Strengthening the self help movement _________________________________

Annual Report 2006-07

________________________________________________________________________ Annual Report 06-07

ii

Strengthening the self help movement _________________________________

Annual Report 2006-07

________________________________________________________________________ Annual Report 06-07

iii

______________________________________________________________ APMAS Plot No. 20, Rao and Raju Colony, Road number 2, Banjara Hills, Hyderabad-5300034. Ph: 040-23547926/27, Fax: 040-23547926 Email:info@apmas.org, Websites: www.apmas.org, www.shggateway.in

________________________________________________________________________ Annual Report 06-07

iv

Contents

S. no. Title Page

no. List of Acronyms vi Preface ix APMAS – Six Years at a glance xiii 1 Introduction 1 Highlights of the year 2 2 Capacity building 7 2.1 Trainings 8 2.3 Support to urban program under APUSP – APMAS Partnership 15 2.4 Other activities of CB team 18 3 Quality Assessment 19 3.1 Rating 20 3.2 Documentation 21 3.3 Training and immersion programs 21 3.4 Institutional and program evaluation 23 3.5 Capacity building needs assessments (CBNA) of institutions 24 3.6 Other activities 24 4 Livelihoods promotion 26 4.1 Integration of livelihood promotion with SHG federations 27 4.2 Strengthening of institutions 28 4.3 Sub-sector studies and value chain analysis 29 4.4 Training programs 32 4.5 Networking 33 5 Research and advocacy 35 5.1 Follow up of the studies pending at the end of previous year 36 5.2 New studies 37 5.3 Advocacy 40 5.4 Publication and communication 40 3.5 Resource centre 42

________________________________________________________________________ Annual Report 06-07

v

6 Centralized work 43 6.1 Five years contribution of APMAS, an evaluation by Prof. Seibel 44 6.2 Dr. Samarjit Ray memorial lecture series 44 6.3 Consultative forum 45 6.4 VO-bank linkage workshops 46 6.5 SHG learning centre 48

7 Governance and human resources 49

8 Future direction 51 8.1 Consolidation of gains and addressing the emerging issues in AP 51 8.2 Emerge as a national organization and attend national issues 51 8.3 Facilitation of SHG federations as sustainable institutions 51 8.4 Premonition of sustainable livelihoods 52 8.5 Strategic collaborations and partnerships 52 9 Partnerships 53 APMAS Organogram 55 Audit statements 56

Boxes 1 About APMAS 1 2 Box – 2: APMAS’s new vision, mission and trust areas 4 3 Box – 3: About capacity building unit 7

4 CRP strategy: An effective mechanism social mobilization and institutional building 13

5 About QA Unit 19 6 About Livelihood promotion unit 26 7 About research and advocacy unit 35 8 Extracts from RBI Governor’s speech on Rural Banking 45 9 Extracts from VO-bank linkage workshops report 46

________________________________________________________________________ Annual Report 06-07

vi

Acronyms

ABK : Accounting and Bookkeeping SERP : Society for Elimination of Rural Poverty AGM : Annual General Meeting AKF : Aga Khan Foundation AKRSP : Aga Khan Rural Support Programme APARD : Andhra Pradesh Academy for Rural Development APLLG : Andhra Pradesh Livelihood Learning Group APM : Assistant Project Manager APMSS : Andhra Pradesh Mahila Samatha Society APUSP : Andhra Pradesh Urban Services for the Poor Project APRLP : Andhra Pradesh Rural Livelihood Project ARAVALI : Association for Rural Advancement through Voluntary Action & Local Involvement ASP : Ankuram Sangamam Porum ATMA : Agriculture Training Management Agency AWFP : Annual Work and Financial Plans BCs : Business Correspondents BC : Backward Class BK : Bookkeepers BISWA : Bharat Integrated Social Welfare Agency BMCU : Bulk Milk Cooling Unit CARE : Cooperative for Assistance and Relief Everywhere CASHE : Credit and Saving for Household Enterprise CB : Capacity Building CBNA : Capacity Building Needs Assessment CBO : Community-based Organisation CBMFI : Community Based Micro Finance Institution CC : Community Coordinator CDF : Cooperative Development Foundation CEO : Chief Executive Officer CF : Consultative Forum CIF : Community Investment Fund CIG : Common Interest Group CLDP : Comprehensive Land Development Program CLRCs : Cluster Livelihood Resource Centers CmF : Centre for microFinance COVA : Confederation of Voluntary Associations CRD : Commissionerate Rural Development CReSA : Centre for Rural Reconstruction through Social Action

________________________________________________________________________ Annual Report 06-07

vii

CRI : Critical Rating Index CRP : Community Resource Persons CWS : Centre for World Solidarity DBSU : Dalit Bhahujan Sramik Union DFID : Department for International Development DGRV : Deutscher Genossenschafts- und Raiffeisenverband e. V. DLLG : District Livelihoods Learning Group DLRC : District Livelihood Resource Centre DMIR : Delinquency Management and Interest Rate Setting DPMU : District Project Management Unit DRDA : District Rural Development Agency DSC : Development Support Centre DWMA : District Water Management Agency DWCD : Department of Women and Child Development EC : Executive Committee FA : Financial Analysis FIAC : Farm Inputs Advisory Committee FWWB : Friends of Women’s World Banking GO : Government Organisations GRADES : Governance, Resource, Asset Quality, Design of systems and

implementation, Efficiency and Profitability, Services to SHGs and SHG performance

HR : Human Resource IB : Institutional Building IGA : Income Generation Activities ITC : Information Technology and Communication LH : Livelihoods LEISA : Low External Input for Sustainable Agriculture LIC : Life Insurance Corporation of India IKP : Indira Kranthi Patham (earlier it is called Velugu Project) INAFI : International Network of Alternative Financial Institutions INM : Integrated Nutrition Management IPM : Integrated Pest Management ISLP : Indian School of Livelihood Promotion IRMA : Institute of Rural Management Anand ISMW : Indian School of Microfinance for Women LSO : Livelihood Support Organization MACS : Mutually Aided Cooperative Society MARI : Modern Architects of Rural India MAVIM : Mahila Arthik Vikas Mahamandal MCP : Micro Credit Plan MF : Micro finance MFI : Micro Finance Institution MIS : Management Information System MRP : Mandal Resource Person MS : Mandal Samakhya MYRADA : Mysore Resettlement and Development Agency NABARD : National Bank for Agriculture and Rural Development NGO : Non Government Organisation

________________________________________________________________________ Annual Report 06-07

viii

NPM : Natural Pest Management NRM : Natural Resources Management NREGA : National Rural Employment Guarantee Act NTFP : Non-Timber Forest Produce OB : Office Bearers PAR : Portfolio at Risk PEVAC : Pre Election Voter awareness Campaign PMIS : Participatory Monitoring Information System PoP : Poorest of the Poor PRA : Participatory Rural Appraisal PRADAN : Professional Assistance for Development Action PRPs : Pool of Resource Persons PSS : Pragathi Seva Samithi PTM : Participatory Training Methodologies PWMACS : Payakaraopeta Women's Mutually Aided Co-operative Thrift and Credit Society QA : Quality Assessment QE : Quality Enhancement RAT : Rapid Assessment Tool for SHG federations RBI : Reserve Bank of India RDT : Rural Development Trust SAT : Self Assessment Tool for SHG federations SC : Scheduled Caste SCALE : Sustainable Community based Approaches for Livelihood Enhancement SHG : Self Help Group SHPI : Self-Help Promoting Institution SIDBI : Small Industries Development Bank of India SLBC : State Level Bankers Committee SIT : Social Intermediation Tool for SHG federations TERI : The Energy and Resource Institute TPRO : Town Project Officer TTDC : Training and Technology Development Centre VO : Village Organisation YIP : Young India Project ZP : Zilla Parishad ZS : Zilla Samakya

________________________________________________________________________ Annual Report 06-07

ix

Preface

t gives us immense pleasure to share the 6th Annual Report of APMAS with all of you. The SHG movement in Andhra Pradesh, is not only far ahead of other states

in terms of numbers, has attained maturity and getting stabilized. The state has achieved near universal financial inclusion. By the end of March 2007, the Indira Kranti Patham (IKP) alone covered 86 lakh members in the SHG movement provided to almost all of them the banking services. Including members of SHGs promoted by NGOs, MACS and other and members of SHGs in urban areas, the total membership in SHGs might have reached near one crore. Over three-fourths of bank linked groups, in the state, got repeat linkage, which is an important indicator of sustainability. In repeat linkage, Andhra Pradesh’s accomplishments are even more impressive. Out of total 457,410 repeat linked groups in 2006-07, the state’s share is 262,895 or 57%. The closest state in terms of number of groups having repeat loans is Karnataka, which got about a fifth of AP, i.e. 56,717. AP accounts for 65% of total repeat loan amount of Rs.36 billion. Even at these higher levels, the state is not slowing down either in absolute or relative terms. E.g. the repeat loan amount has been nearly doubling year after year during last few years. E.g. the repeat loan amount, in the state, has increased from Rs.7.32 billion in 2004-05 to Rs.12.84 billion in 2005-06 and to Rs.23.54 billion in 2006-07. The state’s repeat loan amount as percentage of total repeat loan amount has increased from 58% in 2004-05 to 59% in 2005-06 and to 65% in 2006-07. AP’s achievements, in SHG movement, are a matter of pride and fulfillment for APMAS, the pioneer capacity building and quality promoting and managing organization. APMAS, apart from having long and larger partnership with the SERP in implementation of the Indira Kranti Patham (IKP), has been working with almost all major SHPIs and other stakeholders, including banks and NABARD in the state since inception. Apart form totally focusing on the SHG sector, APMAS has been involved in promotion of the other forms of mF to a limited extent. It has been engaged with Sa-Dhan and MFIs like BASIX. APMAS arranged a few direct meetings between the government officials and representatives of MFIs to defuse the crisis and to address the real issues faced by the SHG movement, during the reporting year. The 2006-07 is a watershed year in the evolution of the APMAS. This is the concluding year of the partnership agreement between APMAS and DFID/ CARE. After December 2006, APMAS ceases to get core funding support from DFID/ CARE and has to live on its own. It is a formidable task for an organization which is a ‘not for profit’ organization and working for the promotion of the poor women’s community based organizations. During the reporting year, APMAS not only fully prepared to meet the challenge of its own sustenance but also prepared itself more ambitious agenda. In April 2006, APMAS commissioned an Impact Assessment of the 5-years

I

________________________________________________________________________ Annual Report 06-07

x

work of the organization by Prof. Hans Dieter Seibel, Germany, an International Expert in self-help banking. The evaluation report turned out to be an excellent reading and reference material in the sector. As a result, the report was brought out in a book form for wider dissemination. The Impact Assessment report stated that APMAS has emerged as a credible resource organization in Andhra Pradesh and beyond. The assessment identified professional staff and high quality training programs and other support services as the strengths of the organization. Following Prof. Seibel’s report, APMAS entered into a technical collaboration with INWENT, Germany and DGRV, Germany for developing a ‘sector own control’ (SOC) model for SHG federations. As a part of the collaboration, APMAS facilitated an exposure visit cum policy delegation to Germany with a six member team consisting of board (some of them also senior officials of the Government of Andhra Pradesh) and staff members, to understand the self-help banking system in Germany and also the self-regulation and self-supervision system practiced by German Cooperative Banking system. During the reporting year, APMAS has invested considerable amount of time and resources for developing new business plan for 2006-11 with through participation of all staff members. Major consensus of these consultations is that APMAS has to emerge as national level resource organization. Therefore, the name of the organization is changed from ‘Mahila Abhivruddhi Society, Andhra Pradesh (APMAS)’ to ‘APMAS’, i.e. hear after, the organization would be known by its erstwhile acronym APMAS only. In this exercise, APMAS had revised its ‘vision’, ‘mission’ and operational strategy. The vision of APMAS is “Sustainable Women Self Help Movement in India”. The new trust areas are (a) consolidation of support to the SHG movement in Andhra Pradesh, (b) Expansion to select states, (c) facilitation of SHG federations as sustainable financial institutions, (d) building capacity at all levels to promote sustainable livelihoods, and (e) strategic partnership with the NABARD and the Government of India. Though APMAS achieved significant progress on most of the above five thrust areas, it is in the process of further refining its operational strategy and thrust areas. Though APMAS invested a significant amount of time and resources on the development of the future plans, it has excelled in all its current year’s plans. In fact all four program teams at the head office have increased significantly their agenda. The Capacity Building/ Quality Enhancement (QE) team expanded it activities to urban areas during the reporting year. It has started supporting the APUSP work of promoting SHGs and federations in three towns, viz. Guntakal, Gudivada and L. B. Nagar. The team has streamlined its interaction with the SERP and overcame all teething problems of ‘cluster approach’ agreement entered in 2005-06. The Quality Assessment (QA) team, apart from continuing rating and training programs as per the plan, brought out the second report on ‘Status of SHG Federations in AP: Quality Assessment Second Report’ in a book form. The Research Team, of Research and Advocacy Unit, has conducted two major research studies, apart from completing the studies initiated in 2005-06 during reporting period. The Communication unit of Research and Advocacy Unit, apart from bringing the Mahilasaadhikaritha regularly and helping in regular printing work of the organization, handled reprinting of 18 old documents. The Communication obtained permission from Indian Postal Services to post 4,700 copies of the Mahilasaadhikaritha at subsidized rate every month. The

________________________________________________________________________ Annual Report 06-07

xi

Livelihoods Promotion team developed the two DLRCs at Adilabad and Kadapa, which are being anchored by APMAS, as model resource centers. The team conducted four sub-sector studies, developed three demonstration sites and trained about 600 people from government and non-government organizations. APMAS entered into an agreement with SERP in 2005-06 to develop about 10% total MSs as model MSs and a select number of VOs in each of the partnership MSs were also to be developed as model VOs. APMAS placed field team for providing services to 90 MSs. Initially the relation between APMAS field staff and that of IKP/ Federations was less than cordial. There was an element of suspicion of the part of IKP/ Federation staff about the role of APMAS in their operational areas. With dedicated work and positive attitude, the APMAS field teams won over the confidence of the local IKP/ Federation staff. Now the APMAS staff has been treated as friend, philosopher and guide by the local staff. As there is better understanding between the field staff of APMAS and IKP/ Federations, the progress in preparing the model/ resource federation has progressed at an accelerated pace. The two DLRCs have started ‘news letters’ containing very useful information on livelihoods for the benefit of members of the federations and farmers. Apart from working in their respective teams, the staff has worked admirably on many cross cutting activities. Because of dedicated work of the staff, APMAS completed many important activities and initiated new activities during the reporting period. These include:

1. APMAS started institutional, program and project evaluation work. During the reporting year it has completed four evaluation works including an international evaluation work in Bangladesh.

2. Initiated Smarajit Ray memorial lecture series. The first memorial lecture was delivered by Dr. Y. Venugopal Reddy, Governor, Reserve Bank of India on Rural Banking.

3. Took lead role in financial inclusion and introduction of smart card. 4. Took a proactive role for federation-bank linkage program. Organized six

district level workshops on ‘Village Organization-bank linkage’. 5. Set up a SHG learning centre with all modern learning facilities in the

suburban of Hyderabad city. 6. Apart from facilitating the ‘impact assessment by Prof. Seibel, organized two

lectures on ‘Self-help banking’ and ‘evolution of cooperative movement in India and Europe’ by Prof. Seibel.

