Social Initiatives

It has been over two decades since microfinance initiatives were introduced in India, but financial inclusion still remains a distant dream and has been a focus of attention in recent times. However, the facts reveal the real and somewhat uncomfortable picture. The increase in the number of Financial Institutions/Banks has not answered the needs of the underserved; and reaching the unbanked population to enable inclusive growth is a serious problem today. Our vision at Suryoday is to enhance the income levels and asset ownership levels of our customers so that their economic and social status gets enhanced on a sustainable basis. We intend to measure this success in the medium and long term by the percentage of customers moving into more formal channels of financial services like banks to utilize both savings and credit facilities.

Inculcating The Savings Habit

We believe that without formal savings, credit can only have a limited positive impact on our customers. Hence we have started a Savings Initiative to inculcate savings habit. This is done through training, showing them a social video documentary drama, visioning exercise and presenting them a Pigmy Savings Box. The use of small documentaries cannot be ruled out in the quest for Financial Inclusion. We have understood the impact of visual based training programme and thus, crafted out a small 20 minute documentary. This documentary emphasizes on financial management at home and offers information on banks, financial management, repayment obligations, avoiding indebtedness, rehabilitation of distressed and not to mention, the need to be economically sustainable.   

Keeping in line with the financial literacy, we have introduced the concept of Financial Diary for Family Money Management; planned with the specific intention of giving our customers the insight into their financial position and the opportunity to organize their financial business. Our customers with their Spouses or Adult Son are encouraged to attend this programme. The reason – we want to include the family of the customer to be part in their decision-making process towards the achievement of family goals. The Financial Diary acts as a basis for decision-making in the economics of our customers’ family as a whole. The recording of Income and Expenses creates an evidence base for economic decision-making and many other activities around the home, which can then be subjected to detailed analysis. The analysis of many such records, built up over a long period of time, according to us will finally throw some light on the dynamics of decision-making in close relationships. The next step – distribution of Pigmy Boxes to our customers’. The concept: Saving of at least Rs. 25 for 30 days = Rs.750 per month; Rs. 750*12 months=Rs.9000 per year; Rs.9000*5 years=Rs.45000; in essence Rs. 25 a day of saving will enable a net saving of Rs. 45000 by end of Year 5.

Banking Correspondent Model

This is a prelude to their becoming CSPs (Customer Service Points) as part of the Branchless Banking process through the Banking Correspondent Model (BC Model). We have partnered with Corporation Bank in the process of Branchless Banking through Banking Correspondents who are catering to our customer segment. Nearly 1500 of our customers have already been enrolled with a bank account. Suryoday has also been involved in educating customers and encouraging them to open operative Savings Bank accounts and get into a habit of savings on a sustainable basis. We have been successful in facilitating the opening of around 10000 operating saving accounts for our customers in Corporation bank, Bank of India, Canara Bank, Central Bank, UCO Bank, Indian Bank & Bank of Maharashtra. The following table depicts the saving pattern of 4964 customers for Jul 2011, picked up randomly:

Saved Upto Rs 300                        : 1200
Saved between Rs 301 – Rs 500     :   350
Saved between Rs 501 – Rs 700     :   260
Saved between Rs 701 – Rs 1000   :   175  
Saved above Rs 1000                    :   100
No Savings                                   : 2879

Loan Disbursement By Cheque

We are now poised to take the next step in Financial Inclusion by making our loan disbursements by cheque – to further ingrain the habit of banking transactions amongst our customers. The first such disbursement was carried out for 100 customers and to mark this important milestone in our efforts at financial inclusion, we had organized a special function in Pune on 20th July 2011. The occasion was graced by Mr. L K Pingle - General Manager & Mr. P R Gaikwad - Deputy General Manager, NABARD (Pune Regional Office) and Dr. K Govind Bhatt - Deputy General Manager, Corporation Bank (Pune Zonal Office). We plan to extend this to all areas of Pune in the coming months.

Assistance To Fire Affected Customers

A special initiative by Suryoday was undertaken for extending assistance to the fire affected customers of one of our branches - Hadapsar in Pune. The sharp increase in the number of natural disasters in recent years has prompted us to start devoting more attention to disaster preparedness activities. These aims to make our customers & communities at large more aware of the risks they face, how to reduce their vulnerability, and how to cope when disaster strikes. 

Next Steps

Apart from microfinance activities, we are constantly looking for new modes and means to enhance the economic sustainability of our customers & community at large. As an organization, the financial literacy moves will enable us develop and maintain a strong relationship with our customers. We are looking at a level of direct business transaction with our customers; mitigating the risk of cash-in-transit for disbursements and collections for the company as well as the customers.

The next focus – Entrepreneur Development. We are working towards the development of 500 customers into entrepreneurs through customized in-house training. These target customers mostly engage in vegetable vending, fast-food selling etc. With optimized financial resources and the need for cost-effective solutions, we envisage carrying out this noble task.

In the end, it will be our endeavour to focus on our objective of creating a win-win situation for the customer, employees and the company. We will consider ourselves successful if a substantial percentage of customers move out of micro credit requirements and move to more formal banking channels because of enhanced income, asset base, credibility and financial literacy.