Livelihood generation program:
Unabated surge and spread of coronavirus in rural India have affected the activities of SAM. We have adopted a safe mode of preventing the spread of Corona to our workforce and to the people we work with. The pandemic forced many workers out of their urban jobs, and they were compelled to migrate back to their villages. To help such poor migrants, SAM has started a new program of livelihood generation through microcredit financing.
After consulting experts in rural livelihood generation and we have formulated an execution plan, which will follow standard legal practices. The program was started in three blocks of villages in Bhadar, Shahgarh, and Jamo in Amethi district, UP. As a first step, we have appointed a manager who has past experience in running such a program. We have organized women in small groups, called a Joint Liability Group (JLG) – a concept established in India in 2014 by the National Bank of Agriculture and Rural Development (NABARD) – to provide institutional credit to small farmers. It has proven successful in north India.
The following are salient features:
- A JLG will comprise of 4 to 10 migrant members from the same village and similar socio and economic background and common objectives. The members will meet fortnightly where SAM staff will participate.
- SAM will provide loans for 2 members of the JLG group at the initial stage and later more members will be included for loan distribution.
- All members of JLG will approve the loan, its purpose, and its activity.
- Initially, SAM will provide a maximum loan to an individual up to Rs. ten thousand at a 1% interest rate monthly. The individual borrower will repay the loan in 12 monthly installments. If the borrower repays the loan before the due date, the monthly interest will be reduced to 0.50% instead of 1%.
- If an individual is unable to repay the loan, all members of JLG will be responsible to pay the individual loan.
- If any individual repays the loan by the due date without any interruption, she will be eligible for a bigger loan next time.