7. Organized one day national level consultation of SHPAs and resource organization.

8. Launched SHG gateway (www.shggateway.in). It is being developed as one stop resource site for SHG movement in the country. The existing website (www.apmas.org) was redesigned and improved significantly.

There is thus exciting and challenging work in progress, as well as upcoming on the canvas of APMAS with respect to institution building processes in Microfinance and Livelihoods.

________________________________________________________________________ Annual Report 06-07

xii

All these efforts and accomplishments would not have been possible without the support and collaboration of our donors, partners and a highly committed APMAS team. We wish to record our gratitude to the Government of Andhra Pradesh and our donors – DFID/CARE, Aga Khan Foundation (AKF), the Ford Foundation and InWEnt, Germany - for extending support to pursue our vision and also work in collaboration on common themes. We also wish to record our gratitude to all our collaborative partners and well wishers. Finally we are grateful to members of SHGs India, who are the reason for our existence; source of our learning and inspiration to our work. We are rededicating ourselves for the cause of Self-help movement in the country. C. S. Reddy Dr. P. Kotaiah Chief Executive Officer Chairperson

________________________________________________________________________ Annual Report 06-07

xiii

APMAS – SIX YEARS AT A GLANCE

Registered as a non-governmental public society on 14th June 2001 Governing Board: 20 member board representing Government, Financial

institutions, NGOs and SHG federations ,with one elected chairman and one elected vice chairman among.

Main arena of functioning: Andhra Pradesh state, India Districts actively covered: 11 districts in Andhra Pradesh : Ananthapur,

Kurnool, Kadapa, Chittoor, Guntur, Krishna, West Godavari, Ranga Reddy , Adilabad, Nizamabad and Mahabubnagar

Head Quarters: Hyderabad, the state capital of Andhra Pradesh Regional centers: Anantapur, Chittoor, Vijayawada and Nizamabad Expanding to other states: Assam, Gujarat, Bihar, Uttar Pradesh, Madhya

Pradesh, Maharashtra, Orissa, Rajasthan and West Bengal Main Partner organizations: SERP (GOAP), APUSP, NABARD, Ford

Foundation, InWEnt Germany, APRLP/CRD, Aga Khan Foundation DLRCs Being supported: DLRC-Adilabad and DLRC-Kadapa Main areas of operation: Quality Assessment, Capacity Building, Research &

Advocacy, Livelihood Promotion and Publications and Communication Tools developed :

- CoopRATE: Assessment tool for cooperative model federations - SAT: Self Assessment Tool for SHG federations for self rating - SIT: Social Intermediation Tool for SHG federations - RAT: Rapid Assessment Tool for SHG federations - GRADE: Tool rating of SHG federations

Main clients: SHG federations and NGOs, Governments and Banks No. of persons trained so far: Directly: 44,159+ Indirectly: 4,50,000+ No. of SHG federations rated so far: 419 Research Studies conducted so far: 39 studies on various subjects relating to

SHGs and micro finance Publications brought out so far: More than 35 publications in English and

Telugu as well as 5 CDs and VCDs Intra-organizational forums: Core Team, Advisory Committee, Gender

Committee, Major funding agencies: DFID through CARE, Aga Khan foundation, Ford

Foundation Other features to note:

- Launched SHG Gate way web site - Established SHG learning Center

________________________________________________________________________ Annual Report 06-07

1

1. INTRODUCTION

PMAS completed another exiting year in the service of SHG movement in India in general and in Andhra Pradesh in particular. The year 2006-07 is a transition year

for APMAS. During the year APMAS has moved from predominantly AP focus to all India focus. It has shifted from assured funding to self generation of resources and from a few donors and partners to multiple donors and partners.

Box – 1: About APMAS APMAS came into existence because of the felt need for an institution for capacity building of both primary and secondary stakeholders and for quality promotion and management in SHGs. APMAS is the result of one and half years research and consultation process among government organizations, non-government organizations, donors and concern individuals. Registered in 2001 as a non-governmental public society, APMAS quickly established itself as a unique, credible and pioneering support organization in the field of SHG promotion. Though it got assured funding to meet all its organizational and program funding for the first five years from DFID/ CARE, APMAS thrived to generate internal funds through ‘fee for services’ strategy. In this process, APMAS emerged as a new generation NGO aiming to be self reliant. Another uniqueness of APMAS is that it develops its action plans on rigorous research and subjects its output and impact to the scrutiny of rigorous research and evaluations. APMAS is a professionally functioning and managed organization with devoted governing board and dedicated staff. The Board of APMAS consists of 21 representatives from government, NGOs, financial institutions and banks, academic institutions, SHG federations and eminent individuals. It has adopted, and is adhering to international standard of internal systems. The internal systems include a comprehensive human resources (HR) policy and proactive staff training, development and involvement programs. APMAS has very high quality human resources comparable to the best in the sector. APMAS strongly believes in collaborations and partnership in achieving the vision and mission. The work of APMAS is organized in four broad themes, viz. (1) Capacity Building, (2) Quality Assessment, (3) Research and Advocacy and (4) Livelihood Promotion. Under capacity building theme, APMAS designed training programs on 10 different subjects and provided training directly to about 45,000, including about 3,000 staff members of governmental and banking institutions. The total number of trainees reached indirectly

A

________________________________________________________________________ Annual Report 06-07

2

through institutions and facilitators trained by APMAS is about 4,50,000. Under Quality Assessment theme, APMAS designed five rating tools of international standard and rated over 400 SHG federations directly and over 600 CBOs through its affiliates and franchise institutions/ individuals. Under Research Program, APMAS conducted 39 studies, which are pioneers in the sector. Under Advocacy, APMAS staff regularly attends national and international conferences and share their learning and experiences. The staff is being invited regularly to the policy and development forums like state level bankers conference (SLBC), district level bankers conference (DLBC), meetings of Sa-Dhan, Microfinance India, etc. They also participate in review and technical meetings organized by organizations like SERP, NABARD, RBI, etc. Under Livelihood Promotion, APMAS is working on integration of livelihood promotion with the agenda of SHG federations. The Unit is working on this integration with SHG federations in five clusters (a sub-district unit) in AP. The second major activity of the Unit is to develop institutions to promote ‘natural resources’ based livelihoods especially agriculture and livestock, which form the basis of livelihoods to about three-fourths of people in rural India. Under this activity the Unit is anchoring two District Livelihoods Resource Centers (DLRCs) in Adilabad and Kadapa districts in collaboration with the District Water Management Agency (DWMA), the AP Academy of Rural Development (APARD), and the Department of Rural Development (DRD). The two DLRCs have been developed as model DLRCs in the state. The third major activity of the Unit is promotion of best practices in livelihoods. Under this activity, the Unit promoted AP Livelihood Learning Group (APLLG), with major organizations in the state, which are working on livelihood promotion. The group meets periodically share their experiences and discuss at length on one separate theme in each meeting. Another strategy adopted by the Unit in promotion of best practices is ‘documentation and dissemination’. Though APMAS committed for the cause of the Self-help movement in India, the major focus in the initial years was in Andhra Pradesh, the hub of the Self-help microfinance revolution in India. APMAS placed its staff in the field to develop model federations in 10% of geographical area of the state. The field teams are extending their on the job support services in 11 districts of out of total 23 districts in the state. The operational districts include Adilabad, Nizamabad, Anantapur, Kurnool, Chittoor, Kadapa, Ranga Reddy, Mahabubnagar, Krishna, Guntur and West Godavari. At the same it provided its capacity building, quality assessment and research services to other states also to a limited extent. So far APMAS has been involved in Rajasthan, Karnataka, Orissa, Uttar Pradesh, Maharasthra, Gujarat and Madhya Pradesh. The area of influence is growing year after year. Highlights of the year Like SHGs and bank linkages, APMAS is also growing at an exponential pace. The four functional units at the head office, the four regional teams and two DLRCs have not only accomplished their planned activities but also covered several additional activities during the reporting year. Major accomplishments of the year are:

________________________________________________________________________ Annual Report 06-07

3

1. The Capacity Building unit organized national level training programs in federation promotion and extended support to the IKP in developing model federations under the cluster approach.

2. The Unit also extended on the job services to APUSP in three towns, viz. Gudivada, Guntakul and L. B. Nagar in promotion of quality of SHGs and formation of federations at slum and town level.

3. The field teams and support members attended about 6,000 meetings of SHGs, VOS, MS, and ZS, trained 148 CRPs, 233 book keepers, organized 1,735 trainings. The field teams worked with devotion for successful implementation of new initiatives by the SERP, i.e. CRP strategy, Total Financial Inclusion and Weekly meetings.

4. The Quality Assessment team completed 97 quality assessments of federations during the reporting year. The Unit has brought out the report on Status of SHG Federations in Andhra Pradesh: the Quality Assessment 2nd Report 2006. The Unit also initiated preparation of a manual on execution of the rating tool ‘GRADES’. The Unit members took active role in many inter-team activities like institutional/ project/ program evaluations, organization VO-bank linkage consultations, meetings of consultative forums, etc.

5. The QA team also organized national, state, regional and institutional level training in its subject matters of accounting, bookkeeping and financial analysis and delinquency management and interest rate setting.

6. The Research team of R & A Unit, initiated two new major research studies, viz. SHG Bank Linkage Recurring Study and Impact and Implications of Large-size Loans to SHGs and one small study on household indebtedness during the reporting year. The team also completed three research studies initiated in the previous year.

7. The research study ‘’voice of the people’, formed basis for a series of meetings organized by APMAS to resolve the MFI crises in the state. APMAS also participated in policy level consultations on the same subject organized by others like RBI.

8. The Advocacy wing of R & A Unit handled reprinting of 18 old research reports, technical reports, manuals, guidelines, etc. The team also involved in voter awareness campaign in a network of major Civil Society Organizations coordinated by PRIA, New Delhi.

9. The Livelihood Promotion Unit developed the DLRC in Adilabad and Kadapa as model DLRCs during the year. The Unit initiated four sub-sector studies, viz. Redgram, Small ruminants, FIAC and Livestock and completed first three studies during the reporting period.

10. The two DLRC started news letters for the benefit of farmers and SHG members in their respective districts.

Apart from the team specific activities, APMAS as a whole accomplished exiting tasks. Important tasks that APMAS as a whole accomplished are:

________________________________________________________________________ Annual Report 06-07

4

1. Initiated institutional, program and project evaluation work. During the reporting year it has completed four evaluation works including an international evaluation work in Bangladesh.

2. Initiated S. Ray memorial lecture series. The first memorial lecture was delivered by Dr. Y. Venugopal Reddy, Governor, Reserve Bank of India on Rural Banking.

3. Took lead role in financial inclusion and introduction of smart card. 4. Took a proactive role for federation-bank linkage program. Organized six district

level workshops on ‘VO-bank linkage’. 5. Organized three consultative form (CF) meetings. 6. Set up a SHG learning centre with all modern learning facilities in the suburban

of Hyderabad city. 7. Apart from facilitating the ‘impact assessment by Prof. Seibel, organized two

lectures on ‘Self-help banking’ and ‘evolution of cooperative movement in India and Europe’ by Prof. Seibel.

8. Entered into technical and financial collaborations with DGRV, Germany and INWENT, Germany.

9. Organized a study and policy delegation to Germany. 10. Organized one day national level consultation of SHPAs and resource

organization. 11. Launched SHG gateway (www.shggateway.in). It is being developed as one stop

resource site for SHG movement in the country. The existing website (www.apmas.org) was redesigned and improved significantly.

12. Two in-house training programs in executive development program (EDP) have been organized. Almost all staff members participated in the training. One in-house training on MACS act has been organized for the benefit of staff, who are involved field support.

13. EDP training is also arranged for 230 staff members of federations in APMAS operational areas.

14. Upgraded computers, communications equipments and transport infrastructure. In a nutshell APMAS is fully geared for new and bigger challenges of strengthening of SHG in India. All these exiting accomplished have been described in different sections below. Before turning to the detailed description of above accomplishment a few words about organizational level changes corresponding to transition from AP to India, from few donors/ partners to multiple partners/ donors and from donor dependence to financial self reliance. During the reporting year APMAS

Box – 2: APMAS new vision, mission and thrust areas

Vision A sustainable women self-help movement in India

________________________________________________________________________ Annual Report 06-07

5

Devoted a lot of time and resources for the development of new organizational vision, mission and thrust areas. This was a long process involving all staff members. Dr. Godbole, an Organizational Development (OD) expert facilitated this process in a couple of meetings. The staff also deliberated internally under the guidance of the CEO, who is himself a renowned OD expert. During the long consultations, APMAS has revisited, the organizational vision, mission, core values, approach and thrust areas. The new vision, mission, thrust areas, etc are given at box – 2. Major consensus of these consultations was that APMAS has to emerge as national level resource organization. Therefore, the name of the organization is changed from ‘Mahila Abhivruddhi Society, Andhra Pradesh (APMAS)’ to ‘APMAS’, i.e. henceforth, the organization would be known by its erstwhile acronym ‘APMAS’ only. In these consultation a new organizational strategy has been developed with five thrust areas, viz. (a) consolidation of support to the SHG movement in AP, (b) expansion to select new states, (c) facilitation of SHG federations as sustainable institutions, (d) promotion of sustainable livelihoods, and (e) developing strategic partnership NABARD and GOI.

Mission

• To enable SHPIs to provide quality services to strong and vibrant SHGs and SHG Federations.

• APMAS believes in self-reliance of community-based organizations engaged in microfinance and livelihood promotion, strives for excellence in whatever it does and promotes the empowerment of women.

• APMAS will emerge as a national-level support institution by influencing appropriate policy and effective supervision of federations

Core Values

• Concern for quality • Continuous learning • Promoting self-reliance • Integrity and honesty • Openness

Approach

• Collaboration with Government and Non Government Agencies in ongoing projects

• Promote Demonstration units on Pilot basis

• Document and Disseminate Best practices in the areas of institution building, micro Finance and Livelihood promotion.

Thrust areas

• Consolidation of support to the SHG movement in Andhra Pradesh,

• Expansion to select states, • Facilitation of SHG federations as

sustainable financial institutions, • Building capacity at all levels to

promote sustainable livelihoods, and • Strategic partnership with the NABARD

and the Government of India.

________________________________________________________________________ Annual Report 06-07

6

In the current year itself, APMAS achieved considerable progress in its march towards the new vision. E.g. it has obtained in principle support to expand to new states from Ford Foundation, AKF, SDTT and NABARD. Achieved considerable progress in developing a strategic partnership with NABARD. Though, a significant progress is achieved in new strategic areas, they are being further revised and fine tuned.

Dr. Y. Vengopala Reddy Governor, RBI delivering the first Smarajit Ray memorial lecture on Rural Banking: Review and Perspectives on 19th November 2006

________________________________________________________________________ Annual Report 06-07

7

2. CAPACITY BUILDING

apacity Building through training is the most important function of APMAS. These regular courses run by APMAS are highly regarded by stakeholders at various

levels within the sector. Such courses and immersion programs are customized for the clients based on their specific needs. Thus each course varies according to the client’s specific projects under implementation, geographical situation and other variable factors affecting operations. Along with these generic immersion programs on SHG federations, training on Institutions for Livelihood Promotion and Processes in Implementing Livelihood Programs are run once a quarter. Though all functional groups conduct training programs regularly along with their regular activities, a separate Unit has been created within APMAS to meet the capacity building needs of the sector. The team has two major functions (a) trainings programs from national level to village level and (b) facilitate development of resource clusters. During the reporting year, the team started on the job support in promotion of quality of SHG and their federations in three towns, viz. Gudiwada, Guntakul and L B Nagar in AP.

