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SKS NGO India 2010
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affordable loans. High repayment rates in the industry have changed the perception that the poor are not credit
worthy. With the right opportunities, the poor have proved themselves to be productive and capable of borrowing,
saving and repaying, even without collateral.
Over a period of time, microfinance has come to include a broader range of services (credit, savings, insurance
and others) as it has been realized that the poor, who lack access to traditional formal financial institutions,
require a variety of financial products.
Microfinance is the supply of loans, savings, and other financial
services to the poor. The term micro is in reference to the small
amounts typically involved in the practice. These services are
small micro because a person who does not have a lot of
money most likely will not need a loan of several thousand dol-
lars. However, a loan of a few hundred dollars may make a huge
difference in their lives, giving them the ability to purchase live-
stock for a small farm, a sewing machine to help make accessoriesand clothes, or supplies for a small store, for example.
Microfinance started with the recognition that poor people had
the capability to lift themselves out of poverty if given access to
What is Microfinance?
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Facts about Microfinance Out of the 6.7 billion in the world, 3 billion people live on less than USD 2 per day (ILO).
80% of the worlds population has no access to financial services(GDRC).
The worlds 10,000 microfinance institutions provide funding to 150 million active clients, 3/4 of who arewomen. An estimated 500 million potential microfinance clients are yet to be reached (Planet Finance).
Fewer than 2 % of poor people have access to financial services (credit or savings) from sources other thanmoney lenders. (Data Snapshots on Microfinance - The Virtual Library on Micro credit).
The Micro credit Summit estimates that INR 1015 billion (USD 21.6 billion) is needed to provide microfinanceto 100 million of the worlds poorest families. The Summit planners say it should be possible to raise USD 2 bil-lion from borrowers savings alone. The final figure may be even higher. (Data Snapshots on Microfinance - TheVirtual Library on Micro credit).
There is a potential demand for microsaving services from 19 million savers. (Data Snapshots on Microfinance- The Virtual Library on Micro credit).
Studies of the impact of micro credit in more than 24 countries found dramatic improvements in householdincome levels. These improvements took place primarily through growth in the borrowers business, whichtranslated into increased household income. The studies found that access to micro credit allowed the borrowerto increase the number of goods or services sold and reduce the costs of supplies and raw materials. As a result,sales increased and profits grew from 25% to 40% (Unitus).
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Who is SKS Microfinance?
SKS Microfinance is Indias largest and the worlds fastest- growing microfinance organization. It aims toempower the poor by providing them collateral-free loans for income-generation. SKS extends these loans to
women who use it to scale up their enterprises and get themselves and their families out of poverty. Started
in 1998 as an NGO, SKS transformed into an NBFC in 2005 and is regulated by the RBI.
Since the transformation, SKS has been successful in creating a for-profit model of microfinance using com-
mercial funds that are scalable. By delivering services at the doorsteps of our members and following clear-cutprocesses, SKS has been able to ensure a repayment rate of over 99 % on its loans.
SKS was ranked as the Number 1 MFI in India and number 2 in the world by MIX Market, worlds leading
business information provider for MFI industry. Business Week has also rated SKS as one of the most influ-
ential companies. SKS has received numerous awards including the CGAP Pro-Poor Innovation Award, the
ABN-Ambro/Planet Finance Process Excellence Award, Citibank Information Integrity Award, the DigitalPartners SEL Award, and the Grameen Foundation USA Excellence Award. SKS is the only MFI in India to
receive the MIX Transparency Certification. SKS was selected by Unitus as the most promising microfinance
organization in India.
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The Ultra Poor ProgramWhile microfinance works well for the upper poor and poor sections of society, the ultra poor sections of soci-
ety need much more than finances. Swayam Krishi Sangam, the NGO arm of SKS Microfinance works alongside
the ultra poor to restore hope, dignity and broaden their opportunities.
The Ultra Poor Graduation Pilot is the flagship programme of SKS NGO. Facilitated by CGAP - Consultative
Group to Assist the Poor (housed at the World Bank), and modeled after the highly-successful BRAC Ultra Poor
Programme of Bangladesh. SKS has adapted the program to Indias socioeconomic development environment
and policies. SKS desires to create a standard, scalable and replicable Ultra Poor Graduation Model that blends
research, innovation and technology.
The SKS Ultra Poor Programme addresses the challenge of extreme poverty in its three manifestations, eco-
nomic, social, and health. It aims to graduate ultra poor clients to a point where their growth is self-sustainable.
An intensive 18-month program helps enhance the awareness levels about government resources, social issues
and health care, and creates stable livelihoods. Upon graduation, many members may choose to join microfi-
nance organizations or government sponsored SHG (Self Help Group) Bank linkage program to sustain liveli-
hoods and diversify into new opportunities.
