A business model that won an award and gave 'life' to the poor

As an NGO, IVDP has facilitated loans totalling Rs 2,406 crore.

It was in 1979 that Kolandei Francis, this year's Ramon Magsaysay award winner started Integrated Village Development Programme to help the poor in the Krishnagiri district in Tamil Nadu.

What started off with 10 groups of 20 members each in one village in 1990, spread to other nearby villages to 400-500 groups in the early 90s.

Today, there are 8231 groups or Sanghams spread over Krishnagiri (5,912), Dharmapui (1,660) and Vellore (659) districts of Tamil Nadu. The groups have 153,990 members with a saving of Rs 221 crore (Rs 2.21 billion). So far, the groups have distributed dividends totalling Rs 132 crore (Rs 1.32 billion) among the members.

As an NGO, IVDP has facilitated loans totalling Rs 2,406 crore ( Rs 1,201 crore (Rs 12.01 billion) from the Sanghams, Rs 1,156 crore (Rs 11.56 billion) from banks and Rs 49 crore (Rs 490 million) IVDP loan) to its members. Banks that are involved with IVDP are Pallavan Grama Bank (a Regional Rural Bank sponsored by Indian Bank), Indian Bank, Bank of India and State Bank of India.

IVDP has 37 federations and 340 people (selected from the Sanghams) working for IVDP to supervise the activities of all the 153,990 members. The chief co-ordinator of the entire 8231 groups, Maniratnam has worked in the group for 16 years before taking over the top job.

The pecking order in the functioning of the Sanghams is like this. At the lowest level are the 153,990 members. There are 8,231 Animators, (Leaders) each in charge of a group.

Above them are the Field Supervisors and there are 221 of them. Then come the 37 Cluster offices and 4 Area Supervisors. All this is managed by the SHG Chief Coordinator.

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There are mainly two types of loans for the group, bank loan and Sangha loan which is from the savings of each group. In addition, the NGO IVDP also disburses some loans.

Banks give loan only to the group at the interest rate of 12 per cent and not to the individuals. Once they get the loan from the bank, the group decides who in the group would get it. Repaying to the bank also is done through the group.

If the group does very well in repaying, the bank gives further loans.

The Sangha loan is given from the savings (Rs 221 crore) made by the members of the group. The savings of the group also fetches them an interest of 1-2 per cent. What Kolandei Francis follows is a simple Self Help Group managed by themselves. Today, the members are eligible to get a loan of Rs 50,000 from the Sangha and another Rs 100,000 from the bank.

Kolandei Francis says, "All the money is managed by the members as they are made responsible for their own money. At every meeting, we insist that they save. Today, that is how the groups have a savings of Rs 221 crore (Rs 2.21 billion). The whole aim of the project is to make them save and be self sufficient and not depend on bank loans. The ultimate goal of the project is that and it is not yet achieved. Yes, there are some groups which have enough savings that they don't go for bank loans at all."

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Muniratnam, chief co-ordinator of SHGs

My family was extremely poor before I joined IVDP (Integrated Village Development Program). My husband used to work as a coolie and though I had studied up to the 12th standard, I had no job. We had a tiny piece of land but we could not do any farming as there was no water. We were so poor that I had no idea where the next meal would come from. We had only one daughter at that time, yet we were not able to give her good food or clothes.

It was 18 years ago that I was first initiated into Sangham (Self Help Group started by IVDP). At that time, Sanghams had just started. So, Sir (Kolandei Francis) had come personally to our village and advised us to start a Sangham. I had no idea at that time what a Sangham was. I was a little bit scared also to join a Sangham and give money to the group.

Sir advised us to put in some money as savings every time we met. In our first meeting, I gave Rs 5, and to save Rs 5 was so difficult for me at that time. Today, all of us put in Rs 100 every time we meet. There were 20 of us in our group and all of us pooled in Rs 5 each and we deposited the amount in a bank.

After six months, from our savings, we started giving Rs 1,000 loan to one member. After a year, with the help of IVDP, one member got a loan of Rs 10,000 from the bank. Even after starting the Sangham, the first two years were really tough.

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The difference between taking loan from other moneylenders and the bank or our Sangham is that we pay only 12 per cent interest to the bank and 1-2 per cent interest to the Sangham.

After 2 years, I got a loan of Rs 50,000 from the bank and the first thing we did was, build a proper house. Then, I started a provision store for my husband. Today, we have whatever we want; fridge, TV... everything. I have three daughters and all of them are studying well. My first daughter is doing her final year degree, and the other two are in school.

There was a time we didn't know what we would have to eat for the next meal but today, we can eat whatever we feel like.

