NIDAN Micro Finance

NIDAN Micro Finance

Nidan’s Micro-Finance Programme: At a Glance

  • · No. of SHGs 4668.
  • · No. of Members 58888 approx.
  • · Existing partners RMK, RGVN, HDFC, ICICI, Indian Bank, ABN AMRO (RBS) Bank.
  • · Proposed partners SBI, PNB, SIDBI, CBI and other Financial institutions.
  • · No of Staffs 106.
  • · No of Districts 06 in Bihar covering 18 Branches.
  • · Present Beneficiary – SHGs outreach 12712.
  • · Loan Size Min. of Rs.3000/- & Max. of Rs.25000/-
  • · Rate of Interest = 15 % p.a.

Economic pursuance of people from the poor sections of the society requires amicable support system to develop them as sustainable profitable pursuance. They need financial services. Nidan promotes the saving habit and makes credit accessible through various Financial Institutions, both Government and Non Governmental. Through 4,688 self-help groups, Nidan reaches out to 58,888 members in 25 blocks of six districts of Bihar for different micro finance and micro credit services.

Regarding micro finance related activities Nidan considered to pioneer as it was the first organization in Bihar which initiated various micro finance related activities in the state. In spite of various limitations and hurdles, Nidan took the responsibility to support the society in its social objectives through micro-finance activities.

With the time Nidan micro-finance has evolved as an inclusive business enterprise to ensure easy access to credit services among the poor for their entrepreneurial and social empowerment. Micro-credit has played critical empowering role in the life of the poor- more so among the poor women. It has helped them to tide over the crises caused by uncertain credit availability. The poor have learnt how to deal with the stifling terms of informal credit and turn the situation in their favour- that of budding micro- entrepreneurs through development and promotion of Micro-enterprises ’.  Considering its social and financial implication Nidan has made a long term plan for the strengthening and expansion of this portfolio.

The Nidan Microfinance programme received biggest boost when it got Microfinance fund support from Rashtriya Mahila Kosh (RMK). In the same year Nidan got fund from ICICI Bank and HDFC Bank. This was the time, when Nidan was trying to establish itself as a self-sustainable Microfinance Institution. Having spread 6 districts with 58000 members Nidan portfolio does not increased as per expectations due to lack of issue based Micro-Finance policy, since there is no specific policy regarding the Microfinance with respect to lending from Bankers and Financial Institutions. In spite of policy and Infrastructure bottlenecks, Nidan managed to achieve its social objectives as Nidan Microfinance programme is a community based pursuance. Nidan Microfinance Programme is by the community for the community and of the community.

Mission

To provide a range of quality, affordable financial services in a sustainable manner to the low income families through Self Help Groups, for their socio-economic empowerment.

Values  

Transparency
we will maintain transparency in our work, both internally and externally
Respect
Our organization believes in respect and equal opportunity for every one – community member or organization staff.
Integrity
We believe in integrity towards the community and our mission. Our organization will try to develop this value in the community also, to whom we are serving.
Commitment
We have a committed staffs, who have organizational synergy to best serve our clients.
Efficiency
We will be efficient in performing our work and in delivering services. Our effort will be to make sure that these services are effective in bringing changes desired by the community.

Vision                                                                                                                          

The Vision is the Goal that helps the institution expresses its envisioned future. NIDAN’s vision is “To be a leading MFI in Bihar with providing a range of financial services to 2 lakh families by 2012.”

Nidan plans to initiate a comprehensive microfinance operation which necessitates the organization to revamp its strategy. The Board of Nidan decided to register Nidan under the Company’s Act. Nidan Micro Finance transformed the activity into Nidan Micro Finance Foundation (NMMF) on 20th March 2009.The NMMF registered under Section-25 of Companies Act, 1956.

Some highlights of Nidan’s Achievement in SHGs & Financial services:

 Self –Help Groups: Nidan began organizing the informal workers into Self- help groups in 1996 and till date 4688 groups organized in 6 districts of Bihar with the strength of 58888 members. 

Financing by banks: In those days when MFI activity was not supported by Banks, we thought the best method is to link members with the Banks directly and we began by linking members with Bank of Baroda in 1997 and this linkage grew stronger and today almost all the banks provide loan to Self- help Groups promoted by Nidan across all the districts. 

Group Insurance Nidan realized that without insurance coverage, members are prone to much vulnerability which exposes them to the risk of disrupting their livelihood. Nidan began insurance program in 1999 by linking members with LIC and NIC; but later went on to various tie ups adding many products including asset insurance. 

Individual Insurance: We began individual insurance in 2001 with LIC and added products like Jeevan Madhur and Jeevan Mangal.

Thrift and Credit Co-operatives: With the time we realized that Self help Groups leaves behind many poor who are unable to cope due to many reasons and thus started registering Thrift and Credit Co-operatives. Till date we have registered Thrift and Credit Co-ops in Patna, Delhi, Vaishali, Muzaffarpur, Samastipur, Khagaria and we are in process of setting up six more Thrift and Credit Co-operatives.