C

Box – 3: About Capacity Building Unit Enhancing the quality and sustainability through capacity building of the SHGs and their federations is the key objective of APMAS. Though all functional groups conduct training programs regularly along with their regular activities, APMAS set up an exclusive capacity building unit known as ‘Quality Enhancement nit’. In 2002 APMAS started collaboration with DRDA in three districts viz. Adilabad, Kadapa and Prakasham. It helped DRDAs in developing in capacity building strategy. Trained the DRDA staff, help them in introduction of animator system. Training inputs were provided to NGOs in these three districts. When VELUGU/ IKP was extended to the whole state, APMAS, helped the IKP in recruiting and inducting of the staff. In 2003, APMAS entered into new districts and brought out many technical documents, manuals and etc. In 2004 APMAS started capacity building support to the Andhra Pradesh Urban Support Program (APUSP). In 2005 APMAS entered into a for years agreement to provide on the job support. As per the agreement has to develop 19 clusters consists of 95 mandals (about 50,000 SHG) as resource clusters in 11 districts. The agreement also covers development of 11 TTDCs and state level support of capacity building of area coordinators (ACs). To impact the quality of SHGs and federations, the staff of Self Help Promoting Agencies (SHPAs) are trained, exposed to successful promotional process and provided handholding support. The range of trainings given by the CB team includes:

________________________________________________________________________ Annual Report 06-07

8

2.1. Trainings Different Teams of APMAS conduct training programs for national (known as Flagship programs) level, state level, regional level and institution level. The trainings are broadly two categories, regular and immersion. During the reporting period the CB team organized two national level training programs. One is on promotion of SHG federations and another on participatory training methods (PTM). 2.1.1 National level training on SHG Federation promotion This program was conducted during 12-17, June 2006. Participants from various reputed agencies like PRADAN, BASIX, AKRSP and OXFAM attended the six day program. Themes covered included the need for the establishment of federations, the advantages and limitations of federations, various models of federation structure and administration and management. The participants also visited the SHG federations to understand the functioning of the federations and shared their impressions on the functioning of federations in the class room. For the participants this program provided greater clarity with respect to the role of SHPAs in promoting federations.

Training of trainers in participatory training methodology. Step by step approach in promoting sustainable SHGs. Promotion of SHG federations Training to the board of directors and office bearers of SHG federations /

MACS Visioning at SHG federation level. Legal compliance – SHG federations registered as MACS

So far the Team directly trained 31,177, including 2,686 staff members of government institutions. The team’s training input have reached to over 2,93,560 members indirectly through institutions and facilitators trained directly. Apart from class room training, the team provides problem solving and on-the job support to the trainees. In addition to conducting high quality trainings, the CB team participates in review and planning meetings. Every year the team members participate in thousands of SHG, VOs, MSs and ZS and guide their proceedings and help them in developing their vision, strategies and business plans .

National Training on Participatory Training Methodologies in the context of SHGs-9-14, October 2006

________________________________________________________________________ Annual Report 06-07

9

2.1.2. National Level Training of Trainers (ToT) on Participatory Training Methodologies [PTM] in the context of SHGs The Unit conducted a national level ToT on PTM for the benefit of staff who work with SHGs and SHG federations during October 9 – 14, 2006. This course was a six day residential program designed to provide the participants with an overview of the relevant methodologies useful in working with SHGs thereby helping them to understand and internalize important concepts. The training was highly participatory and interactive in nature. Learning was conducted entirely through practice session guided by skilled resource personnel. Each participant had the opportunity to analyze and work on their strengths and weaknesses. Participants felt that their capacity to train federation staff and SHG members in the field was enhanced and upgraded subsequent to this course. Participants came from various institutions including PRADAN, BASIX, BISWA, MYRADA, World Vision and Byrraju foundation. 2.2. Field operations In 2005, SERP decided to decentralize project implementation responsibilities by releasing allocated funds and transferring implementation mandates directly to MSs. Since the strategy of developing demonstration sites/model mandals has proven very effective in hastening social mobilization and institution development processes in large-scale projects, SERP has decided to develop resource clusters (lead clusters in achieving minimum standards) in all districts either through direct facilitation or with the support of civil society organizations. As a part of this strategy SERP has a four year (2005-09) agreement with APMAS to develop resource clusters by providing nurturing support to 19 clusters in 11 districts of Adilabad, Mehabubnagar, Anatapur, Chittoor, Ranga Reddy, Nizamabad, Kurnool, Cuddapah, Krishna, Guntur and West Godivari. Map – 1 shows the APMAS field operational districts in the state. As per the agreement APMAS has to help in strengthening of the 11 TTDCs in 11 operational districts and provide capacity building input to the ACs at the state level.

________________________________________________________________________ Annual Report 06-07

10

Map – 1: APMAS field operational districts in Andhra Pradesh Following the four years (2005-09) agreement with the SERP for supporting cluster approach, APMAS placed 34 staff members and full-time affiliates in the field along with a pool of resource persons, whose services are being accessed as per need for providing on-the-job support to the staff of the IKP/ Federations. The field teams were placed in 11 districts under five regional offices in Anantapur, Chittoor, Nizamabad, Vijiyawada and Ranga Reddy. The Ranga Reddy regional office operates from APMAS head office in Hyderabad. As a part of this agreement, the field teams attend the following four activities:

1. Provide and arrange training to the staff of IKP/ federations and members of executive and sub-committees and office bearers of SHGs/ federations.

2. Participate in regular meetings of almost all ZS and MS meetings and select meetings of VOs and SHGs and also review and planning meetings of IKP.

3. Development of model VOs and MS 4. Help the IKP/ federations in grounding of new ideas and experiments.

The field teams’ accomplishments under above four broad themes are described below. 2.2.1. Trainings provided and arranged During the reporting year, APMAS’s CB team in general and the field teams in particular organized 465 training programs and trained 15,314 members (Table – 1). The training subjects include SHG/ federation related issues like organizing meetings, role and

________________________________________________________________________ Annual Report 06-07

11

responsibilities of executive members and office bears, etc and general awareness issues like APREGS, HIV/ AIDS, ASHA, etc. APMAS staff in collaboration with SERP and the respective district level IKP staff have imparted training to the ZS members based on the CB needs assessment done at ZS level. Apart from these trainings for members of SHGs/ federations, APMAS organized training in EDP for 230 IKP/ federations staff in 11 APMAS operational districts. Because of the training and other positive measures, the field staff gained the confidence of lower level IKP/ federations’ staff confidence. In the first year the IKP/ federations’ staff used to view the APMAS’s field staff as spies of PDs and other higher officials. The major achievement of this year is that APMAS field staff has been accepted as friends, philosophers and guides by the IKP/ federation staff. Table – 2.1: Number and type of trainings conducted and total participants: 2006-

07 S. No. Concepts Batches Participants1 Self Help Group 124 3,302 2 Village Organization 162 4,039 3 Mandal Samakya 72 1,707 4 Zilla Samakya 45 1,625 5 Others (PTM, APREGS, HIV / AIDS, ASHA, etc) 62 4,641

Total 465 15,314 2.2.2. Participation in review and planning meetings As per agreement between APMAS and SERP, APMAS staff has to attended all the ZS and MS meetings and visit selected VOs and SHGs. During the reporting year, the field staff of five regions participated in 103 ZS meetings, 1,093 MS meetings, 2,113 VO meetings and 2,181 SHG meetings (Table – 2). Apart from these CBO meetings, the field staff has participated in almost all staff level meetings organized by the PDs, AC and APM for planning and review.

Table – 2.2: Number and category of meetings attended by the APMAS staff

S. No.

Region ZS MS VO SHG Total

1 Ananthapur 23 239 582 578 1,422 2 Chittoor 16 261 343 460 1,080 3 Nizamabad 22 193 269 242 726 4 Ranga Reddy 29 257 575 678 1,539 5 Vijayawada 13 143 344 223 723

Total : 103 1,093 2,113 2,181 5,490

________________________________________________________________________ Annual Report 06-07

12

By participating in a number of CBO and staff planning and review meetings, APMAS has:

1. Supported the IKP/ DRDA in development of respective district level institution building and microfinance plans by providing inputs in the district level planning meetings conducted by PDs, Area Coordinators ACs), APMs in APMAS operational areas.

2. Contributed in developing annual work and financial plans (AWFP) formats at IKP level

3. Helped ZS members to understand in greater depth the role of ZS in building lower level institutions.

4. Contributed in preparation of AWF plans in all ZS and MS on the basis of ‘the ground’ realities and the institutions’ own aspirations.

APMAS staff presence in federations/ SHGs meetings resulted in systematic monthly meetings and improved capacity of the federations’ OB and EC members in organizing productive meetings. Federation members gained skill in reviewing the performance of the lower level institutions, the performance of the staff and development of appropriate action plans for subsequent periods. APMAS staff provides feedback to the federations about the issues in the lower level institutions (MSs, VOs and SHGs) and supported them in developing appropriate solutions to improve the performance of the MSs, VOs and SHGs. 2.2.3. Promoting models for demonstration: One of the major objectives of APMAS – SERP partnership is to develop model institutions, so that others can emulate them. At least one MS and 4 to 6 VOs in each of the cluster of APMAS operational areas are being developed as model institutions. Intensive support is given to all designated model MS and VOs. APMAS not only encouraged the IKP/ federations’ staff for night stays in the model village, its own staff also following night stay norm in all model institutions/ villages. AWFPs and MCPs are prepared and implemented with utmost care. Apart from focusing on intuitional building, economic development of members given paramount importance. Livelihood promotion is being integrated with agenda of federations in select model institutions. 2.2.4. Grounding of new ideas/ schemes Normally in government departments, guidelines, instructions, etc flow from top to bottom. Even in autonomous organizations like SERP, which has also decentralized significantly, also this practice is in vogue albeit in a limited scale. Further, the field staff of IKP/ federations, who are so accustomed to guidance from the top, do not try to understand the local aspirations and emerging new realities. Further, the CBOs and their staff are less informed about new opportunities, which are unleashing from time to time. The role of APMAS become critical in grounding new schemes/ guidelines that are

________________________________________________________________________ Annual Report 06-07

13

coming from the top, articulating local aspirations and developing linkages with new opportunities and getting convergence of different departments. During the reporting year, the IKP introduced three new concepts viz. community resource persons (CRP) system, weekly meetings and total financial inclusion (TFI). While the first one aimed at sustainability of CBO, the second one is meant for strengthening the internal systems of SHGs and third one intended to increase members access to larger bank loans. APMAS helped the field staff of IKP/ federations in implementing these activities. It has prepared manuals for implementation of the same, prepared training modules and train the staff and EC members and OBs of SHGs/ federations. APMAS also helped the federations in accessing the schemes like APREGS, toiler made insurance schemes, etc. It also helped in developing convergence with different line departments like health, education, etc. 2.2.4.1. Community resource persons (CRPs) Among different ideas/ schemes, proposed by the SERP during 2006-07, the CRP strategy is one of the most effective and useful ideas (Box – 4).

Box – 4: CRP strategy: An effective mechanism social mobilization and institutions building

In CRP strategy, the internal or local persons are being used as resources persons in place of external resource persons/ consultants for mobilizing, motivating, informing and organizing the members and SHGs and VOs. . It has a number of advantages such as:

Community to community cross-learning. It is a cost effective strategy. As the process itself generate social capital, it could be considered as

effective mechanism to generate and utilize the social capital. Both member and the staff to internalize the best practices and implement

them. The active members of matured SHGs, who have 5 to 10 years of experience as members in the SHGs and have accessed multiple doses of loans and improved their livelihood base and standard of living, would be used as the CRPs. Additional qualifications for CRPs are that they should have been recognized as role models in theirs SHGs, VOs and MS and their SHGs and VOs should have been adopting good management practices and addressing social issues. In addition the potential candidates are expected to have good communication and organizational skills. They are expected to have hands on experience in group management, functions and process SHGs/ VO, bank linkage and good knowledge and clarity about book keeping, functions of support persons, etc. They are expected to have ability to use folklore, documentation skills and handling of training material. If they do not have these skills, they would be trained in these skills along the subject matter.

________________________________________________________________________ Annual Report 06-07

14

A four member CRP team would camp about 15 days in a village. During the stay the team would:

Conduct a diagnostic study of the status of SHGs and poverty issues. Prepare a status report to have a baseline. Organize new groups with left over poor and poorest of the poor Conduct group level training to each SHG for 3 days. In the night facilitate group meetings, in which group management norms and

financial management norms would be developed. Facilitate SHG members to identify book-keeps. Give intensive training to book keepers for 5 days Get all the group records updated and bring actual financial status to their

notice Facilitate leadership rotation in the groups. Identify two good groups give intensive training on seven step NCP process

and get the plans prepared. Give training to all SHGs how to organize a VO around members’ common

social economic interest. Facilitate VO GB and EC meetings to develop clarity on VO meeting process Facilitate VO to identify social audit committee give training to the members Identify community activist on VO book keeping and preparation of VO MIS

Expected outcomes of CRP Strategy are:

All the left over poor and POP would be organized into SHGs Revival of dormant and defunct groups All SHGs switching over to regular meetings, savings and internal earning Trained book keepers, placed and books updated. Community activist emerged with good training skills and facilitating preparation

of MCPs VOs acquired self management skills conducting monthly EC meetings adopting

clear agenda and reviewing SHG and VO staff Trained community activist available and provide facilitation support to SHGs and

VOs Trained VO functional sub committees available providing support to the VOs on

addressing social issues, conducting social audit and SHG bank linkage VO establishes VO office VO adopting social agenda in their meetings and addressing social meetings VO introducing good book keeping and following best practices in financial

management like writing records and cheques in the meetings. VO emerging self managed by paying staff honorarium from their own monthly

incomes. To implement the CRP strategy, APMAS field teams have identified a number of potential active SHG members, community activists (CAs) and book-keepers (BK) and

________________________________________________________________________ Annual Report 06-07

15

trained them. Based on the performance of the trained members, 25 CRP teams (each team comprising 4 members) were developed. APMAS has ensured the utilization of CRP teams’ services in all the model mandals which were identified in each of the APMAS supported clusters. There were considerable positive changes such as: revival of defunct groups, better performance of SHGs (based on internal rating tools) and more accurate book keeping. Under CRP strategy, APMAS field teams in all five regions have prepared 25 CRP teams, covered 69 VOs under the strategy during the reporting period. CRPs have supported 1, 229 existing groups, formed 128 new groups with 1,774 left over poor and POP and formed 26 differently able persons (DAP) groups. Additional 371 book-keepers were identified, trained and placed. Because of CRPs, 789 SHGs switched over to weekly meetings, 787 groups started paying honorarium to their book-keepers, books 772 groups got updated and 47 VOs opened their own offices. CRPs have trained 889 SHG in group concepts, 260 SHGs in MCP and 1,551 EC members of VOs in VO concepts and meeting process. The CRPs also trained 216 sub-committee members and also surveyed 621 youth data. 2.2.4.2. Participatory monitoring and information system (PMIS) As per the discussions between SERP and APMAS on partnership, APMAS has adopted the PMIS in the Mandal Samakyas where all the Mandal Samakyas review their performance periodically to assess their progress. APMAS builds the capacities of the federations to assess their progress against the indicators mentioned in the PMIS. This helped all the stakeholders (SERP, APMAS, Mandal Federations, DRDA) to understand the status of SHGs and Federations and design and develop required interventions and systems where necessary. The data has been shared with SERP.

