REPCO Foundation for Micro Credit

Repco Foundation for Micro credit (RFMC), an NGO promoted by Repco Bank (Govt. of India Enterprise) was registered, under Companies Act 1956 (Section 25). It is a not for profit entity for extending supporting services to SHGs financed by the bank solely with a view to increasing the income level and eventually improving the standard of life of the target group.

MISSION

Committed to the development of SHGs for providing banking facilities as a channel to extend micro credit to reduce poverty and for empowering poor women and men. RFMC aspires to evolve into a professional player and a preferred MFI(Micro Finance Institute) in bringing about a perceptible change in the lives of rural / urban areas by financing through formation of SHGs

VISION

Repco Foundation for Micro credit aspires to be a unique MFI promoted by REPCO Bank, a Government of India enterprise to extend best service to the SHGs through a team of development people with integrity of high order. Poverty and empowering the less privileged would be the driving force

FOCUS

Improvement in the level of education offered to the children of SHG members e.g. Their children pursuing higher studies

Providing better housing facilities – construction of new houses / renovation of existing houses.

Improvement in the business activities among members of SHGs. Consequent to wide spread awareness created by the foundation in regard to various economic activities.

Intensive agricultural practices and allied activities resulting in increased income level, which enabled creation of assets in a no. of cases.

In certain areas the tea pluckers have become tenant cultivators of tea land taken on lease with financial assistance, hopefully they will soon become the land owners.

It also brought improvement in confidence level of the members, enhanced mutual consultations, improved health care practices, gender equation etc. among the group members.

Introducing mobile banking or opening of satellite office to outreach the unreached in the remotest place who could not have access to financial institutions and also keep down their transaction cost.

About centpercent recovery achieved in respect of loan sanctioned to SHGs

Working out backward / forward linkage at field level.

Group formation

To conduct baseline survey to assess the level of poverty, social issues and identify households (target groups)

To arrange preliminary meeting of members and assisting them to form SHGs.

Imparting training and assisting them to open bank accounts.

To encourage savings among group members

Capacity building

To conduct membership training to create awareness, skill training for income generation.

To organize leadership training for improving sustainability

To organize exposure visits to institutions / successful groups for improving confidence.

To build credit proposal and secure sanction of credit limits.

To arrange for documentation at their doorsteps and provide guidelines for best utilization of credit

To attend group meetings, organize mass meetings to disseminate knowledge and guide for regular repayment.

To identify the future needs viz. capacity building, financial & social activities

To pave way for sustainability

Micro credit programme implemented by REPCO bank

REPCO Bank in tune with its objectives has formulated Micro Credit schemes for poverty alleviation among rural poor more particularly among the repatriate settlements in the Nilgiris District through formation of Self Help Groups (SHGs) based on the study conducted by the bank in 2002.

The study report revealed that there was a lot of scope for implementing Micro Credit programme as every family was living in a debt trap and indepted to the local moneylenders who were charging interest at exorbitant rate at 240% which has made them to lead a miserable life and continue to live in poverty. The banks operating at the centre were not responding to the demand of the people resulting inadequacy of financial outreach by the formal banking system.

The bank which had started with 30 groups with a small credit portfolio of Rs.3.00 lakh, has now expanded its credit activities to more than 12000 groups with credit disbursement of exceeding Rs.100 crore within a period of three years and also achieving almost 100% recovery since inception. Under this model opportunities were provided for regular savings among the members of groups. A flexible approach was adopted with regard to fixing the quantum of finance extended to the groups which was mostly based on their requirements of funds, kind of economic activities engaged their capacity.

After having achieved this splendid performance, the bank has now proposed to go in for a massive expansion programme in the remaining districts all over Tamil Nadu with a focused attention on Mirco Credit programme with a lot of innovation to suit the most needy people. Accordingly a four year perspective plan for assisting 20,000 groups with credit deployment of 100 crores before March 2010 has already been drawn and is being implemented by us from the current year.

In the past we were depending on the NGOs for sponsoring of groups, capacity building activities etc., as our Bank was confined to lending only. Since the services of NGOs operating in a few centers were not satisfactory and left much to be desired for creating awareness, skill among the target groups, it was felt necessary to form a subsidiary, which should be of our own organization providing effective supporting services for our target groups. Accordingly our subsidiary under the name and style of "Repco Foundation for Micro Credit" has been registered as Section 25 company not for profit. This organisation shall be Role model for other NGOs in extending services to the self help group members.

