfinance sector in the Northern region of India is the least developed and also contains the poorest states. CMC is now a microfinance institution (MFI) with more than 400,000 active customers.
The primary objective of this investment is to improve the social position of impoverished, difficult to reach, vulnerable and/or marginalized people by increasing their access to adequate financial and support services. This fits perfectly with CMC's mission, since they focus on improving the position of women below the poverty line in disadvantaged areas in India, such as Uttar Pradesh and Bihar. Since the average loan of CMC customers is around INR 5,000 (EUR
85), with a loan of EUR 500,000 at least 6,000 customers are reached.
- 6000 Female microfinance clients provided with loan
The target group consists of women below the poverty line. CMC uses its own housing index to determine whether women are under the poverty line. A social rating shows that over 70% of customers are in fact living below the poverty line. For new customers this number is 95% (one can therefore assume that clients of CMC that have received various loans have been able to improve their income and living conditions).
CMC offers three types of loans: Income Generating Loan (99% of the portfolio), Emergency / Consumption Loan and Loan Bada (a bigger micro-enterprise loan for clients who have a good track record or a minimum of three loan cycles). It is expected that the proportion of Bada loan will grow strongly in the total portfolio.
CMC works in northern India. CMC operates in 15 districts spread across two provinces, reaching 368,000 customers in total. In the east of the province of Uttar Pradesh, CMC has a total of seven districts (Mirzapur, Chandauli, Ghazipur, Ballia, Mau, Deoria and Jaunpur). The other three districts are located in Bihar (Saran, Buzar and Bhabhua). There will not be much direct competition because CMC has mainly targets clients below the povertly line, while the other MFIs in this area, in their desire for rapid growth, are strongly focused on clients above the poverty line.
The Operational Self Sufficiency (OSS) indicates the extent to which CMC manages to operate without losses. This percentage is above 100%, which means that all operational costs are covered by the interest income. The remaining profit is reinvested, except 10% which is used for all kinds of social projects in the villages of the customers.Source: www.cordaid.org
Category: Payday loans