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With a population of over 1 Billion, 35% of which fall un-
der the poverty line, India has one of the largest popula-
tions of the poor in the world. While microfinance has been
able to lift up many of those in poverty, the ultra poor havebeen unable to utilize the resources available through mi-
crofinance.
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The ultra poor are defined as the bottom 5% of the poor whose
lives are characterized by chronic hunger, persistent poor
health, and illiteracy. In India about 10 million of these fami-
lies exist. Swayam Krishi Sangams Ultra Poor program tar-
gets these extreme poor who live on less than $1 a day.
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The ultra poor lack the ability and confidence to join
mainstream microfinance and require a more holistic ap-
proach to create sustainable change in their lives. These
households often include widows with a large numberof children, the elderly, the disabled, and other severely
marginalized groups.
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The SKS Ultra Poor program, modeled after the highly suc-
cessful BRAC program in Bangladesh, aims at the social, health,
and economic advancement of the ultra poor.
The program seeks to graduate members to mainstream devel-
opment programs after a period of18 months and constantly
tracks their progress during this time frame. Upon graduation,many members will often chose to join microfinance organiza-
tions to sustain existing business or diversify income by start-
ing new businesses.
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The Ultra Poor program is involved in 4 different aspects of
intervention. They include livelihood training, health develop-
ment, social development, and financial literacy.
Livelihood
This is the first of four interventions and includes the selec-
tion and transfer of livelihood assets and training in asset man-
agement, such as livestock- rearing or running a general store.
This is followed by comprehensive skills training and access to
saving services.
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Health Development
Health development includes monthly visits by a trained pro-
fessional, information sessions, health screenings, and health
training for select ultra poor members to create a cadre of
paraprofessionals and barefoot doctors within the commu-
nity.
Social Development
Provides members with the opportunity to conduct group
meetings and discuss important social concerns in an open
forum. The forum is also used to create awareness about and
increase members participation in various government pro-
grams targeting the ultra poor.
Financial Literacy
Provide members with basic financial literacy through guid-
ance on maintaining cash flow, budgets, and setting up goals
and savings. Members are also informed about opportunities
to grow their business through various financial institutions
and products that are available within their reach
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We spent two weeks in the CYSD Pryas compound in Bui-peri Guda in the Koraput district of Orissa. CYSD stands
for the Center for Youth and Social Development.
Although not affiliated with SKS, CYSD has close ties with
SKS and often hosts SKS staff when they visit the area.
Pryas is one of CYSDs projects and is really cool. They have
managed to create a completely organic and self sustainable
entity by utilizing and reusing the resources around them.
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As research volunteers, we partnered with SKS NGO
to learn more about the health and money habits of
the Ultra Poor members. We shadowed field officers,observed weekly SKS Ultra Poor meetings, conducted
village profiles and interviewed individual villagers.
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The Swayam Krishi Sangam team in Boipari Guda is
comprised of nine field organizers, four health field
organizers, and one lab technician. Since the vast
majority of Ultra Poor members are female, health
field organizers are all women while all field officers
are all men
The team covers 113 villages and 1,000 members
each week. Of these members, 900 have been trained
and 762 assets have been transferred.*
*as of 7 July 2010
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Each day each volunteer would shadow a field officer. Depend-
ing on the day, officers may have two to four village visits.
During each visit we would take photographs of the program
members and take notes on various aspects of the program
which we used to compile a list of recommendations.
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Out team conducted 43 interviews and village member
profiles which we compiled into a word document. In ad-
dition to this, we have compiled a short media clip to raise
awareness about the Ultra Poor Program and SKS NGO.
The afternoons were spent compiling and analyzing the
data into a final report which we presented in person to
SKS management after returning to Hyderabad.
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Our context is breathtakingly different from the norm for millions and millions around the world. On
a trip to India for example, I remember talking to a pastor about books and reading. He said If I save for
four months, I am able to buy one Christian book through a discount I am offered. I have never traveled
outside India but I have heard that sometimes people in America buy books and dont read them. He
asked with dismay, Is that really true? I mumbled something to cover my embarrassment as I thoughof just such books on my shelves at home.
Its not a matter of if we have bought books we dont read, but how many. Its not whether we get
our childs inoculations, but whether we can keep track of the paperwork to prove it to the schools. Its
not whether we eat but how much we eat beyond what we need or even want. Its not whether we have a
bed, but what color and theme the bed coverings will be. ~Mark Labberton
All information is from www.sksindia.com and www.sksngo.org. Please visit these sites for more information