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Improving the lives of low income families through provision of financial services

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The company follows a double bottom line approach where improving the lives of people served is as important as being profitable.

The core activity of providing financial services needs to be beneficial to the communities we work with. Our Community service philosophy rests on three broad principles:
  1. Our core activity of providing financial services must improve the economic lives of our borrowers
  2. Any other community service  done which is beyond our core activity must reach a sizeable number of people, at least 20 percent of our borrower base
  3. Wherever possible, we will choose community activities which are part of a larger national agenda.
Financial Awareness Programs
Financial Awareness Programs - April 2016-Dec 2016
Spreading the message on Financial Literacy through village programs are helping us to create awareness among the financially excluded people in villages on various social security schemes like the PMJDY, PMSBY, PMJBSYand Sukhanya Suraksha Yojana Etc. In this quarter we have organized Eight [8] Literacy Programs in 5 different Districts- Chitradurga, Channagiri Davangere, Haveri, Uttar Kannada, in joint collaboration with Canara Bank, Syndicate Bank, SBI, Corporation Bank and Vijaya Bank. The program was delivered to more than 1200 villagers during this period
Awareness on Skill Trainings
Awareness on Skill Trainings - April 2016-Dec2016
We have been implementing various programs related to enrolment for skill development training. The objective of the program is to encourage youth [Both Men & Women] in the villages to undergo with the residential trainings, provided by RUDSETI, RSETI, VSETI& Other training institutions. We are organizing these programs with the kind support of RUDSETI -Dharwad, Chitradurga RSETI -Halyal, Raichur, VSETI– Haveri.In upcoming days we are working with more training institutions so that the villagers get the maximum benefit from these trainings. Presently we have conducted 23 programs by creating more than 50 beneficiaries.
Veterinary Medical Camps
Veterinary Medical Camps - March 2016 - Sept 2016
The objective of the program is to provide the Veterinary Clinical services for the benefit of rural people.We believe the veterinary aid camp will help the local people to improve their animal production. During this period four[4] Veterinary Health Camps were organized by Chaitanya for the benefit of rural farmers. Camps were organized in collaboration with Animal Husbandry Department– Koppal, Bellary, Davangere, and Shimoga District. During the camp, more than 350 animals were treated for different medical, surgical and gynaecological ailments. Residents of villages expressed gratitude to the Chaitanya & Veterinary team for its medical assistance
Livelihood Programs
Livelihood Programs - Sept 2016 - Nov2016
Within the last three months of period we have undertaken the project of making Tambulam Bags. The main objective of this project is to identify the basic tailors who are interested to stitch Tambulam Bags & earn minimal wages in their spare time. Initial survey was undertaken for men & women in Hosadurga, Jagalur and Chitradurga area. Finally the project was completed with producing 5000 Tambulam Bags after working with 8 different tailors staying in & around Chitradurga district. This project helped us to create livelihood income especially for Widow, Separated & Divorced women.
Tracking to see of our borrower's economic lives are improving
Tracking to see of our borrower's economic lives are improving (Use of Progress out of Poverty Index (PPI)

PPI is an index developed by Grameen Foundation which computes the likelihood of a borrower living below a defined poverty line. Today, for every borrower we lend to, we determine the PPI score and determine the average PPI score for every branch and for the entire company. The PPI score gives an estimate of the probability of borrowers falling below a certain poverty rate and also an indication if their poverty level is decreasing or increasing when observed over a period of time. The PPI scores of the company is discussed at every quarterly board meeting of the company to see if we are targeting the right profile of borrowers and to check if the poverty levels of our borrowers is decreasing over time.

PPI Data for Regions of the Company and for the Entire Company
January 2014 - March 2014 PPI Data
Region No. of Borrowers % of borrowers who fall in less than Rs. 125/day Poverty Rate
JAGALUR 4,538 82.86
HOLALKERE 3,404 74.91
BELGAUM  1,457 83.80
DHARWAD 2,730 81.49
KOPPAL 3,881 83.57
Company 16,010 81.33
Providing Livestock Services
Investment in milk livestock is an important source of asset building and income source for rural families. We have seen that our borrowers make one of two choices when it comes to milk livestock investment. One is to invest in local breeds and the other is to invest in non local breeds (cross breeds and special breeds). Local breed animals are cheaper, sturdy but yield less milk and hence lesser income. Non local breeds are expensive, need to be well taken care of, yield more milk and hence higher income. The default choice for most borrowers is to invest in local breeds. The investment required is less and the risk of death of animal is also less. But it is also a lost opportunity to increase their income. Higher loans can be given for addressing the investment requirement. To address the risk of animal death is more difficult. This is linked to the capability of borrowers to select the right non local breeds and in taking care of the non local breeds; good veterinary services; and insurance cover to take care of financial risk from unexpected animal death.

Providing livestock insurance in deep rural areas requires a structure to be put in place to make it operational and effective. The structure requires: one, every animal is to be physically checked and tagged. Two, when there is a livestock death; the death case needs to be investigated speedily to ensure that the death is not done intentionally to claim insurance. Since, there was no structure in place in the areas we operate; we had to develop a structure in partnership with the insurance provider.

