Today, development initiatives are diverging from granting aid to providing credit support and promoting savings to increase the income levels of the poor and improve their living standards. In formulating or implementing credit programs it is more important to understand ‘what’ it takes to create a micro finance organization (MFO) and ‘how’ it can be effectively implemented to achieve its objectives of poverty alleviation.
Of late non-formal credit agencies catering to the poor, in the form of self help groups (SHGs) have emerged as a viable alternative and an effective link between the formal credit system and the poor. The democratic functioning of successful SHGs, their sensitivity in assessing and appraising credit needs of the members, their functioning and sufficiency in recycling funds often with repayment rates nearing 100% are noteworthy features.
Thus, institutionalizing micro finance can facilitate better outreach and wider impact. Furthermore, the relative successes of many MFOs soundly refute the claim of some that the poor are un-bankable or that MFOs are a waste of development funds. In fact, it would be difficult to find another type of development project, which has been relatively effective on such a large scale in recent years. The need and emergence of micro finance programs is based on the fact that the existing first generation institutions, known as formal banking/financial institutions, have not been able to reach the poor. MFOs are thus the second generation organizations that fill up this gap.
ICECD has been promoting micro enterprises with micro credit support through SHGs since many years. It has adopted a successful approach of not only extending micro credit to SHGs but also of creating micro enterprise and providing adequate income to the deprived people to facilitate them to come out of their poverty. The program has been designed to share successful strategies and approaches to build community based MFOs.
The program is designed to appraise and train all those who wish to initiate, design and implement micro finance programs for the poor through creation of a community based micro finance organization (or through existing organizations by adopting these strategies). The program will, therefore, provide inputs on the following:
- The need for micro finance programs
- Some successful models (international and Indian)
- Obstacles faced by micro finance programs in obtaining credit
- Expected impact of micro finance programs for poverty alleviation
- What is MFO
- MFO’s institutional innovations
- Characteristics of second generation MFOs
- Creating a community based MFO
- Capability building for MFO and management development system
- Micro and small business promotion strategies
Personnel designing, implementing and evaluating micro credit projects, government agencies, policy makers, NGOs, research institutions, donor agencies, commercial banks, development banks, financial institutions dealing with credit schemes and SHG leaders and agencies promoting SHGs.
- Duration: 2 Weeks
- Fees: US $1500 inclusive of training costs, training materials, food and accommodation