2.3. Support to Urban Program under APUSP – APMAS Partnership APMAS during the past two years has provided CB services to Andhra Pradesh Urban Services Project (APUSP) on the basis of specific requests. On request from APUSP, situational analysis of self-help groups of women in three towns, viz. Qutubullapur, Tenali and Proddattur to identify the CB needs of SHGs was undertaken. The assessment has focused on the existing gaps in ongoing operations and also to evolve a sustainable institutional model for the networking of SHGs in the APUSP towns. This year APMAS and APUSP entered into a partnership to support the institutions in enhancing the quality of the SHGs and promotion of SHG federations in three selected towns one from each Region viz. Telangana, Costal and Rayalaseema. APMAS has agreed to provide required support to APUSP in three towns, viz. LB Nagar, Gudiwada and Guntakal. Following the agreement APMAS has recruited 9 members as staff and placed in all three towns to support the local APUSP staff in strengthening the SHGs and formation of SHG federations. One person from head office is deputed as in-charge

________________________________________________________________________ Annual Report 06-07

16

for the program. Other team members from APMAS head office are also providing required support to the town level staff and the program whenever required. 2.3.1. Development of town level action plans Based up on the discussions with the Municipal Commissioners, Chairpersons, TPROs, COs, local bankers and the information gathered through focus group discussions with the SHGs, the teams have developed broad action plan for each of the three towns. These action plans were reviewed periodically (quarterly) and modified according to the context and progress. 2.3.2. Strengthening SHGs To understand the quality of SHGs and to assess the CB needs, a situational analysis was conducted in three towns. The situation analysis indicates the quality of SHGs in the three towns was very poor. The three towns together have 1,171 SHGs at the time of the agreement. But only about 20% are of A grade quality, about 40% groups are B grade quality and remaining are of C grade. Even the bank linkage level was poor. A series of measures were initiated to strengthen the SHGs in the 3 towns. The measures include intensive visits to SHGs, working on the problems areas, conducting of member education program, identification, training and placement of book-keepers known as Nagaradeepikas and book-keepers and use of CRP strategy. Some the measures are elaborated below.

APMAS field teams in three towns made 3,701 visits to SHGs in their operational areas. The teams also have participated 829 SHG meetings during 2006-07. The teams spent most of their time in areas where SHGs have struggled to establish themselves. Motivation and assistance was provided through the teams’ involvement in problem solving and revival of defunct groups. A total of 282 SHGs were revived through the above process in 3 towns and 393 new SHGs were formed during the reporting period.

APMAS organized 700 member education ‘one-day’ orientation programs. In total 16,628 members have been covered at SHG level and 9,990 SHG leaders at federation level were provided with training inputs during 2006-07.

Assistance was also given in updating records, 83 master book keepers known as Nagaradeepikas and 875 book keepers were identified, trained and placed to write the books in SHGs.

Using APMAS expertise in rural areas, the CRP strategy is employed in the three towns. This approach has proved useful.

The teams specially worked on bank linkage. The efforts include developing rapport with banks, assisting banks in documentation and recovery loans, especially bad debts. Appreciating APMAS, efforts the banks provided loans to SHGs liberally. In total 1,081 SHGs got bank linkage during the reporting period. The APUSP ranked top, two of APMAS operational towns, viz. L B Nagar and Guntkul in terms of bank linkages.

________________________________________________________________________ Annual Report 06-07

17

Books have been designed for the SHGs and effective use of them is being encouraged.

2.3.3. Promotion of SHG federations

One of major objectives of APMAS and APUSP agreement 2006-07 was to promote SHG federations at ward/ slum/ settlement level and town level. To enhance the skills and strengthen capacities of the staff on Federations, APMAS has organized staff exposure to Sri Padmavathi Mahilaabyudaya Society, Tirupati. All the APMAS staff and Coordinators working in the three towns are involved in the program and gain clarity on federations and the members’ management. During the reporting year 84 settlement level and 3 town level federations were promoted. To encourage the federation process, matching grants have been arranged from APUSP. To strengthen the federations, six training programs have been conducted for OB and EC members of the federations on the roles and responsibilities of office bearers and representatives. Books have been designed for the federations and effective use of them is being encouraged.

2.3.4. Other activities Using its vast experiences and expertise in SHGs and federations in rural areas, APMAS brought in the ideas of insurance and food security, etc, along with CRP strategy, to the three towns.

APMAS facilitated meeting between SHG federations and select insurance companies like LIC, Micro Insurance Research Centre and Oriental Insurance, etc to discuss the best packages for SHG members. The members opted for the Janasri Bima Yojana scheme of LIC India. About 5,980 SHG members took the policy by paying Rs.5,38,200 as the premium by end of March 2007. APUSP also contributed a part of the premium.

Federation were encouraged and capacitated to take up the food security activity. During reporting period, the food security scheme has been initiated with the corpus of over Rs. One cr benefiting 5,844 members. Out of the total corpus, members contributed about 25% and the APUSP contributed about 46% and banks provided 28%. It is predominantly Guntakal’s scheme. Other two towns are yet to launch in a significant manner.

Under effective guidance of APMAS, federations started involving in, health education camps, legal awareness programs, etc. Federations in Gudiwada also helped flood victims.

Recognizing the valuable contribution of APMAS in strengthening SHGs and federations, APUSP extented the contract period for one more year (2007-08) for further strengthening of the SHGs and federations in these three towns. On its part APMAS intended to expand its engagement in promotion and strengthening of SHG sector in urban areas.

________________________________________________________________________ Annual Report 06-07

18

2.4. Other activities of CB team The CB team members were involved in implementing the smart card during the reporting period and intended to involve extensively in this program in coming year(s). The team members are also involved in preparing a film on SHG federations. The CB team conducted ‘Capacity Building Need Assessment (CBNA) of Boond Bachat Sangh, Kanpur, Uttar Pradesh, promoted by Shramik Bharathi organization during 21-23 August ’06 along with the QA team.

________________________________________________________________________ Annual Report 06-07

19

3. QUALITY ASSESSMENT

uring the reporting year the Quality Assessment team conducted 97 assessments, 4 national level trainings, 2 state level trainings, 6 regional level trainings and 2

institutional level trainings. The team also conducted two national immersion programs for north-east India participants. Under documentation, the team brought out the second report ‘Status of SHG federations in Andhra Pradesh, two consolidated reports of assessments for CARE Andhra Pradesh and CARE Delhi. The Unit also initiated preparation of a manual on execution of GRADES tool. Apart from the regular activities, the team members completed many important tasks.

D

Box – 5: About QA Unit Promotion of quality in SHGs is one of the major objectives of APMAS. To accomplish this vital task APMAS has set up a large ‘Quality Assessment’ (QA) unit in the beginning itself. Understanding existing condition would be the first step in the promotion and management of the quality in any sector. Therefore, the QA team invested a lot of resources and time for developing quality assessment tools for SMFIs/ SHGs and federations. It has been working towards the goal of sector-wide use of QA tools for improving and managing the quality of SHGs and SHG federations. APMAS/ QA team has participated actively in the development of a rating instrument by NABARD, the Critical Rating Index (CRI). This has been widely embraced by banks and government institutions. APMAS has developed rating instruments for federations, called GRADES, in collaboration with Micro-credit Ratings International Ltd (M-CRIL) New Delhi (a renowned rating agency). The Unit further developed two abridged versions of known as GRADES II and RAT. Apart from ‘GRADES, the team developed Social Intermediation Tool (SIT) and Self Assessment Tool (SAT) for SHG federations and a rating system, known as CoopRATE for the assessment of thrift and credit cooperatives. Using the GRADES, the QA team rated 333, comprising 266 village federations and 67 sub-district federations on the request of their respective promoters. The QA team provided ratings rating services to financial institutions (FWWB, SIDBI, BASIX), promoting agencies (SERP, DRDAs and NGOs) and funding agencies (CARE). The rating was mostly carried in AP and also across other states such as Orissa, Madhya Pradesh, Rajasthan, Assam, Uttar Pradesh and Bihar. Apart from directly rating, the QA team trained in rating and franchised a number of individuals and institutions to use the tools. The trainees known as Affiliates have rated another 297 village federations, 197 with GRADES and 100 with RAT.

________________________________________________________________________ Annual Report 06-07

20

3.1. Rating During 2006-07, the QA team assessed the quality of 97 SHG federations using the ‘GRADES’. Another 4 federations, promoted by CARE-CASHE partners, were reassessed during the year Out of these 97 (new) assessments, 50 federations are promoted by CARE-CASHE, AP’s partner NGOs (PEACE, PSS, KRUSHI, Navajyothi, MARI). Another two assessments were done for NGO promoted MACS and the remaining 45 were done for Government promoted federations. Of these 6 were impact assessments. 3.1.1. Important findings During March to September 2006, the QA team conducted 54 assessments (including re assessments) specifically for CARE-CASHE, AP. A consolidated report was prepared after analyzing the data sheets of the 54 assessments. The consolidated findings were presented with the CARE-CASHE, AP team and its five partner NGOs in the month of November at Warangal. One of the major findings is that there is very high positive correlation (+0.7) between the performance of the federations and the performance of their constituent SHGs (see figure below).

The total number of ratings, including those by agencies trained by APMAS, is around 1,000. In this process APMAS emerged as the first and perhaps the only agency in the country to grade SHG federation using an international standard grading tool. QA team also provides CGAP prescribed trainings in three themes, viz. (1) Financial Analysis (FA), (2) Accounting and Book-keeping (ABK) and (3) Delinquency Management and Interest Rate setting (DMIR) for SMFIs/ MFIs and individuals who want enter in microfinance sector. These trainings are organized at national, state, regional and institutional level. Yet another important contribution of the QA team, maintenance data base of assessed federations. The team planned to bring out the consolidated report on status of SHG federations: APMAS Quality Assess Reports periodically. It is hoped that such a series of reports would be very useful all stakeholders of the sector, policy makers and researchers.

________________________________________________________________________ Annual Report 06-07

21

SHG Performance Correlated with Federation Performance

40%

60%

80%

100%

SHG Performance Federation Performance

The high correlation implies that investing in building high quality SHG-federations would lead to high quality SHGs (or it may be other way round). Another important finding is that the federations are in nascent stage with limited resources and capacities. They are offering limited financial, insurance and non-financial (social) products and services. Internal systems need to be strengthened. One of the major recommendations is that the office bears (OBs) need capacitated and encouraged to take active role in management of federations. The OB members should have longer term in office so that they can internalize systems and assert themselves in functioning of their federations. 3.2. Documentation During 2006-07, the QA team brought out 2nd report in the series of ‘Status of SHG Federations in Andhra Pradesh: APMAS Quality Assessment Report’. The team prepared a consolidated report of 54 assessments (including four reassessments) of CARE-CASHE partners promoted federations in AP and submitted the same to CARE-CASHE. AP. On the request of CARE, Delhi Office, the QA team prepared another consolidated report of 24 assessments of CARE-CASHE, AP partner NGOs (PEACE, PSS, KRUSHI) promoted federations and submitted to the CARE Delhi Office. A separate broacher for the Quality Assessment was developed. 3.3. Trainings and immersion programs The QA team provide training in three themes, viz. (1) Financial Analysis (FA), (2) Accounting and Book-keeping (ABK) and (3) Delinquency Management and Interest Rate setting (DMIR) for SMFIs/ MFIs and individuals who want enter in microfinance sector. These trainings are organized at national, state, regional and institutional level. During the reporting year, the team conducted four national level, two state level, six regional level and two institutional level trainings and two national level immersion programs.

________________________________________________________________________ Annual Report 06-07

22

3.3.1. National level trainings In 2006-07, the QA team has conducted four national level trainings. Out of these, two are on Financial Analysis (FA), one on Accounts and Book-keeping (ABK) and one on Delinquency Management and Interest Rate (DMIR) for SMFIs/MFI staff. About 90 participants from different states have attended the trainings. Courses covered

areas such as Accounting and Bookkeeping, Calculating Financial Indicators and Delinquency Management as well as Setting Interest for Organizational Sustainability 3.3.2. State level training APMAS organized two state-level training programs on Financial Analysis and Book Keeping and Accounting. The training helped participants to gain skills on writing books of accounts and preparation of financial statements and calculation of financial ratios. The practice sessions in the training were useful for participants to get confidence in training others in the same areas and managing their own federations. Attendees included staff from various NGOs and affiliates of APMAS. 3.3.3. Regional level trainings The team has organized six regional level trainings on Financial Analysis, Book-Keeping and Accounting in Nizambad, Vijayawada, Visakhapatnam, Ranga Reddy and Chittoor regions as a part of NGO support. 3.3.4. Institutional trainings During the reporting year, two institutional trainings were conducted for CReSA and PWMACS which were customized events as per the needs of these NGOs.

Financial analysis training at SHG learning centre

Trainings

1 1

3

2

1

3

1

2

1 1

0

1

2

3

4

National State Regional Institutional

Type of trainings

Num

ber

ABK FA DMIR Immersion ABK & FA FA & DMIR

________________________________________________________________________ Annual Report 06-07

23

3.3.5. National level immersion program for North East NGOs The QA team has conducted 2 immersion programs for NGO staff of North East states at the request of NEDFi and IIBM. About 70 participants from these states have attended the trainings. The objective for these trainings were (a) to orient the participants about various models of microfinance, concept, structure, cost of delivery model, challenges/ risks and MIS, (b) to learn about various strategies for poverty reduction through microfinance, (c) to understand the importance of delinquency and its calculation and (d) to learn through sharing of experience and knowledge among participants. 3.4. Institutional and Program Evaluations The QA team members conducted evaluations for CARITAS, OXFAM-BASIX and COVA during this reporting period. Details are as follows 3.4.1. Evaluation of Fellowship implemented program, supported by CARITAS in Orissa The objective of the evaluation is to assess the progress made during this three year (2004 -2006) project period and provide a way forward to issues such as sustainability of Peoples Organisation and the future role of Fellowship.1st phase evaluation was conducted during 04-15 December 2006. And 2nd phase evaluation was conducted during 09-14 January 2007. 3.4.2. Intermon Oxfam – BASIX: MF project review Intermon Oxfam has been implementing the CBMF project in 4 districts (Osmanabad, Beed, Latur and Parbhani) of Marathwada region in Maharastra, with the support of IGS-BASIX for conceptualizing and implementing a suitable finance product for CBMFI. This review was taken up since the project was concluding by December 2006. At this juncture there is a need for a detailed review of the current status of the CBMFI project vis-à-vis the original objectives and milestones as agreed between IO and BASIX to identify concrete strategies for the extension, expansion and long – term sustainability of the project. 3.4.3. COVA evaluation COVA institutional evaluation has been conducted during 9-16 December 2006. This has been a learning experience for the QA team in evaluating performance of an overall institution in a different area of operation. The specific objectives of this evaluation were:

________________________________________________________________________ Annual Report 06-07

24

• To study the impact of promotion and strengthening of women's cooperatives in the old city of Hyderabad has lead to socio economic empowerment of women and contributed to COVA's vision.

