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GRAMEEN KOOTA Bangalore

Faculty Guide Prof. Madhavi Mehta Presented by Anand Arup (24004) Shandilya Ankur (24002) Madhu V (24016) Ralhan Joginder (24049)

OUTLINE      

Backdrop: Need for Micro credit Genesis: Grameen Koota Methodology and Sources The Universal Business Model Strategic Issues Learning

OTS: PRM 2003-05

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BACKDROP 

In a population of 100 crore in India: 



40 crore live below poverty line

Annual credit usage of the poor:  

6 crore rural households use an average of Rs. 6000 each 1.5 crore urban households use an average of Rs. 9000 each Source: Sa-Dhan

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BACKDROP 



Cont’d…

The current annual credit usage estimate: Rs. 50,000 crore Supply of credit to the poor  

the total institutional supply barely crosses Rs. 1000 crore only 2% of the existing credit usage by poor families. Source: Sa-Dhan

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BACKDROP 

Sources of Credit: 

  

Cont’d…

Money Lenders, Pawn Brokers, Grocers, etc.,

Vicious Cycle of Poverty Innovations in Developmental Programmes Inspirational Success Stories

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GENESIS 

Inspired by the story of Prof. Muhammad Yunus & Grameen Bank



“Give us credit” by Alex Counts



1997 - Contact with Grameen Bank and gathering more info & literature



1998 - Training at Grameen Bank, Bangladesh & submitting project proposal



1999 - Seed capital funding from Grameen Trust OTS: PRM 2003-05

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GENESIS 

 

Cont’d…

Grameen Koota was established in May 1999 as a Micro credit program, under T. Muniswamappa Trust A Section 25 Not-for-profit Organization Grameen Koota envisages to provide services to:     

the poorest women without collateral using peer pressure and peer support in rural and urban areas

OTS: PRM 2003-05

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METHODOLOGY & SOURCES      

Understand Grameen Koota using the Universal Business Model Semi structured Interviews with Top Management, Middle Management and Operational Staff Field Visits (Branches) Grameen Koota Literature Competitor Analysis Internet

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MISSION & VISION 

Grameen Koota’s Mission and Vision Statements address:      

Empowering Women Impacting poverty Creating livelihood opportunities Addressing the issue of equality & social justice Reducing vulnerability of the poor Providing institutional credit to unorganized sector M&V

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CHALLENGE Caught in the vicious cycle trying to alleviate poverty

MFI’s outreach becomes limited and stagnates

Earmarked microcredit funds (for poverty alleviation) not forthcoming, from Banks/ Financial Institutions

Loan Portfolio does not grow

A great mismatch in demand and supply for the poor – the poor remain poor

Rising Deficit Affects interest income necessary for MFI to cover its operational costs OTS: PRM 2003-05

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CHALLENGE

Cont’d…

MFI’s outreach increases Banks / Financial Institutions support NGO MFI’s

Loan Portfolio grows Poor get access to capital and increase their income

Reduces the deficit – MFI becomes operationally viable Interest income for MFI increases

Breaking the Vicious Cycle

Rising income translates to better food, health, education, arrest of migration to urban areas and rising above the poverty line, revitalizing rural economy

The poor get empowered and start accessing mainstream financial services OTS: PRM 2003-05

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UNIVERSAL BUSINESS MODEL PERFORMANCE

IDENTITY PURPOSE

CULTURE INFLUENCES

STRUCTURE DELIVERABLES PARTICIPANTS ACTIVITIES

ENABLERS

1. IDENTITY 



A Micro Finance Institution registered under T. Muniswamappa Trust on 21st June 1995 under Company’s Act An Institution lending money to poor women at their doorstep

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2. PURPOSE 



To lend money to poor women without collateral to improve their financial, social and economic status To team up with banks and other financial institutions to alleviate poverty from rural Karnataka

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3. STRUCTURE      

Top Management (CEO & COO) Middle Management (Functional heads) Officer Level (Project Managers) Assistant Level (Trainees & others) Field Officers (Branch & Kendra Managers) Others Organogram

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4. PARTICIPANTS      

Trustees Managers Workers Clients SuppliersList Indirect participants

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5. ENABLERS     

Structure Dedicated workforce Computers and MIS Financial resources Relationship with members

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6. ACTIVITIES  



Line of business is to supply timely credit, savings & insurance facilities to the poor. Support activities - Training to members & staff - Marketing their products - Providing systems support to operations Grameen Koota operates at two levels: Field level & Head office level

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7. DELIVERABLES  

The efforts result in products, services or both Grameen Koota offerings  Saving Products and services Kendra loans, voluntary savings, training savings etc. 

