The Activists for Social Alternatives (ASA) was founded in 1986, in the central region of Tamil Nadu, India, with the objective of alleviating poverty. ASA started a micro-finance program in 1993. The main program activities of ASA are provision of credit, savings mobilization and business skills training for sustainable development of poor communities. Grameen Trust provided US$ 263,977 to ASA as seed capital and scaling up funds for development of its microfinance program.

ASA is now serving more than 47,000 poor households. In seven years it has achieved the following results:

• It has opened 25 branches, 2,166 centers and 9,417 groups, in the districts of Tiruchirappalli, Pudukottai, Madurai, Dindigul and Sivagangai of Tamil Nadu State, with a total of 39,782 borrowers.
• A training center for staff members was set up for training newly recruited as well as existing staff. ASA also arranges training for other NGOs, and microfinance institutions. ASA promoted a separate community based organization known as Grama Vidiyal (GV) to support its expanding micro finance program.
• ASA started an integrated approach to development and implements 'beyond micro finance' programs.

ASA Member Vennila at her flower shop selling flowers and making garland

In 2002, ASA successfully implemented an expansion strategy through its decentralized franchise model of operation. As a result, there was a 59% growth in membership (43,946 as on Dec, 2002) and a 79% growth in loan outstanding (Rs. 100 million) during the year.

ASA has sent 7 staff members to Grameen Trust for training on Grameen Basics, Accounting and Management of Microcredit Programs. ASA has also initiated an insurance scheme. The essence of insurance is to support the nominees and dependent children after the death of a member. Almost all members are covered under this scheme.

ASA has also adopted an innovative scheme called the Vidiyal Member Pension Benefit Scheme which gives pension benefits to the Grama Vidiyal members when they become old and are unable to earn money or any livelihood. This scheme is formulated and implemented by the Grama Vidiyal for the benefit of its own members.

Borrowers are mostly using the loan for small business, milch cow, goat raising, sale of vegetables, fruits, poultry, purchase of sewing machine, wood sales etc.

Performance and impact of the project

It is to be noted that from the beginning, the project was able to maintain a repayment rate above 90%. Portfolio at risk of ASA is currently 3%.

ASA has made a strong positive impact on the socio-economic life of the rural poor in Tamil Nadu by providing micro finance, education, training on sanitation and other health measures. It increases employment opportunities, production of goods and marketing linkages by providing loans to micro enterprises and thus results in poverty reduction, women's empowerment and rural development.

In order to expand its outreach and to attract commercial financial resources for its micro-finance program, ASA has promoted a corporate entity, Self Help Enterprises and Livelihood Limited (SEL.Ltd.) and Credit Opportunities for Rural Enterprises Limited (CORE Ltd.) to function as a non-banking financial company.

The operational efficiency of ASA was 97% as on December 2002. This was achieved due to efficient field staff and maximizing repayment rate by ensuring proper supervision of loans disbursed. Each staff of ASA is serving 328 borrowers with an individual loan portfolio of US$ 18,000 (Rs. 872,038) approximately.

Report compiled by Grameen Trust