• To study the progress made by Mahila Sanatkar and Roshan Vikas in their march towards organizational and financial self sustenance

• COVA's role to serve as a Resource Center regarding facilitation of growth, empowerment and self sustenance of MS and RV

• To make recommendations regarding strategies for scaling up operations of Mahila Sanatkar and Roshan Vikas

3.5. Capacity Building Needs Assessments (CBNA) of institutions CB needs assessment is the logical subsequent step, if not an integral part of quality assessment. As APMAS is a major CB organization, the QA team does not automatically undertake CBNA after quality assessment, unless the promoter/ federation asked specifically on moral grounds. During reporting period, the QA team conducted ‘Capacity Building Need Assessment (CBNA) of Boond Bachat Sangh, Kanpur, Uttar Pradesh, promoted by Shramik Bharathi with CB team, conducted the CBNA Rural Development Trust staff, Anantapur with APMAS regional of Anantapur. Following the CBNA of RDT staff, APMAS Regional Team at Chittoor begun providing technical support on the capacity building needs which emerged out of this exercise. The themes identified include PTM, book keeping and the executive development program. The QA team also conducted the CBNA of Manyaseema Federation. 3.6. Other activities The team members performed many inter-team activities such as, organizing consultative forum meetings, organizing VO-bank linkage workshops, involving in setting up of the SHG learning centre, organizing in-house training programs, etc. The team members also provided support to other teams at head office and field such as providing back up support, financial data analysis for the Research and Advocacy team, team. 3.6.1. Financial Inclusion: Government of AP, in consultation with IDRBT, Bankers and the District Administration of Warangal, has decided to implement a pilot project on financial Inclusion in Warangal district. Over the past three months, several rounds of consultations were held with RBI, Bankers, IDRBT and other major stakeholders. The Department of Rural development took the leadership in facilitating the financial inclusion pilot with SHG federations at the village level, called village organizations, as the Business Correspondents. It was also decided that the Business correspondents will disburse the Social security pensions and the payment of wages under the Andhra Pradesh Rural Employment Guarantee

________________________________________________________________________ Annual Report 06-07

25

scheme to begin with. Once they gain confidence and experience, they would provide full range of banking services by acting as the business correspondents of the concerned Bank. The Rural development department asked APMAS to facilitate Awareness generation, Training, Capacity Building of BCs and Monitoring & Evaluation related to financial inclusion in this pilot programme.

________________________________________________________________________ Annual Report 06-07

26

4. LIVELIHOODS PROMOTION

he work of the Unit, during the reporting period, could be divided into five broad categories, viz. (1) Integration of livelihoods with SHG federations’ agenda, (2)

Strengthening of institutions, (3) Sub-sector studies and value chain analyses, (4) Training and exposures, and (5) Networking and sharing of experience and learning.

T

Box – 6: About Livelihood Promotion Unit As SHGs get matured and start getting larger loans from banks on a regular basis, the need for converting those loans into additional incomes to the members/ families would arise. It is a real challenge. To meet this challenge APMAS initiated a Livelihood Promotion Unit in 2004 with the financial support from the Aga Khan Foundation under its SCALE project. Through this unit, APMAS is playing a catalytic role in rural development/ livelihood promotion by bringing together the rural development/ livelihood promotion projects, expertise, experiences, needs and all stakeholders. The major objective of the Unit is to integrate livelihood promotion with the agenda of SHG federations. The Unit is working on this integration with SHG federations in five clusters (a sub-district unit) in AP. Under this activity, the Unit is working on mapping of different livelihood initiatives and studying their life cycle in finding out gaps to provide critical interventions as well as key inputs for incremental incomes. The value chain approach is also being used in this task. The second major activity of the Unit is to develop institutions to promote ‘natural resources’ based livelihoods especially agriculture and livestock, which form the basis of livelihoods to about three-fourths of people in rural India. Under this activity the Unit is anchoring two District Livelihoods Resource Centers (DLRCs) in Adilabad and Kadapa districts in collaboration with the District Water Management Agency (DWMA), the AP Academy of Rural Development (APARD), and the Department of Rural Development (DRD). The two DLRCs have been developed as model DLRCs in the state. The two DLRC have developed customized training modules, pool of resource persons and demonstration sites on different themes of livelihoods. Third major activity of the Unit is promotion of best practices in livelihoods. Under this activity, the Unit promoted AP Livelihood Learning Group (APLLG), with major organizations in the state, which are working on livelihood promotion. The group meets periodically. In these meetings, the members share their experiences and discuss at length on one separate theme in each meeting. The two DLRCs also promoted district level livelihood learning groups (DLLGs) in their respective districts continuing promotion of best practices. Another strategy adopted by the Unit in promotion of best practices is ‘documentation and dissemination’.

________________________________________________________________________ Annual Report 06-07

27

4.1. Integration of livelihood promotion with SHG federations Integration of livelihood agenda with that of SHG federations’ agenda is the major objective of the Unit. Perhaps this is a unique objective of the Unit. Very few organizations in the sector have such an objective. Under this activity the Unit is developing five clusters as livelihood clusters. The clusters are Aluru (Mahbubnagar district), Chennuru (Adilabad district), Dachepally (Guntur district), Lakkireddypally (Kadapa district) and Parigi (Ranga Reddy district). Needless to mention that building livelihood clusters is a multi-years task. The Unit continues its support to these five clusters as per the need during the report period. Cluster-wise broad initiatives and interventions and specific services and critical interventions provided are given at Table – 4.1. Table – 4.1: Cluster-wise interventions at five livelihood clusters

Cluster Intervention/ Initiative Services / critical interventions provided for livelihood promotion

Aluru Enterprise promotion

CB and skill building on tailoring, establishing collective stitching unit, providing marketing strategies by establishing linkages. Cost-benefit analysis is done to assess its viability and develop appropriate strategies.

Chennuru

Agriculture inputs, Land development, Micro enterprise, Livestock development BMCU revival and linkage with MS EGS IB and NRM model intervention - Vemanpally Model watershed interventions – Chakepally

Micro Credit Plans for CIF distribution at VO, MS level for livelihood interventions and effective revolving credit resources. Book keeping, systems and procedures for institutionalization Sub-sector studies on NTFP, Dairy and BMCUs is taken up and appropriate measures were put in place Proper utilization of CIF and improved revolving with repayment strategies.

Dachepally

Promotion of IPM practices in Cotton and Chilly for better production and marketing through Spices board, in collaboration with SERP

Reduction of input costs with required interventions in package of practices. Construction of drying platforms to achieve higher prices via better quality.

Lakkireddy pally

Livelihood options and initiatives as individuals and as collective

Providing required inputs in choosing livelihood activities

________________________________________________________________________ Annual Report 06-07

28

Parigi Improvement of land and water management practices for better productivity

Formation of CIG from SHGs, federations; to concentrate on the activities to be taken up.

As part of livelihood cluster development, the Unit has developed demonstration sites on (i) post watershed management, (ii) model watershed and (iii) IPM practices in collaborations with NGOs viz AWARD in Adilabad, JCSS and RHGBMSS in Kadapa, and EFFORT in Guntur district during the reporting period.

4.2. Strengthening of Institutions As mentioned elsewhere in this report the Unit has been anchoring two DLRCs. The major focus of the Unit during the reporting period was on strengthening of these two DLRCs and the corresponding CLRCs. The institutional development activities include (a) constituting governing bodies, (b) streamlining procedures, (c) strengthening the pool of resource persons (PRPs) and (d) up- grading infrastructure and resource and learning material. Under the effective guidance of the Unit: (a) The two DLRC have assessed the capacity building needs of secondary stakeholders systematically and prepared the comprehensive annual capacity building plan in each DLRC.

Resource material and tools used for trainings at Adilabad DLRC

________________________________________________________________________ Annual Report 06-07

29

(b) The two DLRCs have conducted the CB programs as per the schedule. In total 7,308 secondary stakeholders were provided training and exposure during the reporting period by the two DLRCs. The trainees include 6,085 men and 1,223 women.

(c) DLRCs have collect a large number and variety of resource material and compiled them into manuals, modules, case studies, books, leaflets, thematic books for reference, pictorial charts and posters and audio-video material, etc on divergent themes.

4.3. Sub-sector studies and value chain analysis

The Unit conducts a number of sub-sector studies and value chain analysis every year to prepare its action plan. During the reporting period, the Unit initiated five sub-sector studies and value chain analysis in Soyabean, Redgram, BMCU, FIAC and livestock. Out of these five studies, four were completed during the reporting year and the studies’ recommendations were also implemented. Table – 4.2 summarizes the major findings of all the five studies, actions taken to implement the first four studies and their outcomes. Table – 4.2: Major findings of sub-sectors studies, measures to

implement the findings and their outcome Sub-sector study Study findings Measures taken Results obtained

Redgram Study

Selection and treatment of seed material is incorrect. Practices IPM are not used and produce grading is also absent. Grading of produce is lacking.

Eco-farming practices introduced to reduce pest pressure on crop. Product grading is advised as a way of achieving higher revenues.

Subsequent to grading prices achieved rose by 5-7%. LIESA practices helped to reduce input costs and thus also raise profits.

________________________________________________________________________ Annual Report 06-07

30

Soyabean

High external input cost being incurred to raise crop. Inappropriate package of practices being adopted. Lack of knowledge in adopting new eco-farming low-cost techniques in cultivation, harvesting and marketing the produce. Indigenous vs. variety seeds

Introducing LIESA practices through IPM, INM, appropriate measures to reduce weeds and thus labor costs. Usage of advanced harvester and tiller, grading of produce for quality enhancement and better price. Rotation of seed material and safeguarding of biodiversity.

Could reduce the input costs up to 8% and increase the product price with an enhanced profit up to19%. This intervention has taken place in three villages with 93 numbers of farmers and moving towards collective marketing through cooperatives. Linkage with line departments.

BMCU (Gadwal, Chennur, Chittoor)

Defunct due to lack of proper forward and backward linkages in the production cycle. In spite of IKP intervention a proper support mechanism is still needed to ensure the intervention can be both sustained and effective.

Conduct viability assessment to implement required linkages in Chennuru. Proper institutional structure installed with a collection centre to store milk purchased from villages. Sustaining individuals in their activities, as part of initiatives by a few families, through support from paraprofessionals and management services.

One of the BMCU could be tied up with Mandal Samakya for its smooth running and two other BMCUs have been revived with required strategies provided to them for its smooth running at Chennuru cluster. MS is looking ahead to extend its activity in establishing dairy unit with few milk animals. In preparation both viability and cost/benefit analyses are to be undertaken.

________________________________________________________________________ Annual Report 06-07

31

FIAC

Centre not functioning because of unavailability of funds, staff re -allocation and assumption of responsibility of these FIACs by ATMA and the agriculture department.

Study done to assess prospects for revival of at least two centers, with appropriate systems, to serve farmers as originally planned.

A proposal is in place for revival of centers; with seed funding from an appropriate agency the aim is to create an income generating, sustainable organization.

Small Ruminants

Appropriate precautionary measures were not in place to address health disorders. No stall fed mechanism adopted and required medical and management system not in place. Insurance and security is not in place.

Viability is studied to group the clients according to the livelihood option chosen. Para professionals were put in place by providing required trainings and linking them to the veterinary department and other line departments to provide services. Insurance promoted as a way of lowering risk.

In two model villages all the animals were insured and provided with back up support required from time to time thus making the livelihood promotion a successful intervention.

Livestock Study

A viability assessment was not done before introducing the Murra breed into the area. No proper care was taken in management of practices to maintain specific, introduced dairy animals. Line department linkage is absent in promoting support services.

Interventions to be implemented next season.

________________________________________________________________________ Annual Report 06-07

32

During the reporting period the unit also completed a video-film on NRM based livelihood promotion implemented through various programs in the state.

4.4. Training programs During the year, the Unit organized a variety of training programs. These include:

a. Two customized national immersion programs on livelihood promotion for CARE CAHSE, West Bengal.

b. Training to all DLRCs in the state on Participatory Training Methods (PTM). Helped them in preparing them vision and business plan for all Livelihood Resource Centre (LRCs), i.e. all DLRCs and CLRCs.

c. Customized in house training programme for RDT, Ananthapur on livelihoods concepts and approaches.

d. TOT program for the pool of resource persons on NRM based livelihoods. e. Apart from involving/ inviting the

APMAS professional staff of other units, in different training programs conducted by the Unit, it also sponsored them in other important training and exposure programs on livelihood promotion. The major themes for the training programmes included fundamentals in livelihood promotion, advanced concepts in livelihood promotion, micro enterprises, proposal development, and vision building exercise, Employment Guarantee Scheme, organizational development and appreciative enquiry.

f. Organized an exposure visit to 13 pool of resource persons and DLRC staff to MSSRF and Dhan Foundation

g. Developed a financial management module for LRCs (include both DLRCs and CLRCs).

h. DLRCs trainees include MDTs, WDTs, PIAs, DRPs, TAs, NGOs, CCs , APMs, PRPs, Sarpanches , VO leaders , Watershed Secretaries , User groups , PRI representatives , Mandal level officers

An exposure to govt. officials on 4 waters concept

________________________________________________________________________ Annual Report 06-07

33

Orientations on APREGs to the project field staff On production enhancement in collaboration with WASAAN

4.5. Networking The major purposes of networking (a) cross learning, (b) dismination of sub-sector studies’ findings and other learning and (c) policy advocacy. Under the networking, the unit has interactions with two SCALE project partners of AKF, viz. AKRSP and ARAVALI and organized two meetings of APLLG. The two DLRCs have organized meetings of their respective 4.5.1. Initiatives with other partners of SCALE: During the last review of AKF the importance of sharing knowledge and experience in order to support similar initiatives by other SCALE partners became apparent. Separate funding provision has been made for such initiatives. Taking the discussions forward APMAS has initiated development of a work plan in the area of Microfinance with AKRSP (I) and ARAVALI in institution building. In this regard,

As part of outreach and collaboration with other SCALE partners an orientation was given to the ARAVALI team on the learning of DLRCs.

The Livelihood team took part in the consultation workshop and advocacy event of LEAD LAN Network which focused on Livestock and Livelihoods. Several areas of concern were identified relating to Livestock including issues of health, breeding, access/ path to market and credit/ additional financial services. Follow up strategies to address the challenges discussed were invited from participants.

