GUFSPL is providing micro credit services to its poor women clients. Enough care is being taken to provide need based and door step services to its clients as per their convenience. The operational model and Branch management of GUFSPL has been given below in nutshell to gauge the efficacy of the system. In GUFSPL, once the interested members’ meeting is conducted by the Credit Officer, they fill the individual forms for evaluation followed by a 2-day Compulsory Group Training (CGT) by the CO. Group Recognition Test (GRT) is conducted by the BM/AM as per availability. There is use of peer verification across groups, information collection from neighbours / household members. This information is mentioned in an intensive written document and cross-verification from group members is also done.
Repayment Capacity is assessed during the individual primary evaluation & CGT by CO; critically evaluated during GRT by BM and RM on door-to-door basis; information collection on household incomes, expenditures, assets and liabilities is also done. Credit bureau data is being referred to decide the repayment capacity.
Debt thresholds limits are calculated on the basis of the level of income or expenditure of the family. The loan product is designed with ranges in different cycles in commensurate with RBI guideline. Loan history of the client also captured in the loan application form and it is checked and kept available during and throughout the appraisal process (CGT and GRT). It was observed through the interaction with the staff members and clients in the field that the loan processing time of GUFPSL is 7-10 days. But, the current loans have taken about 2-3 weeks of time and that happens mainly due to non-availability of adequate loan funds. After the due diligence in the field, all the loan applications are presented and discussed in the loan committee in the Branch office as well as HO and gets approved accordingly.
Separate Audit team exist in the organization who conducts internal audit of two days for all the branch offices on a surprise basis. Audit team verify loan documents, all client enrolment documents, transaction related documents, staff behaviour, bank documents and conducts the field audit by attending 4-5 group meetings in one visit and also does the loan utilization check during their field visit. Audit team submits their compliance report to concerned branch office with copies to all concerned in the head office. Internal Audit needs to give more focus on code of conduct along with staff behaviour.
The price and terms of the loan are clearly disclosed to all the clients during their personal form filling, CGT, GRT, disbursement and group meetings (whenever there is a change / modification). Full and thorough, both verbal and written materials are supplied to the client. Within literacy limits, maximum clients are aware of the cost of loan.
Identification of group leader is done by the group members whereas GUFSPL staff act as a facilitator. The roles and responsibilities of the group leader and clients / members are discussed during the group meetings. The client is given loan if and only if she agrees for the terms and conditions and there is no scope for any other negotiation or discussion.
Separate modules are developed by GUFSPL and explained to all the staff with examples and guidance for interaction with the clients, roles and responsibilities of all staff levels and do’s & don’ts to be followed by the staff while interacting with the clients. GUFSPL gives more importance to field orientation than class room training.