Pension: We have just begun the pension scheme of UTI and plan to take on a larger scale soon.  

Remittance: Having formed Self- Help Groups and Thrift and Credit Co-operatives, now we plan to start remittance services for our members

Nidan Micro Finance foundation (NMFF)

Nidan Micro Finance has been known for its quality services and close relationship with the community. Nidan has adopted the client focused approach by introducing various customized products and services. In the near future, NMFF plans to introduce more products and services like remittances, short term loans to cater the seasonal markets (e.g. fruits and vegetable growers, jute based production) etc. However, it has to be ensured that new product introductions should not increase the administrative cost of maintaining MIS, repayment collection or training of Organizers.

Our Products

1.    Multiple saving products – Sanchay

2.    Multiple loan products,

3.    Multiple insurance products,

4.    Housing finance,

5.    Remittance Facilities

Through

1.    SHG’s,

2.    Co-operatives,

3.    Micro Insurance

4.    Housing finance

Current Plan

1.    Effective functioning of newly formed Nidan Micro-Finance Foundation Company.

2.    Mobilization of Rs.10 Cr. for NMFF in FY-2009-10.

3.    Coverage and presence in all 38 Districts of Bihar, Delhi, Rajasthan and other states through NGO Networking.

4.    Proposal for 20000 more qualitative Groups formation with inputs of Integrated Livelihood activities.

5.    Vision for 2012 coverage of 2.5 Lacs. Members – Active client outreach for enhancement of livelihood and other support services.

6.    Enhancement of Human Resource Index of organization covering Staffs and SHG members by providing specialized training inputs and followed by refresher Training.

Challenges

1.    Lack of Policies for Promotion of MFI

2.    Non- Cooperative approach of Bankers and Financial Institutions with respect to lending

3.    High operating cost

4.    Lack of financial literacy among members- With respect to timely repayment

5.    Lack of specialized manpower

6.    Absence of MFI platform at state level

7.    Limitation of financial resources

Future strategy

1.    Conducive policy for MFIs

2.    Uniform / special guidelines for Bankers and Financial Institutions for MFIs lending

3.    Assistance from Central / State Government for MFIs – start up fund

4.    Building credit worthiness among members

5.    Assistance in providing specialized training inputs and followed by refresher training to MFIs

6.    Initiation for MFI platform in state level

 

Product Details       

Sl. No. Product name Interest rate (Flat) Installment Repayment period

1

Petty business

15%

Weekly

12-18 months

2

Agriculture based

15%

Quarterly

12 months

3

Animal husbandry

15%

First after 3 months onwards weekly

18 Months

4

Others

15%

Weekly

12-18 months

Name of Financing Organization Amount Sanctioned to MFILoan Grant RoI on Loan(%) Amount Received by MFILoan                Grant Loan /s
RMK 171.00 0 9.00 171.00 0 26.15
HDFC 50.00 0 10.50 50.00 0 13.63
ICICI 200.00 0 11.25 50.00 0 7.40
INDIAN BANK 50.00 0 13.25 50.00 0 31.81
RGVN(Disbursed in                Different Installments) 50.00 0 11.50 (Avg.) 30.00  9.37
       TOTAL 521.00 0 11.1 351.00 0 88.36

On 31.03.09, Nidan had a corpus of Rs 40.20 Million available for lending. Contributions to this came from:

Rashtriya Mahila Kosh                                                 Rs.17.8 Million

Rashtriya Gramin Vikash Nidhi                               Rs.3.0 Million

ICICI Bank                                                                        Rs.5 Million

HDFC Bank                                                                       Rs. 5 Million

Indian Bank                                                                      Rs.5 Million

Capital                                                                               Rs.4.4 Million

The Board of Directors of NMMF is providing their expertise in the streamline of our services for better outreach and board comprise of as follows-:

 

Operations of Nidan Micro Finance:
 A) District/s of Operation (As on 31 March 2009)-: 8 Districts
 
 B) No of villages covered (As on 31 March 2009)-: 7808 Villages/ 1765 Panchayats
 
C) No of Branches of MFI (As on 31 March 2009)-: 14
 
 D) No of Staff handling MFI Operations (As on 31 March 2009)-:72
 
 E) No of Active client (As on 31 March 2009)-: 7954*
 
F)   Mode of financing – Through SHGs / JLGs / Individual-: SHGs

 

Board composition of NMMF

Sl. No.

Name

Qualification

Attribution

Designation

1.

Arbind Singh M. A (Sociology) Renowned Social Worker and Entrepreneur of the year award winner Managing
Director

 

Sanchay, member owned thrift and credit co-operatives are promoted by Nidan. With saving products like saving deposits, recurring deposits and fixed deposits, members can get loans for working capital, health expenses, marriage and funeral purposes, and also for housing purposes. They may also avail of a loan against gold.

 

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