________________________________________________________________________ Annual Report 06-07

34

4.5.2. Livelihood Learning Groups at State and District levels Andhra Pradesh Livelihoods Learning Group (APLLG) is made up of different livelihood promoting agencies. The group’s function is to allow formalization and documenting of ‘best practice’ within the sector as well as to promote sharing of organizational experience and help to ensure that lessons learned now are applied in the future. The group also aims to a wide dissemination of this information at state level. APLLG held several meetings and much productive discussion took place regarding development of the design, role and function of this group in the longer term. During the reporting year the Unit organized two APLLG meetings on (a) Capacity building in livelihood promotion and (b) Natural resource management. The two DLRCs have promoted District Livelihood Learning Groups (DLLGs) in their respective districts. Several different stakeholders working on livelihoods and development issues together formed the DLLGs to share and discuss views on core themes within the sector at District level. A number of meetings and workshops were conducted to discuss different sub-sector study findings as they emerge, and to help build consensus in the design of action plans to mitigate issues which become apparent. Areas covered so far include Livestock rearing and BMCUs, Agricultural Practices with a focus on Soyabeans and NTFP; analysis of the production cycle and value addition. The two DLRCs have started their own monthly news letters known as Jeevana Vaani and Jana Jeevani on livelihoods in Telugu for the benefit of farmers and SHG members and concern secondary stakeholders during the reporting years.

APLLG meeting at Dr. MCRHRD Institute

________________________________________________________________________ Annual Report 06-07

35

5. RESEARCH AND ADVOCACY

uring the year, research team of R & A unit, apart from completing the three studies initiated during 2005-06, initiated two major research studies and two small studies

viz. (1) SHG-Bank linkage Programme – A Recurrent Study, (2) Implications and Impact of large loans to SHGs, (3) . Major portion of these two studies have been completed. The team also completed three other studies that were initiated in the previous year, i.e. (1) Quality issues in MF sector in Rajasthan, (2) Voice of people on the lending practices of Microfinance Institutions and (3) Impact of microfinance on vulnerability to debt bondage, and (4) Feasibility of VO-bank linkage. Before discussing about the findings of these studies, a brief discussion about the studies initiated during 2005-06.

D

Box – 7: About Research and Advocacy Unit In APMAS’s organizational structure, Research and Advocacy are intertwined. The research results shape the work of APMAS in the field and its advocacy. The Research wing of the Research and Advocacy unit has produced 16 studies on the quality of SHGs, their federations and their impact, SHG-bank linkages, defaulting SHGs, and government interventions like the Rice Credit Line for Food Security. Most recently, in the context of a publicly discussed MFI Crisis, APMAS has carried out a study of MFI lending practices and participated in a policy meeting at RBI. Another important study of the Wing is ‘SHGs in India: Lights and Shades. It was conducted in collaboration with EDA Rural Systems. Though APMAS has an exclusive research Wing, other Units also conducte research studies of their interest. The R & A help the other teams in their research work and bring out all publications. During last six years, APMAS published over 45 research reports, manuals, posters, tool kits, etc and six video films. Advocacy is geared to the enhancement of self-managed MFIs such as SHGs and their federations. It is carried out by APMAS in three ways: through workshops, regular advocacy discussions, and personal contacts with policy- and decision-makers. Like research, advocacy has been undertaken by all Units in APMAS. AMPAS organizes its own policy dialogue periodically and actively participates in policy dialogue organized by other institutions at the national and state level. Apart from the formal meetings, APMAS has regular advocacy discussions with the following organizations: (a) Sa-Dhan, Share, Spandana, SKS and BASIX on healthy foundations of microfinance; (b) SLBC on bank linkages and ratings; (c) SERP/ IKP on institution-building, microfinance and livelihoods; (d) PRIA on PTM and Panchayat Raj; (e) The Rural Development

________________________________________________________________________ Annual Report 06-07

36

5.1. Follow up of studies pending at end of previous year During 2005-06, the Unit initiated three studies, viz. (1) Voice of people on the lending practices of microfinance institutions, (2) Quality issues in microfinance sector in Rajasthan, and (3) Community investment fund (CIF)- A study in Andhra Pradesh. During the reporting year these three studies were completed. A few subsequent developments are discussed below

5.1.1. Voice of People on the Lending Practices of Microfinance Institutions The study tried to give a deeper insight into the problems being faced by borrowers at the hands of lending institutions, like actual lending practices of various MFIs in the districts, rate of interest charged, various repayment and delinquency management practices that are applied and the issues and implications on loan borrowers and SHGs. The findings of this study became important basis for the public discussion of MFI crises in AP during February to May 2006. The findings were widely disseminated in different forms including at RBI organized meeting. 5.1.2. Quality Issues in the Microfinance Sector in Rajasthan The study was aimed at generating a roadmap for addressing capacity building and growth related requirements in the SHG movement in Rajasthan. During the reporting period the report was finalized and submitted to CmF, Jaipur. CmF brought out in book form. It was well received by the peers in the sector. The study was extensively quoted in the State of Sector Report 2007.

Department of AP on livelihoods and SHG movement; (f) The Urban Development Department of AP on urban SHGs; (g) CASHE project partners, GRAM, CEAD on strengthening the SHG movement; and (h) WASSAN network on rural livelihoods promotion The Communication wing of the R & A plays an important role dissemination APMAS learning and experiences. It handles all the publication work of APMAS. It maintain and up-dates APMAS website www.apmas.org. It brings out a monthly newsletter MAHILA SADHIKARATA, and helping the DLRCs in bring out their own news letters.

________________________________________________________________________ Annual Report 06-07

37

5.1.3. Community Investment Fund (CIF)- A study in Andhra Pradesh: The broad objective of the study was to understand the diversity of livelihoods promoted and its impact on the quality of life of the poorest and the poor. The specific objectives of the study were: i) to understand the socio-economic profile of the CIF beneficiaries; ii) to know the CIF loan process, utilization, repayment and the issues; and iii) to understand the impact of CIF on the SHG member households, SHGs, and their federations and community. The report was finalized and a copy was shared with the SERP to incorporate the finds appropriately in its action plans. 5.2. New Studies During the reporting period the Unit initiated four new studies, out of these four two are large studies and two are small studies. 5.2.1. SHG-Bank Linkage Program - A Recurrent Study in Andhra Pradesh The study was deliberated with three objectives i) to assess the quality and reach of credit in rural areas as a result of the bank linkage; ii) to identify the impact of the linkage and issues arising; and iii) to assess changes/ growth since a similar study undertaken in 2003-04. Study covered 240 SHGs linked to 24 bank branches in 8 districts. In all 96 villages were covered by the study. The total membership of the SHGs covered was 2,898. The study revealed that, in Andhra Pradesh, SHGs are seen as valued clients by most of the bank branches. Over 4,000 bank branches in the state are involved in SHG lending. The banks refinanced the SHGs even for 5 times. Loan sizes increased drastically, ranging between Rs.26,000 for the first linkage and Rs. 1,12,000 for the fifth linkage at an average. From the study findings it was felt that, proximity, social composition, leadership are not very influencing factors for bank-linkage any more.

________________________________________________________________________ Annual Report 06-07

38

The quality of older groups seems to be falling down. From the CRI tool that was applied at the time of data collection, only 30% of the groups got ‘A’, 40% being ‘B’ and remaining ‘C’. Banks appeared to be providing repeat loans based on the repayment performance, rather than the grade. In majority of SHGs, thrift rate remained static. From the total, around 40% of savings accumulated since inception, have been returned by SHGs to their members. With large loans becoming available at lower rates of interest, members tended to avoid loans from SHG funds unless they have a larger or emergency need. It was observed that repayment of bank loans was taken seriously by members, but it is less in the case of internal loans. Default in the case of internal loans is not dealt with seriously in places where it is a problem. Recovery of loans appeared best when repayment was in monthly installments. Bookkeeping and accounting continued to be of poor quality, as reported in the earlier study. Easy availability of credit (89%) and easy access to formal financial institutions (77.75%) are seen as the benefits of Bank-linkage Programme. Further, this credit availability impacted on increase in family income (72%), generation of new employment (47%), improved leadership capabilities (45%), health (48%) and increased expenditure on food and education (50%). However, there was less evidence of asset creation. Capacity and skill building trainings, bookkeeping systems, and management practices at SHG level are identified as niche areas for concern. 5.2.2. Implications and Impact of large loans to SHGs: The study was taken up to find answers to the question - ‘Are the large loans impacting change in members’ household occupations, rural credit market and at large in real empowerment of women. The implications of larger loans were studied from the experience of groups, which got large size loans, even if it is a culmination of a series of loans or grants from different agencies – Banks, SHPIs, DRDA, DWCD, NGOs, various corporations, etc. The specific objectives of the study are: to understand patterns of distribution for large loans and the factors influencing this distribution, what loan disbursement processes are adopted by banks and groups offering credit, how SHG members use the loans provided, what the repayment trends and impact on family consumption are as well as what effect larger loans have on individual indebtedness and group savings. In addition

Ms. Shashi Rajgopal, consultant for the study and Mr. C S Reddy, CEO, APMAS participated in a discussion with MS members at Machiral, Adilabad district

________________________________________________________________________ Annual Report 06-07

39

the study also attempts to provide insight into changes in factors influencing the economic situation of SHG members and their families such as family income, employment generation and asset creation/holding. The study was carried out in 3 districts, with highest average loan amount in 2005-06, representing 3 regions of the state - Ranga Reddy, West Godavari and Chittoor. The sample included only the SHGs which could access loans of over Rs.1,00,000 by June 2005, and had an outstanding at the time of the study. Major findings of the study are: Over 85% are formed before 2001 and 95% members are in productive age group. This could be one factor for sustainability of the groups for longer period and their better performance in terms of long and increasing bank linkage. A sizeable portion of groups and members are belonging to SC and ST communities. It is hearting fact. The average loan from both internal and external sources, is Rs. 14,000 and 85% of the amount was invested for capital formation and income generation activities. Over 52% of the total members generate additional hours of work. Over 69% of the members reported an increase in their family income. Other benefits included increase in children’s education, ability to get medical treatment, reduction in migration and repayment of old debts. About 58% reported an increase in the consumption expenditure, of whom majority are from socially and economically backward categories. The asset creation such as house, autos, occupation tools, land purchase, land development, livestock purchase and business improvement was observed in 68.5% cases. Though SHG members seem familiar with bank linkage issues their dependency on SHPIs for loan processing and administrative functions like bookkeeping remains an issue. SHPIs and Government are advised to consider these issues as they could become longer term constraints if left unaddressed. 5.2.3. Impact of Micro-Finance on Vulnerability to Debt Bondage This study aimed at understanding the phenomenon of debt trap from a micro-economic perspective at individual and the household levels. Being a small study, one of 11 APMAS operational districts - Nizamabad was chosen for the study. The sample consists of 60 indebted households from 6 villages of 2 mandals, that are in the coverage of MFIs like ASSIST, SKS, Homo Sapiens and ASP. The study tried to understand the nature of services extended by NGOs/ MFIs to members, the processes of credit disbursement, and the impact of Income Generating Activities on member households. Through this it tried to analyze the effect of membership in a microfinance programme on a household’s vulnerability to Debt Bondage. The information gathered indicated that 39% of the total members joined groups simply to access loans. Continuation of dependency on informal sources for credit was still evident. Of all, 27% of member households continue to depend on informal sources to meet day to day food requirements and 30% for agricultural inputs. During last three years, about 140 members initiated IGAs but of these 53% had to be additionally

________________________________________________________________________ Annual Report 06-07

40

financed from informal sources. MFIs credit coverage is limited and their promotion is mostly towards IGAs. The most common reasons for the debt trap are health emergencies. 5.2.4. A Feasibility Study on VO- Bank Linkage: As NABARD appearing to be positively inclined for bank-federation linkages, the Unit studied experiences of a few VO-bank linkages in Chittoor district. The results were compared with that of normal SHG bank linkage. As it is only a case study, the sample was limited to 2 VOs, 9 SHGs and 12 members. Major findings are: (a) Banks are positive, as give them a chance to get larger customer base and the VOs could help the banks in recovery drives. (b) Banks are apprehensive about the possibility of multiple financing to the same member, which may lead to defaults and delays in repayment. (c) One of the reasons for current delays in repayment is under finance, which fore the members to raise loans from money lenders at higher rate of interest and members repay the high cost loans first resulting delay in repayment of bank loans. 5.3. Advocacy As mentioned elsewhere in this report that advocacy is carried by all Units using different means such as organizing discussion forums such as seminars, workshops, conferences, lectures, etc and participate in different advocacy forums organized by others and one to one discussions with important institutions and individuals. During the reporting year, APMAS organized three lectures (details are given at next chapter). A number of APMAS staff participated in a number advocacy events organized by others. Some important events are: Microfinance India 2006, New Delhi; Bacon 2006, Hyderabad; SHG colloquium 2006, Jaipur; HR issues in SHPIs at IRMA; Sa-Dhan annual meeting at Bangalore to name a few. APMAS CEO’s meeting with the Chairman NABARD is one of the important meetings of the year. 5.3.1. Pre-Election Voter Awareness Campaign (PEVAC) This year, the communication wing of APMAS has involved in the Pre Election Voter Awareness Campaign (PEVAC) along with PRIA, ACTIONAID, APMSS, CEE, COVA, CWS, DBSU, Lok Satta at the state level and with many other NGOs and SHG federations at the district level. It aimed at rural people getting a clear understanding of their basic rights and responsibilities about electing their representatives to have good governance at different levels of local bodies and legislatures. 5.4. Publications and communication During the reporting year, the communication wing accomplished a number of important tasks, including involvement in PEVAC, launching of new website, redesign of new existing website, reprinting a number of old publications, registration of Mahila Sadhikarata with the Posatal department, helped the DLRCs to bring out their own

________________________________________________________________________ Annual Report 06-07

41

news letters, etc. These accomplishments were achieved without affecting the regular work publication of Mahila Sadhikarata, handing of all normal publications of APMAS, upgrading of the systems and managing the resource centre. 5.4.1. Websites This year APMAS developed and launched a comprehensive website totally dedicated for SHG movement in India known as SHG gateway (www.shggateway.in). This site serves as a forum for the Self-Help movement stakeholders across India. It includes research publications, organizations’ and consultants’ profiles, the latest news and highlights, events and job opportunities in the SHG movement. At the same time, the already existing apmas website has bee redesigned to have a more comprehensive look and to provide day to day information in-detail on all aspects of work at APMAS. Updated information on training schedules, areas of work, research studies, advocacy events, different kinds of tools and other resource material available, activity in clusters as well as major organizational events taken place can be had by visiting this web site.

5.4.2. Publications This year two research oriented books and one video film on SHG federations were published: Swayam Sahaaya Sanghaalu - Velugu Needalu (Telugu) Based on the case studies of APMAS and EDA Rural Systems study – SHGs in India: Light and Shades, a book in Telugu titled “Swayam Sahaaya sanghaalu -Velugu Needalu’’ is brought out. The book captured some best practices as well as some troublesome approaches in SHG movement in Andhra Pradesh and Karnataka. APMAS: Ensuring Quality in Self Help Banking - An Assessment The Unit brought out Professor Hans Deitrich Seibel’s APMAS’s evaluation report with above title. Video film on SHG Federation: Cheyi Cheyi Kalupudaam During the year APMAS produced a film presentation entitled ‘SHG Federations’. This film is intended to illuminate fundamental issues in the formation and running of SHG federations.