Loan Products and services income generation loan, welfare loan, emergency loans etc.

 

Procedure for availing the offerings Loan utilisation checks

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8. INFLUENCES 



Influences may constrain what the organization can accomplish, threaten its very existence, or open up opportunities which can be exploited INPUT Level - Funding Agencies - Other MFIs like Sanghamitra, BSS etc



THROUGHPUT Level - Safety of field staff - Information loss OTS: PRM 2003-05

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8. INFLUENCES 

Cont’d…

OUTPUT Level - Catering to diverse set of peoples - Large untapped market available - Other MFIs like Sanghamitra, BSS etc - Rating agencies

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9. CULTURE     

Collective stage (growth stage) Still Evolving Two distinct noticeable cultures at the head office and the branch level Combination of Democratic and Autocratic management style Consistent support on behalf of management

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CULTURE 

Degree of freedom, independence and responsibility  

 

Cont’d…

At Head office At Branch

LOW HIGH

Informal, cordial and friendly work culture Low Perks and benefits compared to Other MFI

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10. PERFORMANCE 

    

Participant satisfaction opinions during the SED workshop Innovation of cattle insurance Portfolio at risk 0.0% No. of active loan clients per staff 150 Return on assets -1.91% Break Even at 35,000 members in 2005 Statistics

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Ratios

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STRATEGIC ISSUES 

H R Policies 



MIS  



Part of Administration Geographical Constraint Slow exchange of Information

Competition  

Currently the Best MFI in Karnataka Larger MFIs from Andhra Pradesh, Tamil Nadu planning to expand into Karnataka

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LEARNINGS



Full Fledged Pro-active HR System Impact Assessment Improvised MIS



MFIs, A Panacea for the Poor…?

 

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STATISTICS 

As on 30th June 2004 - 86 Staff (20 HO & 66 BO) - 12 Branches - 12,092 members - 15,359 Income Generating loans - Total loans issued Rs 78,143,320 - Loans outstanding Rs 23,452,432

Back OTS: PRM 2003-05

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MISSION & VISION 



MISSION - To help poor women in rural areas and urban slums with micro-credit, to work themselves and thereby their families out of poverty. - To constantly deliver need based financial services in a cost effective manner and to become a financially sustainable micro-finance institution for the poor. VISION “We envision building a Micro Finance Institution, which will eventually be owned, managed and used by poor women.” OTS: PRM 2003-05

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SUPPLIERS         

Grameen Trust, Bangladesh FWWB, Ahmedabad Deutsche Bank, Mumbai ICICI Bank, Mumbai HDFC, Bangalore Canara Bank, Bangalore ING Vysya Bank, Bangalore UTI Bank, Bangalore SIDBI, Bangalore

    

Deutsche Bank, USA CGAP-World Bank, USA India Development Service, USA Grameen Foundation, USA Grameen Foundation, Australia

OTS: PRM 2003-05

Back

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SUPPLIERS Sanctioned Amt. in Rs 2,000,000

Amt. Availed in Rs 2,000,000

Amt. Repaid in Rs 2,000,000

15,000,000

13,000,000

4,077,500

8,922,500

Onlending

3,648,256

3,648,256

143,912

3,504,344

Onlending

352,544

352,544

43,173

309,371

Operating Expense

HDFC Ltd., Bangalore

9,990,000

4,190,000

1,051,790

3,138,210

Onlending

UTI Bank, Bangalore

12,500,000

10,550,000

0

10,550,000

Onlending

Deutsche Bank, Mumbai

2,500,000

2,500,000

0

2,500,000

Leveraging

SIDBI

4,000,000

2,000,000

0

2,000,000

Onlending

Total

49,990,800

38,240,800

7,316,375

30,924,425

Organisation Canara Bank FWWB, Ahmedabad Grameen Trust, Bangladesh Grameen Trust, Bangladesh

OTS: PRM 2003-05

Balance as of Purpose 31/03/04 in Rs 0 Onlending

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