The structure we have worked out is that our employee will do the initial inspection and tagging of the animal and also do the investigation and documentation required when there is an animal death. The insurer limits the maximum sum insured and puts a waiting period criteria (the minimum number of days after tagging before insurance can be considered) to take care of their risk.

It has taken us two years to come up with a structure and capability to physically check and tag an animal and to investigate and process speedily every animal death. At a region, which covers five to seven branches, we have a dedicated livestock officer. The livestock officer is the livestock expert for the region. He/she identifies after discussion with every branch those villages where larger livestock loans can be given. Larger livestock loans are given to cross breed animals and not to special breed animals which have even higher risk. Only villages, where there is some history of taking care of cross breed animals, where there is sufficient green fodder availability, where there is opportunity for selling milk commercially and there is an acceptable level of veterinary service is selected for large livestock loans. In such villages, borrowers are encouraged to come together as a group if they are interested in taking livestock loans. When they come in as a group, the whole process of training borrowers and tagging of livestock becomes more efficient. At every branch one loan officer is trained by the regional livestock officer in checking animals and in tagging them. When there is an animal death, the regional livestock officer does the necessary process.

The livestock officer in each region is also responsible for two other activities. One is to organize livestock health camps and two in improving the awareness among villagers in purchasing and taking care of livestock to reduce the risk of death and in increasing the productivity of animals.

A Case of Livestock Center(2013-14)

Borrowers Geeta and Manjula with their Cross breed Cows
Hanumanahalli is a village 2 km from our Sasvehalli branch in Davangere district. The village has 280 households. Sugarcane and paddy are the main crops grown twice a year in the village, which has good irrigation facilities. The average land holding among low income families is around 2 acres. The village has 80 milk yielding livestock with 60 of them being cross breed, 10 being local breed and 10 being high breed livestock. The village generates 300 litres of milk a day which is collected by two diaries. In the month of November 2013, we gave livestock loans to a 8 member group in the village. The 8 members were selected after assessing their ability to take care of cross breed cows. Each of the borrowers was given a 25,000 loan. Three of the borrowers bought buffalo's with an average price of Rs. 17,000 and 5 of them have bought cross breed cows with an average price of Rs. 25000.
In addition to the cost of the animal, borrowers spend an addition 1000 to 2000 for transport and broker charges(charges for the person who identified the seller). All the borrowers bought their cows from close by villages. The cross breed cows bought were yielding 8 litres of milk a day from November to March. In April and May the yield has dropped to 6 litres a day due to summer season. The borrowers spend Rs. 1500 a month on special feeds for the cows. At a price per litre of Rs. 23, the borrowers were earning between Rs. 2000 to Rs. 1000 a month after paying for the loan installments and animal feed. Once the loan is repaid in 1.5 to 2 years, the income from each cow will go up by another Rs. 1500 a month. In addition to this, most borrowers get their cows artificially inseminated. The calf that is born is of value if it is a female. Either it can be sold or can be tended to until it grows to yield milk. One of the cross breed cows died 3 months after purchase. The death happened 12 days after the cow delivered a calf. Both cow and calf died. The borrower Pushpa got Rs. 20,000 as insurance claim. The borrower did lose around Rs. 6000 to Rs. 7000. The borrower has accepted this loss as normal business risk. If the loss was the entire loan amount, it would have been a huge financial burden. Due to insurance cover, Pushpa is still keen on investing in another animal to increase her income
Financial Inclusion
Participation in the Prime Minister's Jan Dhan Yogana (PMJDY)
In the year 2014, it was decided to focus our community service efforts by participating in the PMJDY program. Participating in this initiative met the criteria of reaching a sizeable number of people and being involved in the larger financial inclusion agenda of the nation. The goal taken up was of ensuring every borrower of the company, to have an individual bank account. The approach was a local collaborative approach by helping our borrowers to open bank accounts in their service area bank branch. This approach required us to work with 574 bank branches of 21 PSU & RRB banks and open accounts for our borrowers. This initiative was successfully done over a period of 5 months with all field employees of the company being involved. Till 26th Jan 2015, the company has opened 18,423 bank accounts. When the initiative started 32% of borrowers did not have bank accounts. By end of January only 2.5% of borrowers did not have bank accounts.

*Other banks includes Bank of India, Bank of Maharashtra, Axis Bank, Indian Bank, Indian Overseas Bank, ING Vasya, Union Bank of India, Karnataka Bank, ICICI Bank, UCO Bank and central Bank
Financial Literacy
In addition to opening bank accounts, education of the company's borrowers regarding the various aspects of the PMJDY program, the benefits of opening the bank account and the facilities which will be provided as an account holder. The financial literacy was done my making a short video in the local language and showing it to the community members by means of a projector. Till December 2014, 69 video shows were organised comprising of 3,335 total participants.

Pradhan Mantri Jan Dhan Yojana