Bhagyalaxmi Bachat Sangthan - Navsarjan Surat

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The alleviation of poverty is one of Navsarjan’s priorities. Self help is the best form of help. Till date, Navsarjan has facilitated the creation of 148 Self Help Groups (SHG) and few more are in formation.

These self-help groups have now one main activity: to save money and to invest it in their credit society so that when the need arises, they can borrow money at reasonable rates.

Need of a Federation:
In an emergency or in social occasions, like a marriage, a family needs ready cash. When money is not available; the only way out is to get it from a money lender whose exorbitant interest rates may well turn a family into a lifelong slave! To avoid this difficulty the SHGs have set up a credit society: each individual saves money regularly and can thus borrow at reasonable rates it in times of need. Women know very well what is at stake and have made this venture a huge success. As a result, there was need to expand this activity increasing savings and making bigger loans available. To make such loans available a new structure was required.

It is difficult for a small SHG to handle saving and lending facilities. In the past, these SHGs operated through an Ahmedabad based NGO. The advantage was that they took all the responsibility of handling the savings, disbursing loans, and recovering them. The disadvantage was that it cost money: Rs.400 to 600 administrative expenses and, of course, the interest on the loan.
Nothing succeeds like success: from the first of December 2008 till the 30th of June 2013 the SHGs have saved and given to the Credit Society Rs. 13,41,278. On the other hand, by now the Credit Society has given in loans to the SHGs about 52 lacs. The accounts for the year 2008-2011 are given in Appendix 2.

The Federation is not just money. It is about administration, accountability, transparency, and ownership.  Ownership of the Credit Society forces grassroots people to acquire banking skills and managerial know-how.

Structure Of the Federation (Chart???)

The Bhagyalaxmi Bachat Sangathan is made of (148) SHGs belonging to 25 slums where Navsarjan is working. The name of the Credit Society is Bhagyalaxmi Bachat Sangathan.

Composition. The federation is made up of a General Committee and a Governing Body.

The General Committee is made of 97 representatives, from the 97 SHGs (one each –mainly the president). The general committee meets four times a year to review the working of the federation for the past three months and amend the bylaws if needed.
The Governing Body is made up of 27 members. Two are from Navsarjan and 25 are elected by the General Committee in this manner:
The SHGs of one particular slum meet and elect one member to the Governing Body. Since there are 25 slums, the number of members elected is 25.
Functions of the Governing Body
1. It meets every month:
2. It transacts the general business of the federation i.e.:
a. repayment of loans,
b. regularity of monthly deposits etc.,
c. sanction of loans -after careful study of each case.
* Loans can be sanctioned up to a maximum of Rs. 1,50,000/- per SHG at present. This may be increased as the working capital expands.

Loan procedure
The individual applicant submits his/her loan application to his/her respective SHG. The SHG scrutinizes the loan applications received, collates the figures, and makes a collective loan application to the Governing Body of Bhagyalaxmi. This application is scrutinized by the person in charge of that area who can then recommend the case to the Governing Body. The concerned SHG has to pay to Bhagyalaxmi 18 % interest per year on the loan taken. The repayment of the loan has to be done in installments as decided by the Governing Body.
Working Capital
The general committee has decided that each SHG deposits a fixed amount (i.e. Rs.1000/-) every month as savings in Bhagyalaxmi. This monthly saving of each member SHG creates the working capital of Bhagyalaxmi.
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