This is a unique model, which is first of its kind in India being experimented by our Bank, wherein the target groups are sponsored to Bank by our extending credit facility and they also undertake monitoring capacity building activities of the beneficiaries etc., for improving the skill and consequently their credit absorption capacity. After developing necessary expertise in this regard, the foundation may graduate into an MFI, thereby discharging dual function of both lending as well as providing other services to the beneficiaries. There is distinct advantage in our own subsidiary playing the role of an NGO as we can have effective control over them and also ensure fair practices for the betterment of target group.

Partnership with SIDBI

The Bank has joined hands with SIDBI as partner in extending Micro finance to a large number of SHGs for productive/basic requirements and housing purposes coupled with package for capacity building activities of the beneficiaries for which necessary funding is being extended by SIDBI by way of out right grant.

MOC between EXIM bank

MOC between EXIM bank will help in the following areas:

This understanding will enable to reach rural poor for promoting Export based activities of SHGs promoted by the RFMC

Identification of suitable buyers / partners for facilitating export business of the SHGs promoted by the Repco Foundation for micro credit.

Exchange of information on international markets for various products, technology, trade, business and investment opportunities to facilitate increased co-operation for commercial exploitation in overseas markets.

Exchange of publications and other useful literature to keep abreast of latest developments in respective fields of both institutions.

Keeping each other informed of their various activities for the limited purpose of increased collaborations and export facilitations.

IMPLEMENTATION OF MICRO PENSION SCHEME OF UTI MF

REPCO Bank is one of the pioneers to implement Micro Pension scheme facilitated by UTI-MF to provide the much-needed social security for people from the unorganized sector.

The Bank has large concentration of SHGs in southern states. At present there are 4500 SHGs consisting more than 75,000 members of which majority are women beneficiaries.

Initially around 10000 members will be joining the scheme. It is proposed to implement the scheme throughout the year by remitting contributions for the pension fund by every month. It is aimed to cover 50% of the SHG members under this social security scheme during the period of 3 years and to collect the contribution to the tune of Rs.1.00 crore from 50000 members in a short span.

MICRO INSURANCE SCHEME OF LIC
(Janashree Bima Yojana)

Micro finance comprises Micro insurance as one of its component to provide social security for the SHG members by a bank as a nodal agency.

An arrangement has been made with LIC to cover SHG group members under master policy who are operating a/c. with our bank. As a Social Security to the members of SHGs the Janashree Bima Yojana (JBY) of M/s. Life Insurance Corporation of India has been taken up.

Salient features of this scheme:

The SHG members between ages 18 yrs and 59 yrs

Below the poverty line are covered

Policy will be in the name of the Repco Bank.

All claims will be settled through our Repco Bank.

Subsided by the Central Govt. 50% of the premium is borne out of the Social Security Fund established with LIC of India. Hence the member has to pay the remaining 50% of the premium.

Benefits:

n the event of death by accident or partial / total permanent disability due to accident the following benefits shall be payable.

1.On death due to accident : Rs.75,000/-

2.Permanent total disability due to accident : Rs.75,000/-

3.Loss of two eyes or two limbs or one eye and one limb in an accident : Rs.75,000/-

4.Loss of one eye or one limb in an accident : Rs.37,500/-

Premium:

Annual premium of Rs.200/- per member. Out of this Rs.100/- is borne by Social Security Fund established by Govt. of India with LIC. Hence the member has to pay only Rs.100/- per annum.

LIC of India provides an additional cover for Rs.5000/- for a premium of Rs.30/- per year, which is an optional group insurance cover in addition to the JBY premium. Thus by paying Rs.130/- per member, the member can be covered under JBY and the spouse can be covered under GI for Rs.5000/-.

LIC is issuing master policy by every month in respect of premium collected for the concerned list of SHG members.

Add on Benefits:

The children of the members covered under JBY scheme will be given scholarships also on selective basis under Shiksha Sahaya Yojana Scheme.

Maximum of two children studying in classes 9, 10, 11 & 12 will be paid a monthly scholarship of Rs.100/- per student payable quarterly. No separate premium is charged.

MOU with m/s. DHAN foundation

M/s. Dhan Foundation will provide the strategic guidance and operational support to implement and expand the SHG programme.

M/s. Dhan Foundation would provide capacity building and handholding support which would include designing and organizing training programmes, exposure and exchange visits for the programe staff and people leaders in coordination with Repco Foundation.

Contact

REPCO FOUNDATION FOR MICRO CREDIT

(Promoted by Repco Bank - Govt. of India Enterprise)

"Repco Tower", 33, North Usman Road,

T.Nagar, Chennai - 600 017.

Phone : +91 44 2834 0715, 2834 2845

Mobile : 094444 41460

Email : rfmc@repcofoundation.com

website : www.repcofoundation.com