Raises Repayment Rate at SARS
Grameen Trust MFI Rehabilitation Program
South Asia Research Society (SARS), India, has been operating its microfinance program through 13 branches since 1993. However, the microcredit program did not achieve results as expected. At the invitation of SARS, Grameen Trust developed a special rehabilitation program. GT extended its support to SARS and deputed an experienced and efficient Grameen resource person who would be in charge of one branch of SARS and work with full freedom to develop the branch as a model branch where staff from other branches will be trained. Based on its most dire condition the Hasnabad branch was selected for rehabilitation to a model branch of SARS.
A borrower bought a tractor with SME loan
The challenges facing the Hasnabad branch were caused by the dropout of experienced staff and managers, low staff morale, high member dropout, inadequate monitoring and supervision, break down of the credit discipline, cash-flow crisis, as well as other causes hampering the field activities.
The GT resource person implemented various measures to mitigate the challenges. Setting up new centers, introduction of GGS, new loan and savings products attracted new members to the program, as well as brought back those who had dropped out. Measures were taken to collect loans that were in default. Credit discipline was reestablished. Overdue loans decreased from INRs 3,363,000 in 2004 to only INRs 297,350 at the end of 2007. The success of the branch has also raised staff morale and productivity. As a result of the GT Rehabilitation Program the repayment rate at Hasnabad branch has improved from a dismal 18% in 2004, to 80% at the end of 2007.