Developing financial services for the Urban poor

Titus M, (1997) Developing financial services for the Urban poor

• Focuses on providing field notes for capacity building for financial services for the Urban poor
• NGO's were moving towards savings and credit programs as a way of getting access to govt funds and generate funds for income/employment. Sharan is one organisation that tried. Sharan works in both informal (illegal) areas and resettlement (legal) areas. Mainly migrates from lower castes, landless labourers. Sharan focuses on women. Often they are janitors or office cleaners.Some work on construction siets or run small enterprises. Have particular castes or ethnicity in similar area as protection from sickness. Credit was never independant intervention, always along with health, education etc.  Banks were reluctant to lend. Needed to move towards community based institutions sharing savings funds and grants. Essentially goal became to set up such an institution.  Structure involved two teirs - one was self help groups of 15 who would conduct meetings and record transactions. Second tier was federation of these groups.
• Staff training -  key initial role was for staff training - accounts and  book keeping. Also trained in assisting staff with problems such as repayment. Issue was with fluctuating nature of payment.
• Community support and dialogue -  Open discussion about how to manage times such as sickness. Result has been high level of financial discipline with high result.
• Community misgivings - Initial misgivings around womens ability to moniter peers. Informal areas have short engagement wih neighbours. Doubts about Sharan credibility - trust developed via its history of community work. Also some members sidelined - particularly family nepotism. Now no two members of same group were allowed. Also issue of "fronting" where one member borrows on behalf of another. When there are issues - government is main counterbalance and is called on to adudicate.
• Most funds are still for lending rather than capacity building