India’s First Social Enterprise and Investment Forum: Sankalp 2009

Shital had written in last November about Sankalp 2009, a business plan competiton for Medium, Small and Micro Enterprises (MSMEs) organized by India Development Gateway, in partnership with Rural Innovations Network (RIN) and National Bank of Agriculture and Rural Development (NABARD).

Turns out the business plan competition has now developed into India’s first ever Social Enterprise and Investment Forum, with additional support from the Rockefeller Foundation. Continue reading

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Information sharing improves earning capacity of farmers

About 138 farmers in Pune stand to gain in their productivity today thanks to their membership to Abhinav Farmer’s Club. According to a report in Business Standard, Dnyaneshwar Bodke, using his education in Horticulture Training Center founded the club to share his knowledge on farming exotic fruits, vegetables and flowers to his fellow farmers in 2004.  Funded by National Bank for Agricultural and Rural Development (NABARD) and Canara Bank this club since then seems to have transformed into a peer-to-peer knowledge sharing platform in which farmers brainstorm various aspects of farming. As a result, the sophistication of their farming methods and their productivity seems to have vastly improved.

“Traditional farming compelled the farmers to wait for the required weather conditions to start farming. But, since we do our business in greenhouses and sheds, we are able to control the conditions in which the crops grow. That’s the reason why we are able to excel as we don’t have to depend on nature for the right time to begin,” adds Bodke.

How has this helped the stakeholders? Apart from earning bounties to the farmers, this has also provided employment to over 700 others in the periphery.

The numbers are there for all to see. In 2007, AFC produced 13.2 million flowers and some 250 tonnes of vegetables. Its yearly turnover is a little above Rs 10 crore. Farmers affiliated to the club use drip irrigation and operations in the farms are labour intensive. This keeps their costs under check.

The example set by Abhinav Farmer’s Club along with and the now famous e-Choupal initiative by ITC seems to support the point that access to information is probably the best way to empower the rural India – a point valued by Comat Technologies, a successful social business earlier covered by ThinkChange India.

A (micro)creditable partnership

India Post has inked an agreement with National Bank of Agriculture and Rural Development (NABARD) to facilitate micro-credit to women-run Self Help Groups (SHG) in eight states and north eastern states.

In this strategic partnership, India Post will lend the unparalleled reach it has gained into India’s remote villages and the credibility as a reliable family insurer through its various life insurance schemes to provide a big boost to NABARD for achieving its purpose of “facilitating credit flow for promotion and development of agriculture and integrated rural development.”

The latest agreement is inked after the resounding success of the pilot project that was implemented in Tamil Nadu as highlighted in Microcapital.org

This project was first implemented in 2006 as a pilot project in a number of post offices in two districts of Tamil Nadu…It was extended to three additional districts and all post offices in these five districts are currently participSo far, 165 SHGs have received these loans, for a total loan disbursement of Rs 1.35 million (USD 29 thousand). Additionally, 2,900 SHGs have been formed to create credit linkages with 2000 post offices in nine divisions of the state.

A presentation in India Rural Business Summit organized by Federation of Indian Chambers of Commerce and Industry (FICCI) provides finer details on the pilot’s working model, and metrics.

On the whole, India Post’s credibility among the rural and urban poor as one of the least corrupt, and hence the most reliable government organization, extensive reach, and success on a smaller  scale implementation seems to leave only the possible problems due to scaling up to worry about in this initiative.

MicrofIN[DIA]nce

Here are some major headlines with regard to microfinance in India:

A new technology platform designed specifically for microinsurance providers has been launched

ICICI and others have banded together to create a rating system for MFIs

A recent study indicates that microfinance is focusing more on the urban areas than before

NABARD sponsors trip for banking representatives to observe microfinance in Sri Lanka

[All articles from Microcapital.org]

Pioneers in Microfinance, Part 2: MYRADA

Today, Microcapital.org published the second part of their “Pioneers in Microfinance” series, in which they continued their interview of a pioneer in microfinance, Aloysius P. Fernandez, Executive Director MYRADA and Chairman of the Board of Microfinance Institution Sanghamithra Rural Financial Services.   To refresh your memory on Part One of this series, read this earlier post by Vinay.

The interview continues where it left off in Part One by outlining both the impetus and the process involved in establishing linkages between the Reserve Bank of India (RBI) and Self-Help Affinity Groups (SAG).  In the interview, Fernandez describes how MYRADA attempted to implement changes on a policy level by approaching RBI and the National Bank for Agriculture and Rural Development (NABARD) regarding the lending process:

In 1989, he [NABARD President and CEO P. R. Nayak] asked me, “Now, what policy change do you want?” I said, “Allow the banks to give loans without asking for the purpose. Why are you so particular about giving based on viable loans and unit costs?” They would give loans for sheep. There would have to be 20 female sheep and one male sheep, so that was supposed to be a viable unit. But, if you give such a big unit to a single woman, she has to leave all her other work and look after this. So, in order to survive she will sell two sheep. There goes your viable unit. We found that 60 percent of the recovery didn’t come from the asset, so why are you wasting your time? Let people decide [how to use their loans].

Fernandez then goes on to talk about the proliferation of NGOs based on the SHG model in India, and their perceived limitations, including potential for growth in the future: Continue reading