Methodology Of Extending Credit

Asmitha follows the credit methodology of Self Help Group Lending wherein the loans are disbursed to the members of a group after the joint undertaking of liability by all the members within the group. The members in a group are selected so as to be in the same age group and residing in the same locality being friends but not from family. In case of problems in recovery from even one of the members, the system of joint liability ensures recovery of the dues from all the members within a group.

The methodology of loan delivery is initiated by the field staff of Asmitha at a meeting organized in the villages. The prospective women clients are briefed on the loan delivery program and are motivated to form groups of five (5) members based on a specific criteria constraint. The groups form a center consisting of 35-40 members (maximum 8 groups).

The group members undertake the responsibility of approving the loans, checking the loan utilization and repayment after their enrolment as members. Loans are disbursed in a staggered ratio of 3:2 in order to build up group peer pressure. The loan utilization is closely monitored by the project staff of Asmitha.

Apart from the loan disbursement and recovery schedule, the members are invited to attend workshops and training programs, which is a platform for all the members to come together and share their experiences. The exposure visits enable members to learn about the various activities undertaken by their counterparts in other villages/centers thereby increasing the number of income generation options and levels of confidence among the members.