CASHPOR Micro Credit

Report
CASHPOR Micro Credit
Social Performance and Impact
Theme 3 - Our product and its delivery are
specially designed to meet the needs of the
poor, in a responsible yet sustainable way.
1
We Provide Meaningful Financial Solutions for
the poor
CASHPOR interest rates have
been reduced to 26% on a
declining basis, thus being in the
Yellow Zone as defined by Prof
Yunus. Plans to further reduce
rates to 24% by 1 April 2012, to
enter the Green Zone.
CASHPOR
strives to
share
economies
of scale as
feasible
Continuous Group Training and
Group Recognition Test form an
important part of CASHPOR lending,
empowering clients with financial
literacy and enabling responsible
credit behavior.
CASHPOR
sanctions
loans as
small as Rs
2000
Financial
Services
for the
Poor
Clients
empowered
with technical
details
through
trainings
CASHPOR has structured its first
loan size to range from Rs 2000
to Rs 8000
Average loan outstanding less
than the per capita income in UP
and Bihar.
Loan
interest
stands at
26%
declining
rate
High staff to borrower ratio
(1 centre manager for 375
clients, FY 2010) ensures that the
staff spend adequate time with
clients on training, meetings and
recovery.
2
A high percentage of our loans are for
productive use
Loan Activity % of Portfolio as of March 2009
7%
5%
3% 3%
54%
28%
Trading
Production
Agriculture
Source: CMC Annual Report 2008-09
Animal Husbandry
Other
Transportation
3
…and we maintain Responsible Interest rates for
clients
•
•
Prof Yunus identified three zones of Interest Rates: Poverty Focused MFIs fall in the
Green and Yellow zones.
CASHPOR has reduced its interest rate to 26%, and entered the “Yellow Zone” as a
poverty focused MFI with an interest rate of no more than 15% over cost of funds; and
plans to get into the “Green Zone” by reducing its interest rate further to 24%.
Green Zone
• Interest to clients equals the cost of Funds at the market rate
plus up to 10%
Yellow Zone
• Interest to clients equals the cost of funds at the market rate
plus 10 to 15%.
Red Zone
• Interest rate higher than the Yellow Zone
Source: Prof. David Gibbons, Chairman- CASHPOR Micro Credit India
4
In addition, CASHPOR is a highly responsible loan
provider ….
CASHPOR performs rigorous Loan Utilization Checks,
made possible by having the required high staff to
customer ratio :
Centre
Manager:
Branch
Manager:
50%
sample
100%
Area
Manager:
20%
sample
Rando
m
Audits
Loans for Productive Purposes
enable “Progress out of Poverty”
5
CASHPOR takes great care to establish clients
can afford loans, and do not over borrow
Productive
Loans
Loan Utilisation
and Progress
out of Poverty
Checks
Reduce chances
of Client Overindebtedness
Promoting
Financial
Literacy through
Trainings for
Clients
Responsible
Interest
Rates
6
Thus, we have built sustainable value around a core
market need
Need for financial Services
Provision of Productive Loans
Loan sizes that enable productive use
and are not a burden on the clients
Affordable interest Rates
Empowered (knowledgeable) client
base and a meaningful service, with
long term sustainability
7

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