Microcredit Federation

The overall objective federating the self-help groups has to promote a financially viable member managed mutual benefit microcredit delivery institution at the grassroots level. The foundation of federation has been based on the concept of self-reliance by creating minimum poll of revolving funds at grassroots level through regular monthly savings by the members to cater the credit needs of its members even without difficult to establish formal credit linkages from banks in an urban situation. Hence the federation is a network of SHGs to aggregate its members and their accumulated savings with a mandate of developing sustainable collective support system amongst its members to attain the goals of economic and social empowerment of poor members and their capacity building.

The federation is based on a decentralized management structure by the group level decisions are taken with out any interference from federation to promote sense ownership among its members. The federation’s responsibility has been prioritized to provide essential services to its network self-help groups with record-keeping, monitoring and minimize default in repayment through timely follow-up. The revenue generation mechanism has been effectively developed through a revenue sharing system by the SHGs/members by voluntarily contributing a pre-decided percentage of dividends earned by them. The creates win-win situation at both levels of Federation and Group members through ensuring quality support system and credit management to increase the volume of annual revenue volume. The followings are basic objective of federation:

• To provide equitable and affordable financial services to women through the formation of federations
• To organize women into strong and sustainable self help groups, clusters and federations as a forum for sharing, learning, planning and monitoring
• To provide financial services such as savings, credit and insurance to the members
• To develop a community based MFI own by and managed by the poorest of the poor women;
• To develop and sustain a microcredit system even in the absence of much needed formal linkages;
• To facilitate linkages between self-help group-federation and formal agencies/local institutions.
• To have better access to development information.
• To help in achieving sustainability of SHGs and federation.
• To support and strengthen self-help groups and its leaders through training, information dissemination, on-site support, etc)
• To enhance the capacity of member-SHGs in one or more of a variety of fields (bookkeeping, accounting, marketing, financial management, advocacy, bank-linkage, accessing government schemes, to name some).
• To create the political/social space that women need to live their lives as fully as they desire to.
• Develop Monitoring Information System

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