Background of microfinance

background of microfinance

Rashtriya Mahila Kosh (RMK), established in 1993 is a national level organization as an autonomous body under the aegis of the Ministry of Women and Child Development, for socio-economic empowerment of women. The operating model currently followed by RMK is that of a facilitating agency wherein RMK provides loans to NGO-MFIs termed as Intermediary Organizations (IMO) which on-lend to Self Help Groups (SHGs) of women. In addition, RMK also has appointed nodal agencies and franchisees for furthering of its objectives of reaching out to the women beneficiaries with easy access of micro credit for income generating activities.

RMK extends micro-credit to the women in the informal sector through a client friendly, without collateral and in a hassle-free manner for income generation activities. RMK has taken a number of promotional measures to popularize the concept of micro financing, enterprise development, thrift and credit, formation and strengthening of Women-SHGs through intermediary organizations.

To be a financial service and capacity enhancement institution for social and economic empowerment of poor and marginalized women

To be a single window facilitator for provision of financial services with backward and forward linkages for women in the unorganized sector through Intermediary Micro Finance Organizations (IMOs) and Women Self Help Groups (SHGs) and to augment their capacities through multi-pronged efforts.

A. The aims & objectives of Rashtriya Mahila Kosh are as follows:-

1. Socio-economic empowerment through multi-pronged effort

2. Providing micro-credit facilities.

3. Capacity building of IMOs and women beneficiaries

4. To promote or undertake activities for the promotion of or to provide credit as an instrument of socio- economic change and development through the provision of a package of financial and social development services for the development of women.

5. To promote and support schemes for improvement of facilities for credit for women:-

a) for sustenance of their existing employment

b) for generation of further employment

c) for asset creation

d) for asset redemption and

e) for tiding over consumption, social and contingent needs

6. To demonstrate and replicate participatory approaches in the organization of women’s groups for effective utilization of credit resources leading to self-reliance.

7. To promote and support experiments in the voluntary and formal sector using innovative methodologies to reach poor women with credit and other social services.

8. To sensitize existing government delivery mechanisms and increase the visibility of poor women as a vital and viable clientele with the conventional institutions.

9. To promote research, study, documentation and analysis, including provision of fellowships and scholarships, of credit and its management and of successful experiences at various levels in order to promote replication and dissemination of successful credit extension and management methodologies.

10. To promote the federation and net working of women’s organisations for shaping & exchange of experience and information and to develop skills in response management & social mobilization.

11. To promote and support the expansion of entrepreneurship skills among women.

12. To cooperate with and secure the cooperation of the Central Government, State Governments and Union Territory Administration, credit institutions, industrial and commercial organisations and non-governmental, voluntary and other organisations and bodies in promoting the objects of the Kosh.

13. To accept subscriptions, grants, contributions, donations, loans, guarantees, gifts, bequests etc. on such terms and obligations not inconsistent with the aims and objects of the Kosh, and

14. To do all such lawful acts & things as may be necessary or conducive for furthering the objects of the Kosh.

B. There shall be no discrimination on the ground of religion, community, caste or class, creed or race in carrying out the aims and objects of the Kosh.

C. All the incomes, earnings, movable, immovable properties of the Kosh shall be solely utilized and applied towards the promotion of its aims and objects only as set forth in the Memorandum of Association and no part of income and property of the Kosh shall be paid or transferred directly or indirectly by way of dividends, bonus, profits or in any manner whatsoever to the present or past Member of the Kosh or to any person claiming through any one or more of the present or past members. No member of the Kosh shall have any personal claim on any movable or immovable properties of the Kosh or make any profits, whatsoever by virtue of his membership. The accounts of the Kosh shall be audited and balanced each year.

Provided, however, nothing herein contained shall prevent the payment, in good faith, of remuneration to any member or other person in return for any services rendered to the Kosh or for traveling allowances, halting or other similar charges.

The Kosh discharges the following functions for the furtherance of its objects.

1. The Kosh will seek to enable women to achieve economic independence. It will strive to go beyond credit delivery and provide services for integrated development centred around the needs of poor women.

2. While provision of credit to cover composite needs is essential, such credit will be linked mainly to production and economic activity.

3. To create an environment to facilitate and support further innovation and experimentation for designing suitable delivery mechanisms to reach poor women.

4. To provide for research, whose primary function would be to explore/facilitate and conduct participatory action research and analysis, based on which policy imperatives and action (including legislation) can be identified and advocated

to address the constraints in the formal system.

