“ All round and large scale development requires a combination of capacities and efforts which cannot be provided by a single agency or system. To ensure that the benefits of development reach the people, in general and poor, in particular, it is necessary the government, the private sector and NGOs become partners and work together. Micro credit is one proven field where all agencies can involve themselves in providing financial inclusion to poor and marginalized people, who are regarded as financial risk by banks. Access to credit to meet necessities of life, cope with family situations such as children’s education, starting or expanding small business are some of the core areas of micro credit. This should be the focus of MFIs and NGOs.
I. An escalating variety of loans to meet the needs of the beneficiaries
Blaze Trust offers wide range of Income Generating (IGL) as well as Non Income Generating (Non –IGL) loan products to its clients. These products have been designed to suit beneficiaries requirement, having been based on the their feedback and demands generated on the field. Amongst IGL products, loans are offered in the range of Rs5,000 (to cater to poorest of poor individuals) to Rs20,000( to cater to mature clients with good repayment track record). Amongst Non‐IGL to improve educational facilities for children a loan of Rs7500 are offered. Details of the products and their various features are given below
|Loan Product||Payment Frequency||Tenure||Grace Period||Interest rate ( % )||Processing fee ( %)|
|Income Generating Loans Rs5,000||Weekly||35Weeks||1 Weeks||21.46 Diminishing||1%|
|Income Generating Loans Rs10,000||Weekly||49Weeks||1 Weeks||21.46 Diminishing||1%|
|Income Generating Loans Rs15,000||Weekly||49Weeks||1 Weeks||21.46 Diminishing||1%|
|Name||Payment Frequency||Tenure||Grace Period||Interest rate ( % )||Purpose|
|Non-Income Generating Loans Rs7500||Weekly||35Weeks||1 Weeks||21.46 Diminishing||Educational Loan|
II. Stabilizing Interest Rates and Processing Fees
BLAZE TRUST believes in distributing benefit of economies of scale with its beneficiaries. Thus despite increase in operating expenses due to continuation in branch expansion, the institutional large operating expenses has increased its interest rates across all product categories in its own portfolio. But certainly its has stabilized is interest rate to 21.46% Diminishing Rate during FY2013-15 from 17.97 during the period FY2012-13 . Thus interest rate for weekly frequency repayment loan up to the size of Rs15,000 has declined over the last two years. And the processing fees have been stabilized to 1%, which has resulted in significant reduction in upfront borrowing costs for the clients.
Interest Rate Stabilization over Years
II. Enhancement of Horizontal Expansion
Over the last two year we have received requests from large numbers of BPL household who don`t have access to affordable and efficient micro finance facilities in their area, this paved way for the institution to resume horizontal expansion of its branches. During the period it has extended the services to 4 more districts. Apart from this in order to diversify presence across states, the institution started operations in the State of Kerala. Thus Coimbatore, Nillgirs, Tirupur, Erode and Palakadu regions were added in Tamilnadu & kerala states. In total 387centre were operating during the period FY2014‐15. The district‐wise coverage as of March2015 is as follows
District Wise Coverage
|Sl.No||Name of the District||Total Centre|
III. Diversification of Business
It is important that poor families are able to access a wide range of financial services and invest in livelihood generating opportunities to improve their standard of living. BLAZE TRUST believes in providing efficient financial services to its clients so that not only they generate income through its credit services but they also have safe avenues to invest. With this in mind the institution expanded its savings and other financial services ( like opening of OAP and MNREGS accounts, Oldage Pension disbursement, Collecting Deposits, Dealing with day to day cash transaction etc across regions.)
JLG Model ( Joint Liability Group)/ Grameen System
Beneficiary identification will be done through participatory needs assessment in the urban & village level. This stage is very significant as our project should be addressing the needy community. Socio, economic, political and cultural areas such as basic amenities, income sources, leadership, village infrastructure, health status and gender would be studied during this needs assessment. This study will give wide understanding about the village and the priority areas which needs to be focused. According to the needs training and financial assistance will be introduced under JLG Model with assistance from Banks.
Savings and credit:
a. Formation of Self-help groups:
SHG’s & JLG’s are already initiated in the needed villages. The new women groups would be given training on understanding of the organization’s vision, objectives, activities, members’ features, group features, conceptualization of group meetings, organizing meeting, importance of savings, loan requirements and social security schemes.
b. Savings and credit:
The JLG women members will be enrolled as the member of “Self Help Group” and opened a bank Account to deposit their weekly savings regularly. They will be encouraged to do savings in the Bank Account. Loan disbursal process will be slowly initiated as and when the need arises and provided the SHG has fulfilled the criteria for obtaining loan. However the need for loan obtainment will vary from education, income generation, and other emergency needs. It shall be group loan. The group would take collective responsibility for the repayment.
C. Self-Help Groups:
Self-Help Groups will have the following activities
- Enrolling SHG to open Bank account
- Encouraging savings and assure the loan disbursement and repayment
- SHGs could also submit requests for particular training or awareness programme for their group or area as and when there exits a need.