________________________________________________________________________ Annual Report 06-07

42

Reprinting of APMAS Publications: The Unit reprinted 18 old research reports, technical reports, manuals, guidelines, etc. Monthly Magazine: Mahila Sadhikarata The Unit brought out all 12 issues of the magazine without fail. This year the publication was recognized by the Registrar of Newspapers of India and also given a partial postage concession from the Indian Postal Department. With regards to content the publication also received recognition for its choice of themes and the caliber of qualitative reporting. Kakatiya University recognized MS for pre-doctoral article-ship. Over the last four years Mahila Sadhikarata has been provided free of charge to SHG Samakyas at different levels as well as to many GOs, NGOs and banks working in the SHG/MF sector. Many recipients have even chosen to pay for a subscription rather than receive it for free. In addition the publication began to take advertising and demand for space increased throughout the year. Brochures Brochures on APMAS, SHG learning center, Quality Assessment and a list of publications to date have been developed by the publication section to provide information about the organization across the country. 5.5. Resource Centre APMAS is organizing a comprehensive and informative resource center aimed at all those who wish to learn more about the SHG/ MF sector. Apart from nearly 50 publications and the ITC material developed by APMAS, the resource centre showcases hundreds of books by well known writers and organizations on the sector. Half a dozen daily newspapers and many magazines and periodicals both in English and Telegu are also available.

________________________________________________________________________ Annual Report 06-07

43

6. CENTRALIZED WORK

part from the team specific activities, APMAS as a whole accomplished several exiting tasks. In this task, the CEO took active role and coordinated or members of

more than one team had contributed. Important tasks that APMAS as a whole accomplished are:

1. Initiated institutional, program and project evaluation work. During the reporting year it has completed four evaluation works including an international evaluation work in Bangladesh

2. Initiated Smarajit Ray memorial lecture series. The first memorial lecture was delivered by Dr. Y. Venugopal Reddy, Governor, Reserve Bank of India on Rural Banking.

3. Took lead role in financial inclusion and introduction of smart card. 4. Took a proactive role for federation-bank linkage program. Organized six district

level workshops on ‘VO-bank linkage’. 5. Organized three consultative form (CF) meetings. 6. Set up a state of art SHG learning centre in the suburban of Hyderabad city. 7. Apart from facilitating the ‘impact assessment by Prof. Seibel, organized two

lectures on ‘Self-help banking’ and ‘evolution of cooperative movement in India and Europe’ by Prof. Seibel.

8. Entered into technical and financial collaborations with DGRV, Germany and INWENT, Germany.

9. Organized a study and policy delegation to Germany. 10. Organized one day national level consultation of SHPAs and resource

organization. 11. Launched SHG gateway (www.shggateway.in). It is being developed as one stop

resource site for SHG movement in the country. The existing website (www.apmas.org) was redesigned and improved significantly.

12. Two in-house training programs in executive development program (EDP) have been organized. Almost all staff members participated in the training. One in-house training on MACS act has been organized for the benefit of staff, who are involved field support.

13. EDP training is also arranged for 230 staff members of federations in APMAS operational areas.

14. Upgraded computers, communications equipments and transport infrastructure. Some of the above tasks are explained under one or another team’s activities. A few are self explanatory. A few important tasks are elaborated below.

A

________________________________________________________________________ Annual Report 06-07

44

6.1. Five years contribution of APMAS, an evaluation by Prof. Seibel On completion of five year, APMAS on its own initiated an evaluation of its impact. It requested Prof. H. D. Seibel, an international expert in mF to evaluate its work. The evaluation report turns out to be an excellent commentary on the SHG movement in India in general, in AP in particular. APMAS brought out the report for wider dissemination of valuable inputs, the report has. According to the report within short span of five year, APMAS got recognized as creditable support organizations in SHG sector in India. APMAS get known for its high quality professional cervices. The human resources are the major strength of APMAS. APMAS achieved high quality and voluminous output and outcome. To translate its output into the impact in SHG sector, APMAS has to work on policy advocacy. E.g. APMAS developed an international standard rating tool known as ‘GRADES’ and rated 333 federations directly and about another 300 through franchise method. Though the rating helped the federations and institutions to improve their internal systems, it did not help them in getting financial and other support from outside. Because in AP and India, banks are yet to start federation linkages and the government departments under pressure of disbursements fund the federations irrespective of their quality. Therefore, the report recommends the APMAS, among other things, to take up the policy advocacy to obtain conducive environment for orderly development SHG movement in the country. 6.2. Smarajit Ray memorial lecture series Late Shri. Smarajit Ray, who served as a Special chief Secretary, Government of Andhra Preadesh, contributed immensely for the SHG movement in Andhra Pradesh. He was main contributor for grounding of the Indira Kranti Patham (IKP) project, which turned the SHG program in the state into a mass movement. He was one of patrons of APMAS and guided its development as a member its Governing Board. Sadden by his untimely demise, APMAS initiated a lecture series in the memory of Ray. The first lecture was organized during the reporting year. Dr. Y. Venugopal Reddy, Governor, Reserve Bank of India delivered the first lecture on Rural Banking – Review and Perspectives.

________________________________________________________________________ Annual Report 06-07

45

Box – 8: Extracts from RBI Governor’s speech on Rural Banking In brief, the perceptions on the outcomes of vigorous and varied efforts to expand the reach of rural banking, seem to be less than expected. Perhaps it is time we ask ourselves some questions. First have our strategies, in terms of institutions and strategic directions, been flawed all along? Have we run out of ideas in this regard? Is our thinking on rural credit has fallen behind the emerging realities in the economy? Is there a need for distinguishing between the cause and the effect as also between the symptom and the disease? Is it lack of credit availability or want of commercial viability of agriculture that is constraining the credit-flow, or is it a complex combination of both? While we may not be able to answer many of these questions satisfactorily, I submit that we need to keep asking these right questions. “However, we need more thinking on the credit front. While the financial system should do more for the credit needs of farmers, we need to raise some questions. What do farmers need – a lower rate of interest or reliable access to credit at reasonable rates? Is our existing institutional framework adequate for meeting the requirements of our farmers who are a diverse lot? Do we need to create new institutional structures such as SHGs, micro finance institutions, etc, to provide improved and reliable access to credit? Or do we need to bring in money lenders under some form of regulation? It is necessary that we find answers to these questions in the near future.“ 6.3. Consultative Forum To have an independent channel of communication and to have direct window on emerging rural scenario, poverty eradication and women empowerment, the Governing Board mooted the idea of a Consultative Forum (CF) in 2004. Following the Boards decision, APMAS constituted a Consultative Forum with representatives SHG federations from 22 rural districts of Andhra Pradesh. The members, who have long of experience in SHGs and different levels of federations meet quarterly and deliberate on implication and impact of various programs and projects and other developments on the lives of poor and women. The proceedings are being presented directly in the Governing Board meeting by the members, who are happened to be members of both CF and Governing Board. APMAS has trained the rural poor women how to analyze emerging situations and helped them to effectively discharge their functions as members of CF. Till March 2006, the CF met five times

________________________________________________________________________ Annual Report 06-07

46

During 2006-07, the CF met three times. In these consultations members, provided their own experiences, analysis and perspectives for the decision-making process of APMAS. Additionally, the forum analyzed issues in the SHG movement and provides feedback, suggestions and recommendations for APMAS to act upon and advocate for the improvement of the SHG movement. The CF members asked APMAS to focus on: (a) Strengthening SHG and federations, (b) Federation

bank linkages, (c) Promotion of livelihoods through SHG federations and (d) Work for the cause of differently able persons. The forum also gave detailed activities to be taken up for the strengthening SHG federations. The forum also asked APMAS to work in urban areas and social issues. 6.4. VO-Bank linkage workshops APMAS has been advocating for federation- bank linkage for some time. During 2006-07, it attained a significant progress in this direction, when NABARD agreed to collaborate to organize district level worksops on VO-bank linkage. During the reporting year, APMAS organized six district level consultations in collaboration with NABARD and IKP in Mahabubnagar, Warangal, Adilabad, Prakasam, East Godavari and Chittoor . The workshops, reviewed current scenario in federation bank linkages in the districts, deliberated on the merits and demerits of VO-bank linkage and discussed on operational bottlenecks. A detailed consolidated report with recommendations and way forward was prepared and submitted to NABARD for further action.

Box – 9: Extracts from VO-bank linkage workshops report

The representatives of the Federations, banks and staff of IKP/NGO shared their views as to why financing Federations is needed. There was near unanimity on the usefulness

________________________________________________________________________ Annual Report 06-07

47

of the VO financing. All of them felt that VO financing could reduce the workload for both SHGs and also for the banks. Apart from workload other benefits were also discussed like • Federation is potential strategic partners of banks for expansion of services in remote

and lesser-banked areas with low transaction cost • Federations provide quality and sustainable financial services to SHGs • It helps in lowering the appraisal and transaction costs for both lending institutions

and the borrowers • It contributes long term sustainability of the services & institutions • It increases acceptance and create financial security among members • Federation financing can promote financial discipline at all levels • Availability of loans as per needs of the members will reduce the debt trap from

money lenders • Reduce default rates at all levels • Reduce cost of promotion of new SHGs Overall the VO members, IKP/DRDA and NGO staff showed enthusiasm and expressed interest in scaling up the VO – Bank linkage. All the bankers present were also keen on VO – Bank linkage and expressed that they would fully participate in upscaling the linkage process. However, in some districts they had some apprehensions as some of the VOs defaulted to the banks. The bankers concern was that the loans to VOs are large and collateral free. If there is any default, they will have to make 100% provisioning for that. Issues/Problems/challenges faced in financing Federations: • The loans to VOs are large and collateral free. If there is any default, they will have to

make 100% provision. • There was ambiguity in the issue of considering the VO corpus. Does it include

corpus of the member SHGs and that of the VO or it is just of the VO? • Clarity on whether to continue financing SHGs along with VO financing. • Treatment of existing loan outstanding with SHGs, while financing to VO • The documentation for VO financing is not yet streamlined. • Majority of VOs are in nascent stage and unregistered. Hence at VO level

understanding about managing high quantum of external loans and appropriate accounting system is lacking.

• There is unanimity between banker and SHGs. Where as it is very low at VO level due to lack of frequent interactions between banker and VO.

• Banker may not have control on ensuring end use of funds. • Capacity of community in managing bulk amounts and in maintaining appropriate

________________________________________________________________________ Annual Report 06-07

48

accounting system. • There is time lag between the documentation for VO loan and the sanctioning of the

loan. As a result the VO / SHG lending is not as per the Micro Credit Plan (MCP). • Bank managers’ discretion power is very less; they need to take permission for

controlling officer. It may lead to delay in the process. • Due to lack of awareness on VO bank linkage and financial discipline among the

members, local political leaders are influencing the repayment of bank loans. After the assembly elections, some of the local leaders spread rumors that all the loans will be waived off by the new government. This led to cause of SHGs defaulting to the VO and VO intern defaulting to the bank

• Meeting expenses for Community Based Recovery Mechanism (CBRM) field visits • No action against default is one of the aspect of increasing the default rate • Bankers expressed concern about SHGs not functioning effectively; the dynamics in

the groups are not effectual. • How to treat ‘pavala vaddi’ in case of loans to SHGs from VO

6.5. SHG Learning Centre The SHG sector needs enormous capacity building needs and there is huge gap between demand and supply of resource professionals, institutions and infrastructure. To meet the CB needs of the sector, APMAS set up a state of art learning centre for the sector. The centre is being developed as one stop resource centre. Located in scenic 100 acres orchard in the sub-urban of Hyderabad city, the centre has three conference halls, 20 residential, transport facility, communication, reading materials etc.

________________________________________________________________________ Annual Report 06-07

49

7. GOVERNANCE AND HUMAN RESOURCE

PMAS has dedicated and enlightened members in its governing board. The members with their vast experience in the sector not only guiding the organizations

admirably but always provide right directions. The members take active interest in the work of APMAS. During 2006-07, four formal meetings of Governing Board were organized on 1st July 2006; 1st September 2006; 9th November 2006 and 16th March 2007. The board members also gave time generously to the organizations in other informal consultations such as evaluation study of Prof. Seibel. Human resources are the core strength of APMAS. It has an international standard comprehensive HR policy, which is being implemented in letter and spirit. During the reporting year, APMAS constitute a committee to draft a gender and sexual harassment policies. A committee on HR was also constituted. APMAS gives utmost importance to the staff development. During reporting year 42 staff members have attended one or other trainings. The trainings range from one day in house training to month long VOLAG training at IRMA, to exposure to Germany. Two staff members attended a diploma programme on Organizational Change Facilitation being conducted by HID forum Bangalore. Two in house trainings on EDP and one-training on MACS have been organized during the year. Interns APMAS gets interns every year from different organizations from India and abroad. During the reporting year, APMAS received three international interns. Development of Individual Consultants: During this year APMAS has developed about 40 individual development professionals through continuous training and nurturing. All these consultants have supported APMAS in strengthening of the SHGs and Federations both in urban and rural areas as full time consultants to APMAS. During the reporting year all the consultants were given training on executive development, Accounting and Book keeping, participatory training methodologies etc. Affiliate system The objective of the affiliate systems is to provide required capacity building services to CBOs and SMFIs efficiently and cost effectively. To increase its outreach, APMAS has

A

________________________________________________________________________ Annual Report 06-07

50

selected several development professionals and supported them to develop as Institution Building/ Microfinance professionals through the APMAS affiliate system. To date, APMAS has developed 30 individual affiliates who are supporting APMAS in all regions. One review and two Capacity Building events are conducted for individual affiliates in every quarter.

________________________________________________________________________ Annual Report 06-07

51

8. FUTURE DIRECTIONS

hough the SHG movement’s achievements, especially in terms of rate of growth and bank linkages are impressive, there are many critical areas, which need to be

addressed. These include skewed development of SHGs, federations and bank linkages, rural and urban inequalities, sustainability of SHGs and bank linkages, legal and regulation issues, developing linkages between microfinance and livelihoods, social equity and women empowerment. APMAS identified the following five thrust areas to move forward during next five years. 8.1. Consolidation of gains and addressing the emerging issues in AP Though the SHG movement in AP reached saturation levels, in terms of coverage, federations, bank linkage and repeat bank linkage, there remain challenges like ownership, operational flexibility and sustainability of federations. Further, the SHGs and federations need to be capacitated to address the issues like livelihoods, social development, women empowerment, etc. Further, new issues like self regulation, smart card, total financial inclusion, etc, are emerging. The movement is also taking off in urban areas. In a sense AP has emerged as an experiment place for microfinance especially for SHG model. APMAS would thoroughly involve in addressing these issues. 8.2. Emerge as a national organization and attend to national issues APMAS plans to attend to national issues and concerns, especially the uneven development of SHGs. Toward this end it is planned to develop a national forum/ network to obtain conducive environment for orderly, even and effective development of SHGs across the country. Towards this end a national level network known as G5 network is formed, as a pilot, by APMAS, CmF, Chaitanya, ISMW and Reach India with the support of Ford Foundation. APMAS would extend its support in different states as per need and demand. Already APMAS has collaborations in Gujarat, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, West Bengal and North-east. 8.3. Facilitation of SHG federations as sustainable institutions APMAS has been working on and with federation for a long period and understood well their potential and limitations. Now APMAS is convinced that federations are the most

T

________________________________________________________________________ Annual Report 06-07

52

effective, and perhaps only, institutions for attaining financial inclusion with affordable costs. Recently APMAS prepared a comprehensive report on federations, which got released at the Microfinance 2007 conference. According to that study federations have great potential to address the issues of sector development, promotion of livelihoods, social development, calamity preparedness, development of social capital, etc. Therefore, APMAS want advocate the cause of federations. The issues to be focused are legal and regulatory framework, promotion of federations with clear withdrawal strategy, ownership and sustainability, agenda of federations, etc 8.4. Promotion of sustainable livelihoods It is well known fact that microfinance is only one of the means in promotion sustainable livelihoods. Further, APMAS learnt that there are enough resources, technologies, projects and programs for promotion of livelihoods. What is lacking is coordination among these and concerted effort. Therefore, APMAS plans to work on institutional development for promotion of livelihood through proper coordination with the existing resources and institutions. APMAS intend to promote two types of interventions. First one is promotion of livelihoods through federations. These could be farm based, off-farm based and non-farm based for enhancing the incomes of primarily the SHG members/ women. At the same time these interventions could also result in increase in incomes of children and families to a limited extent. Second one is the promotion of livelihoods through coordination of other institution. These would be ‘natural resource; based livelihoods, particularly agriculture and livestock. In this intervention incomes of members and their families would be augmented without any discrimination. 8.5. Strategic collaborations and partnerships APMAS strongly believes that realization of sustainable Self-Help movement in India and achievement of larger goals of poverty eradication and women empowerment need a number of small and big collaborations. APMAS wishes to have strategic collaboration with the Government of India and NABARD. APMAS is also seeks strategic partnerships with state governments, poverty eradication and women empowerment projects, donors, select NGOs, banks, resources institutions and development forums and networks. It is hearting to share that APMAS achieved considerable progress in realizing the above goals. It got support from Ford Foundation and NABARD (in principle) to expand to other states. Support from SDTT is also expected for expansion.

