Shakti Livelihood Development Programme (Micro Finance)
Shakti Livelihood Development Programme is basically a micro finance program. Under SLDP, Shakti Foundation provides loan of Rs. 5000/- and Rs. 10,000/- per person to the poorest, weakest, dalits, exploited, deprived, women, mothers of child labourers and bonded labourers in order to promote the livelihood. Organization charges an interest rate of 18% per annum. Organization forms Joint Liability Groups (JLGs) of the poorest women before advancing the loans to them.
Each JLG consists of 5 women members. All the members are invited to apply for the loan after the formation of JLG and both JLG and Shakti Foundation prepare an agreement on Rs. 10/- stamp paper which contains the details of loan repayments. JLG is supposed to repay the loan on weekly basis. This way, each JLG has been provided Rs.25, 000/- or 50,000/- which need to be repaid back within the period of 10 months. The agreement contains the conditions that whoever takes the loan under JLG will exclusively utilize for livelihood purpose and will pay back weekly with the prefixed rate of interest. Shakti Foundation has started this program by providing Rs. 5 lakh to 125 poorest women members of 25 JLGs. The recovery of weekly instalment is 100%. Shakti Foundation has started this program in July 2010. Shakti Foundation currently is focusing on child labour affected areas of Firozabad and Agra districts. Shakti Foundation will expand its areas for the wider coverage of the poorest people. In addition to provide the loan to all these families, Shakti Foundation also provides them the vocational training and supporting in the marketing of the products made by them. Shakti Foundation needs more money to provide to these women because Shakti Foundation has its reach/access to twenty thousand women who are from child labour families, dalits, exploited and distressed.
Shakti Foundation visualizes reaching to twenty thousand women with the loan in 2 years period of time. In order to realize this objective, Shakti Foundation is contacting, networking and liaisoning with the banks and other financial institutions of Firozabad and Agra districts. Shakti Foundation is in the process to sign the agreements with different banks and financial institutions on micro insurance which will have the risk cover of the loan taken under the JLG.
Micro Insurance
To secure the loan provided and to save the survivors from botheration of re-paying the remaining loan amount in case of unfortunate demise of the loanee, an insurance of the loanee equivalent in the range of Rs 10,000 to Rs 20,000 is being done. In case the loanee dies the unpaid loan amount is realised from the insurance amount and the balance paid back to the survivors.
The facility of micro insurance is also available to members of target group, even if they have not taken loan and are willing. It is also available for lower level staff in the organisation.