I started as the Animator of the group that is the designation for the person in charge. Because I had studied up to 12th standard, I was made the Field Supervisor of the IVDP within a year. Next year, I became the Area Supervisor in charge of 250 Sanghams, and then I worked in the Cluster Office of IVDP.

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My job was to check the working and accounts of all the Sanghams and then report the accounts to the IVDP head office. After that only, we deposited the money in the bank. I also advised other members and groups on how to save, how to make better use of the loan, etc.

Now, I have risen to the top level, as the Chief Coordinator of all the 8,231 Sanghams. I would say it is all due to the faith Sir has in me that he has given me the top job.

Another thing is, all of us 231 people in charge of the groups have been trained to work using computers.

Eighteen years ago, if something like IVDP had not come to our area, all the families including ours would have been leading the same kind of poor life. I would not have been doing such a responsible job. Today, none of the 156,990 members has to take loans at high rates of interest from any moneylender and it is all because of what Sir has done. Today, I save Rs.5000 every month.

I dream of IVDP growing even bigger and helping many more women and their families.

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Vasantha, a 'coolie'

I worked as a coolie (a daily wage earner) and my husband, as a driver but life was pitiable at home. Both of us didn't have regular work, so even to give food three times a day to our three children was extremely difficult. That was ten years ago.

And that was when I came to know about the Sangham. There were two Sanghams in my village and when I saw that life of those women had changed dramatically, I also felt like joining them. Those who were members also encouraged me to join one.

So, I joined by giving Rs 50 first. After a year, I got Rs 30,000 as loan from the Sangham with which I did some work in the house and paid the children's school fees. We paid back the loan very fast and again took more loan from the Sangham as there was only 1-2 per cent interest unlike what you have to give to moneylenders.

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In the last ten years, I have taken loan several times and bought whatever was needed for the house. Today, I have a fridge, TV, DVD player, water filter, etc. I didn't have a single sovereign of gold then but today I have 10 sovereigns of gold.

Before joining the Sangham, we also didn't have a single paisa of savings but today, we have a savings of Rs 26,500.

My eldest daughter studies for BA, English, at Namakkal and the other two also go to good schools. We also could dig a canal so that we can have water in our small piece of land.

If not for the Sangham, our life would not have been like this and we also would not have had this much savings.

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Dhanalakshmy works as a full time staff at IVDP

Though I had studied up to the 12th standard, I was not working anywhere before I joined the Sangham. My husband works in a sweet shop. With whatever he earned, we used to have an average life as we didn't have any children at that time. We had a house but it had a thatched roof.

There were five Sanghams in my area but I was not too sure about joining them though many of the members used to tell me to join. What my husband and I feared was, if someone ran away with our money...

After a lot of pressure from others, I decided to start a Sangham. I was scared to take the responsibility of an Animator (leader) and decided to be just a member. 

Initially, we gave only Rs. 50 but after we were given a training at IVDP, we came to know how Sanghams functioned and that nobody could take our money. After that, we started saving Rs.300 every time we met.

Then, I took loan at an interest of 2% and made the house a cement concrete structure.

After knowing the functioning of the Sangham, I wanted more responsibility in running more Sanghams. After all, I am educated. So, I told Sir that I wanted to be part of the staff. After a test, I got the job as a staff member with a salary of Rs.700.

Only Sangham members can take up the job of a staff member at IVDP as our job involves taking care of other Sanghams. My first job was that of a Field Staff. All the Field Staff were given cycles so that we could go to the interiors to oversee how each Sangham worked and also to collect details of their accounts.

After 6 years, I was promoted for the office job. Now, I prepare accounts details, appraise bank loans, prepare and hand over Sangham documents to the bank. I also make visits to the Sanghams if they needed any advise and if there is any problem.

After becoming a member of the Sangham, I bought a scooter, a gas stove, fridge, water filter, etc. for the house. Both of us earn around Rs 20,000 today and we save Rs.10,000 every month. I have only studied up to 12th standard but my daughter is doing her graduation. IVDP gives an incentive of Rs 10,000 every year to all its staff members if their children are studying in college.

We have a savings of Rs 26,000 now. If not for a nerve problem in my leg which made me invalid for one year, we would have had more savings. We had to spend more than a lakh of rupees for my surgery. IVDP also helped me with hospital appointment and also some money during the period. I will not forget it till I die. If I am walking today, it is all because of Sir and IVDP.

Whatever we have today was bought by taking loans from the Sangham. Where else will you get loan for 2 per cent? If not for IVDP, the lives of these one and a half lakh women and their families would have been so different.