________________________________________________________________________ Annual Report 06-07

53

9. PARTNERSHIPS

PMAS believes that only through collaborations, with different stakeholders, the vital issues of women empowerment, poverty eradication and financial inclusion

could be addressed. APMAS welcomes support and collaboration from all the stakeholders, who is interested in promoting sustainable Self-Help movement in India and eager and willing to provide support to, and collaborate with all such stakeholders. Since inception, APMAS has been collaborating with a number of governmental, non-governmental and private sector organizations to provide and receive technical, managerial and funding resources. Major collaborators are:

1. DFID 2. Andhra Pradesh Urban Services for the Poor

(APUSP)

3. Aga Khan Foundation 4. District Rural Development Agencies (DRDAs)

5. Ford Foundation 6. Society for Elimination of Rural Poverty (SERP)

7. INWENT-Germany 8. DGRV, Germany

9. CARE India 10. Andhra Pradesh Rural Livelihoods Project (APRLP)

11. BASIX 12. District Water Management Agencies (DWMAs)

13. ASMITA 14. Commissioner of Rural Development (CRD)

15. Sa-Dhan 16. Participatory Research in Asia (PRIA)

17. THINKSOFT 18. Indian School of Livelihood Promotion

19. WASSAN 20. Consultative Group to Assist the Poor (CGAP)

21. GRAM 22. Centre for Environmental Concern

23. CEAD 24. Centre for Good Governance

A

________________________________________________________________________ Annual Report 06-07

54

APMAS sincerely record its gratitude for the following organizations for financial support

Department for International Development, UK of Great Britain (DFID) provided

the initial funding to APMAS through CARE from 2001 to 2006.

APMAS has received generous financial support from Aga Khan Foundation (AKF) for livelihood promotion related activities.

APMAS has received generous financial support from the Ford Foundation for

HR and other organizational development.

InWEnt –German government funding agency provided financial support for APMAS five year Impact Assessment.

________________________________________________________________________ Annual Report 06-07

55

APMAS ORGANOGRAM

GENERAL BODY Board of Directors

CS REDDY Chief Executive Officer

Programme Support Quality Assessment Quality Enhancement Research & Advocacy Livelihoods

A.V.Rajan AVP-Admin,Fin &HR

S. Rama Laxmi AVP

B. Anjaneyulu AVP

Dr. K. Raja Reddy AVP

Dr.K. Sridhar

Exe. Sec.

G. Rekha, AFM Chayadevi, AO G. Basi Reddy,

AA G. Satyanayana,

Recp. B. Lingesh, OA

i d

G.TrivikramaDevi, QAO

S. Vanaja, QAO

M.B.S.Reddy, CBC B. Geethanjali, CBO

K. Varalakshmi, CBO A Kannan CBA

Dr.G. Bhaskar Rao, RO V. Samatha, RA

JVK.Murthy, CM MSR.Krishna,

Sys.Admin.

Ch. Srinivas, LM

Chandrika AVP-Expansion-LH&

QE

Srinivas Siddi RM(I)-Vijayawada &

Nizamabad

C. Narayana Reddy RM-Ananthapur

N. Vinayaka Reddy RM-Chittoor

B. Nanji Reddy FTC-RangaReddy,

Mahaboobnagar

J. Murali, CBO K. VenkateswarRao,

B. Venkateswarlu, CBO B. Rajashekar, CBO

K. Badrish, CBO

Dr. Prahalladaiah, CBO K. Lugendrapillai, CBO

Gopal Raju, CBO Hemasundar LO

J. Ramachandrudu, CBO

S. Vijaykumar, CBO G. Srinivas, CBO

P L i CBOVP-Vice President, AVP-Associate Vice President, RM-Regional Manager, FTC-Full Time Consultant, RO-Research Officer, RA-Research Associate, CO-Communication Manager, Sys.Admin.-System

Administrator, QAO-Quality Assessment Officer, CBC-Capacity Building Co-ordinator, CBO-Capacity Building Officer, CBA-Capacity Building Associate, LM-Livelihoods Manager, LO-Livelihoods Officer, RM-Regional Manager, Exe.Sec-Executive Secretary, AFM-Assistant Finance Manager, AO-Administrative Officer, AA-Accounts Assistant, Recp.-Receptionist, OA-Office Assistant.

________________________________________________________________________ Annual Report 06-07

56

AUDIT STATEMENTS BALANCE SHEET AS ON MARCH 31,

PARTICULARS Sch. 2007 (Rs.) 2006 (Rs.) LIABILITIES FUNDS

CAPITAL FUND 1 19,023,911 18,084,546 ASSET ACQUISITION FUND 1 19,954,992 10,638,950

Total 38,978,903 28,723,496

ASSETS FIXED ASSETS (at cost) 2 19,954,992 10,638,950 CURRENT ASSETS, DEPOSITS AND ADVANCES

A: Current Assets Cash & Bank Balances 3 2,281,425 2,027,868 Term Deposits with Scheduled Banks 4 10,488,940 11,503,709 Interest Accrued on Term Deposits 82,904 167,092 Consulting Fees Receivable 10,385,305 7,618,826 Pre paid Expenses 214,841 196,328

B: Deposits and Advances 5 1,594,083 1,000,766 Total Current Assets 25,047,497 22,514,588 CURRENT LIABILITIES & PROVISIONS A: Current Liabilities

Statutory Liabilities 6 330,802 160,858 Outstanding Expenses 7 2,817,371 2,098,496 Consultancy fee received in advance 64,626 17,500 Magazine Subscription Received in

Advance 95,838 60,628

B: Provisions: for Gratuity 1,467,607 1,055,241 for Leave Salary 1,168,211 979,584 for Audit Fee 79,131 57,735 Total Current Liabilities 6,023,586 4,430,042

NET CURRENT ASSETS 19,023,911 18,084,546

Total 38,978,903 28,723,496

Fund Based Receipts & Payments Account 12

Notes on Accounts and accounting policies 13 For V.NAGARAJAN & Co., Chartered Accountants C.S. Reddy Dr. P. Kotaiah Chief Executive Officer Chairman (V.NAGARAJAN) Partner A. L. Nageswara Rao Dated: July 19, 2007 Chairperson - Audit Committee

________________________________________________________________________ Annual Report 06-07

57

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED MARCH 31,

PARTICULARS Sch. 2007 (Rs.)

2006 (Rs.)

INCOME Contributions / Grants Received 32,980,452 22,965,474 Consultancy fee 10,044,912 9,387,973 Income on Investments 8 521,358 371,412 Sale of publications & Magazine 270,805 365,361 Miscellaneous Income 10,392 174,231 Total Income 43,827,919 33,264,451 EXPENDITURE DEVELOPMENT PROGRAMME: Direct Programme Expenditure 9 16,199,089 11,612,689 Human Resource Cost 10 11,385,646 9,040,659 27,584,735 20,653,348 DEVELOPMENT SUPPORT: Human Resource Cost 764,609 882,668 Program Administration Expenses 1,478,532 1,784,996 Managerial Remuneration 11 1,289,630 1,434,597 Consulting and Meeting Expenses 156,644 137,413 Traveling and Conveyance 145,415 210,408 Repairs and Maintenance 109,724 203,324 Audit Fees and Expenses 101,520 88,744 Miscellaneous Expenditure 42,137 95,164 Irrecoverable Balances written off 320,060 386,475 Loss on sale of Fixed Assets 1,579,506 - Total of Development Support 5,987,777 5,223,789 Total Expenditure 33,572,512 25,877,137 Excess of Income over Expenditure 10,255,407 7,387,314 Amount available for Appropriation 10,255,407 7,387,314 APPROPRIATIONS Capital Fund (net of overspent / underspent) 1&12 939,365 5,670,353 Asset Acquisition Fund (Net addition during the year) (Purchase Rs. 1,20,74,348 less sale Rs. 27,58,306/-)

9,316,042 1,716,961

Fund Based Receipts & Payments Account 12 Notes on Accounts and accounting policies 13

As per our Report of even date For V.NAGARAJAN & Co., Chartered Accountants C.S. Reddy Dr. P. Kotaiah Chief Executive Officer Chairman (V.NAGARAJAN) Partner A. L. Nageswara Rao Dated: July 19, 2007 Chairperson - Audit Committee

________________________________________________________________________ Annual Report 06-07

58

SCHEDULES TO BALANCE SHEET AS ON MARCH 31,

PARTICULARS 2007 (Rs.) 2006 (Rs.)

Schedule 1 : Capital Fund A : Capital Fund Committed Fund: Overspent (pending disbursal) (1,874,873) (221,828) Under spent 845,834 (1,029,039) 6,761,366 6,539,538 Uncommitted Fund: 20,052,950 11,545,008Total 19,023,911 18,084,546 B : Asset Acquisition Fund Balance brought forward 10,638,950 8,921,989 Add: Allocated during the year 12,074,348 1,716,961 LESS: Gross Block of Assets sold during the year (sale consideration Rs.11,78,800/- only)

2,758,306 9,316,042 - 1,716,961

Total 19,954,992 10,638,950

Total(A & B) 38,978,903 28,723,496

Schedule 2 : Fixed Assets Cost as on 01.04.06 Additions Deletions Cost as on

31.03.07 Furniture & Fixtures 911,159 1,642,591 - 2,553,750 Office Equipment 1,378,205 1,218,058 - 2,596,263 Computers & Peripherals 3,773,048 1,900,752 512,696 5,161,104 Vehicles 4,211,979 5,859,425 2,245,610 7,825,794 Generators - 361,335 361,335 Solar and Water Heating Systems 245,296 245,296 Interiors at leased Premises 364,559 846,891 - 1,211,450 Total 10,638,950 12,074,348 2,758,306 19,954,992Total (Net) 10,638,950 9,316,042 19,954,992 Schedule 3 : Cash and Bank balances A : Cash in Hand 1,839 - B : Bank Balances - In Savings and Current accounts 2,279,586 2,027,868 Total 2,281,425 2,027,868

Schedule 4 : Term Deposits with scheduled banks IDBI Bank Ltd 5,862,462 3,655,266

________________________________________________________________________ Annual Report 06-07

59

State Bank of Hyderabad - 5,844,704

Oriental Bank of Commerce 4,626,478 2,003,739

Total 10,488,940 11,503,709 Schedule 5 : Deposits and Advances A: Deposits 390,767 393,143 B: Advances Recoverable:

Advances to Staff 189,442 103,001 Other Advances Recoverable 1,013,874 1,203,316 504,622

Total 1,594,083 1,000,766

Schedule 6 : Statutory Liabilities Provident Fund Payable 99,992 - TDS Payable 224,605 134,077 Profession Tax Payable 6,205 - Service Tax - 26,781

Total 330,802 160,858 Schedule 7 : Outstanding Expenses

LTC Payable 505,962 421,758 Travel Expenses Payable 120,477 50,627 Utilities Payable 16,376 - Salary Payable 220,235 39,725 Medical Expenses Payable 84,139 - Other Expenses Payable 1,870,182 1,586,386

Total 2,817,371 2,098,496 As per our Report of even date

For V.NAGARAJAN & Co., Chartered Accountants C.S. Reddy Dr. P. Kotaiah Chief Executive Officer Chairman (V.NAGARAJAN) Partner A. L. Nageswara Rao Dated: July 19, 2007 Chairperson - Audit Committee Place: Hyderabad

________________________________________________________________________ Annual Report 06-07

60

SCHEDULES TO INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED MARCH 31, PARTICULARS 2007 (Rs.) 2006(Rs.)

Schedule 8 : Income on investments

On Deposits with:

Savings Bank -

Fixed Deposit Accounts 521,358 371,412

Total 521,358 371,412

Schedule 9 : Development Program Expenditure

Quality Enhancement 2,135,586 2,127,354

Quality Assessment 1,064,310 1,047,589

Informed Advocacy 8,535,601 5,896,402

Livelihoods 2,507,908 2,541,344

APMAS Program Service 1,178,868 -

SHG Learning Centre 776,816 -

Total 16,199,089 11,612,689

Schedule 10: Human Resource Cost

Quality Enhancement 4,087,647 4,049,084

Quality Assessment 1,312,242 1,338,891

Informed Advocacy 1,700,963 1,309,163

Livelihoods 2,250,226 1,927,400

APMAS Program Service 723,275 -

SHG Learning Centre 238,320 -

Staff Training Programmes 1,072,973 416,121

Total 11,385,646 9,040,659

Schedule 11: Managerial Remuneration

Remuneration to CEO 1,124,630 1,219,597

Honorarium to Chairman 135,000 180,000

Sitting fee to Board Members 30,000 35,000

Total 1,289,630 1,434,597 As per our Report of even date

For V.NAGARAJAN & Co., Chartered Accountants C.S. Reddy Dr. P. Kotaiah Chief Executive Officer Chairman (V.NAGARAJAN) Partner A. L. Nageswara Rao Dated: July 19, 2007 Chairperson - Audit Committee Place: Hyderabad

________________________________________________________________________ Annual Report 06-07

61

Mission

• To enable SHPIs to provide quality services to strong and vibrant SHGs and SHG Federations.

• APMAS believes in self-reliance of community-based organizations engaged in microfinance and livelihood promotion,

strives for excellence in whatever it does and promotes the empowerment of women.

• APMAS will emerge as a national-level support institution by influencing appropriate policy and effective supervision of federations

Approach

• Collaboration with Government and Non Government Agencies in ongoing projects

• Promote Demonstration units on Pilot basis • Document and Disseminate Best practices in the areas of institution

building, micro Finance and Livelihood promotion.

APMAS

Vision

A sustainable self-help movement in India

Core Values

• Concern for quality • Continuous learning • Promoting self-reliance • Integrity and honesty • Openness