5. Education of credit management will be integrated with the provision of credit, along with literacy and skill training for individual women, leadership training among groups for self management, etc.

6. Accessibility of credit to poor women will be improved in terms of physical distance, simplification of procedures, flexibility of measures for loans and recovery and other measures conducive to increase utilization, etc.

7. Provision of a number of support services (both economic as well as social) to enable the women to address themselves to the complexity of the problems and deprivations arising from poverty and powerlessnes, over the above services and schemes already existing.

8. Provision of adequate, timely, regular flexible credit inputs matched to the individual needs of women allowing for the seasonality and diversity of poor women’s work and occupations.

9. Promote and support grassroot level societies and organisations and other participatory structures for providing for women effective access to decision making.

10. To have a policy and advocacy dimension in its working which based on all of the above, would provide a basis for revisions in the formal system.

11. Develop effective channels of communication between women and the credit/banking systems to enable the latter to adapt their procedures as required by the personal priorities and constraints of poor women.

12. Advocate for greater appreciation among the conventional credit systems of the need for simple alternative systems and rethinking of the social lending costs in reaching the poor.

13. Establish a mechanism for dissemination of information and experience among agencies in the Government and non-government sectors in the area of credit for poor women.

14. Identify and build up a resource base for training, project formulation and evaluation of needs at regional levels so as to promote greater outreach of services and coverage of remote areas.

15. To mobilize resources at several level from governments, public and private donors and from other developmental agencies both governmental and non-governmental.

16. Motivate voluntary organisations.

17. To coordinate with other credit and development agencies/connected with the well being of women.

18. To grant monetary and other assistance including loans/guarantees to banks/ persons/organisations and associations, etc. who are engaged in the promotion and development activities for economic upliftment of women.

19. To subscribe to or become a member of or otherwise cooperate with other associations whose objects are wholly or in part similar to those of the Kosh.

20. To borrow, raise or secure the payment of money in such manner as the Kosh shall deem proper or convenient for furtherance of the above objects and, in particular, by the issue of bonds, debentures, bills of exchange, promissory notes or other obligations or securities of the Kosh and to purchase, redeem or pay off such obligations or securities.

21. To accept and to give grants, donations and subscriptions in furtherance of the objects of the Kosh.

22. To purchase, accept as a gift or otherwise acquire and own or take on lease or hire temporarily or permanently, any movable or immovable property necessary or expedient for the furtherance of the objects and activities of the Kosh and to deal with the same in any manner whatsoever.

23. To support and do all such things as are or may be necessary or incidental to, or conducive to the attainment of any of or all of the objects of the Kosh.

Credit Delivery Mechanism : (RMK-IMOs-SHGs/JLG)

Credit is disbursed t o the Women-SHGs/JLGs through Intermediary Organizations (IMOs).

Loan Schemes:

i) Loan Promotion Scheme

ii) Main Loan Scheme

iii) Refinance Scheme

iv) Franchisee Scheme

v) Gold Credit Scheme

vi) Housing Loan Scheme

vii) Nodal Agency Scheme

Special Credit Package :

A special credit package to enable the poor women in the North-Eastern Region (NER) to access credit from RMK has been operationalized. RMK has formulated a concessional package for the voluntary organizations of the North-Eastern region for easy access of credit from RMK to meet the credit needs of the poor women of the region in order to remove the uneven presence of micro-credit in the country which is witnessed mostly in North-Eastern region due to poor presence of banking net-work, lack of infrastructure and awareness, The concessions are:

• The organization having completed one year of its registration can apply for the loan.

• Margin on loan reduced from 10% to 5%.

• The grace period on repayment of loan enhanced from 6 months to 12 months.

• The repayment period of loan is three years for all schemes.

• Eligible organizations are provided second class sleeper rail fare and where there is no rail link, cheaper class to and fro Air fare to the members of NGOs (up to 2 numbers) for coming to Delhi for execution of documents.

Resource Centres:

Reputed Government Organizations / Government Undertakings / NGOs / Research Institutions / Academic Institutions, having adequate infrastructure for capacity building, vocational and skill development, technology transfer, micro-enterprise development, etc. have been identified.

Intermediary Organizations (IMOs):

Those working at grass-root level such as Non – governmental organizations, Women Federations, Co-operatives, Urban Women Cooperative Banks, Government Autonomous Bodies, not for profit – Section 25 companies registered under Companies Act, and other Voluntary / Civil Society Organizations can work as IMOs.

Source: rmk.nic.in

Category: Payday loans

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