February 02, 2023
When leading microfinance companies arrange community development programs, they emphasize more on financial literacy, financial education, and financial inclusion which together result in financial development. Making people aware of microfinance companies, financial tricks, tips, savings, investments, etc., will do a financial miracle as a contribution to society. As a CSR activity, non-banking financial institutions run various community development programs for food, health, and education of weaker sections of society.
In this article, we’ll understand how community development programs by microfinance companies are impacting society.
Impact of community development programs
The implementation of government policies aimed toward marginalized communities can be facilitated through microfinance has the following impact:
About 95% of some loan products by microfinance companies are for women, along with the disabled, the jobless, and even those who only beg to cover their basic requirements. Community development programs are executed by Socially responsible companies by raising some funds and employing their staff to educate women. This creates hope for women’s empowerment.
To combat poverty, they provide customers with small loans with no collateral and simple credit. By running financial education campaigns under CSR programs, micro-finance companies break the cycle of poverty. It makes possible future investments.
Basic needs are fulfilled in rural households
Community development programs include helping the poor and needy with food, health kits, and shelters. This aids in developing a saving culture and provides the poor and marginalized members of society a base support to restart their life with full potential.
Micro-finance companies help business owners in underdeveloped nations and communities start up new employment opportunities for others.
How Community Development is a boon for the underprivileged?
Community development is the act of fostering the economic and social advancement of a community while relying on local initiatives. It is achievable when all forms of assistance—financial and non-financial or through microfinance companies link to social and community recognition of the poor and underprivileged, universal access to education, the elimination of child labor, etc.
The community has found Microfinance as an effective tool for development assistance. It spread to millions of underprivileged individuals and became a revolution. Through financial and social intermediation, it is a workable alternative that enabled the hitherto unreached to become economically and socially empowered.
Group-lending contracts with joint liability in micro-finance have a potential innovation or a noble solution for flaws in rural credit markets to reduce risks in the credit markets. The group motivates or requires taking on the tasks of payback selection, monitoring, and enforcement in a cost-effective way because of the joint liability of the group members. This results in lower transaction fees, a higher volume of transactions, and better access to credit for those who otherwise couldn’t afford it.
Advantages of community development programs by NBFCs
- More households can increase their existing opportunities thanks to CSR programs by microfinance companies, which allows for greater income accumulation.
- It enables people to uplift their living standards. People get access to required basics like food, shelter, education, and health treatment which can quickly end poverty.
- It benefits those who are frequently neglected in society. Women, those with disabilities, the unemployed, and even those who merely beg to cover their necessities receive almost 95% financial, and emotional support through community development programs arranged by NBFCs.
- Future investment opportunities are made possible through financial education programs. By effectively utilizing the amount of available money, a downtrodden section of society can break the cycle of poverty. The credit goes to these CSR activities.
- It has the potential to generate employment. Additionally, small programs arranged with a noble cause enable business owners in underdeveloped communities to establish new employment prospects for others.
- Community development programs work for the overall financial, social, mental, and physical development of society.
At the end
In India during the past ten years, community development programs by microfinance companies have delivered tremendous growth. However, the majority of microfinance service providers have placed a strong emphasis on growing the reach of their programs, paying little attention to the breadth, excellence, and viability of their financial offerings. Still, CSR programs by microfinance companies lead to strong helping hands for the underprivileged. They donate their manpower and some amount of their financial resources for food, health, shelter, and education of the needy, and this is creating miracles for society.
Chaitanya India being a responsible financial company in India, is a firm believer in this concept of community development programs by Non-Banking financial companies. For the previous several years, the company through its multi-facet community development programs has given a value addition to society.
How CSR programs by Chaitanya India helped people during the crisis?
In addition to providing financial services, Chaitanya strives to improve the lives of those who are underserved as a whole. Chaitanya aspires to make a significant contribution to India’s social, economic, and environmental development. To that end, the company takes part actively every year in community-building initiatives including disaster relief, healthcare, education, skill development, and other volunteer work.
Flood Relief camps
CSR programs like flood relief camps, and Flood relief funds raised by Chaitanya India worked as a true helping hand for those who were in acute need of basic life-saving elements like food, medicines, and shelter. The team was proactively working in rural flood-affected areas of Mysore city by supplying articles of basic needs including food, medical kits, etc.
Covid relief kits
Chaitanya’s CSR initiatives helped people during COVID, the toughest period of all time. The team was voluntarily active throughout the period with vaccination drives, supplying COVID relief kits to nearby police stations. Chaitanya’s Karnataka team held vaccination clinics and distributed covid safety supplies. Each COVID safety package includes items like masks, liquid hand wash, hand sanitizer, and machine sanitizer.