BSS Lending Methodology
We have adopted Joint Liability Group (JLG) method of lending, through which we lend to group based women, on Center / Group (up to 6 sub-groups) recommendation and guarantee. At present, we have only one project, called "BSS Microloan Project", (Group Lending Program) in which, we follow basic principles of original methods of Grameen Bank of Bangladesh with suitable local modifications. Presently, in our Group Lending program, only women can join.
- Age should be 18 to 53 years.
- She should be married & husband/guardian has to agree for her to join the program.
- Should be poor & permanent resident of that village/area.
- One member can join from one family.
- She should be able to work.
- She should not have defaulted with any organization.
- She should have minimum two valid KYC documents.
- Should comply with RBI & MFIN prescribed eligibility criterion, such as household annual income, KYC, total indebtedness, member not having membership in more than 2 NBFC-MFIs, etc.
- 5 members in a sub-group from different family & lived in same village.
- Member must know each other in money matters & know each other very well.
- Must not be blood relatives in same Sub-group.
- Should take responsibility among group members.
- Center is the basic functional unit.
- Minimum 2 sub-groups & maximum 6 sub-groups in a center.
- In a village there can be several centers.
- Center meeting will be conducted Weekly/Fortnightly/Monthly depending upon the requirement.
- Center meetings will be in central designated place as decided by members.
- Center meeting will be conducted in the early morning 6:30 am onwards & also convenient to organization.
- All members have to attend the center meetings regularly as per the schedule.
- Members are eligible to make a loan application in first Center meeting itself.
- 70% attendance requirement for individual member & center attendance must be 70% on the day of the members making loan applications.
- Total indebtedness of borrowers should not exceed Rs.1,00,000/- (excluding the outstanding of loans availed for meeting medical & education expenses of member's family).
- Loan Amount does not exceed Rs.60,000/- in the first cycle . Tenure of the loan not to be less than 24 months for loan amount in excess of Rs.15,000/- with prepayment without penalty.
- Loan will be extended only to borrowers whose annual household income in rural areas is not exceeding Rs.1,00,000/- or Urban and Semi - urban areas is not exceeding Rs.1,60,000/-.
- A micro loan borrower cannot be a member of more than one Self Help Group (SHG) / Joint Liability Group (JLG). Also they cannot borrow from more than 2 NBFC-MFIs, including our organization.
- Loan applications to be initially approved by Group / center members and they have to take repayment responsibility.
- Credit bureau verification is must for loan approval.
- Minimum two KYC documents are must for processing the loan application.
- Should be approved by credit committee of the Organization and minimum two staff should be involved for loan approval process.
- Loans will be approved predominantly for income generating activities except Alcohol business, arrack selling, tobacco business & other socially prohibited activities. We also give loans for Education, Housing and life quality improvement.
- Loan Disbursement will be made in Field Office & more than one individual should be involved.
- The attendance of center members should be 70% on disbursement day.
- Loan is disbursed on group / center responsibility.
- Past credit history of member, group / center must be good.
- Loan utilization & center discipline must be good.
- After the loan disbursement, a loan agreement copy (Loan repayment & promissory note) has to be given to clients as client copy.
- After the loan disbursement, Loan pass book card has to be given to members and entries will be made in vernacular language.
- We do not take any collateral / margin / security deposit for loan.
- Members should utilize loan for approved purpose only.
- After loan disbursement, all loan utilizations will be checked in next center meeting.
- Generally, further loan utilization will be checked once in 6 months during the tenure of the loan.
Quantum of Loan:
- Loan amount limits: minimum Rs. 8,000/- and Maximum up to Rs. 40,000/- depends on the loan product, all loan amounts will be disbursed in multiples of Rs. 1,000/- only, subject to member's eligibility.
- Weekly / Fortnightly / Monthly at the choice of borrowers.
Our operational and lending procedures ensure that the loan provided by us to the end-clients meet all the guidelines stipulated by RBI to facilitate the Banks to avail "Priority Sector Status" for the credit facility extended to the Company.