Tag Archives: Sri Lanka

Update on lending to India

17 Mar

We launched lending to India last year but our experience has been that it is a lot more challenging than what we originally anticipated. Due to various bureaucratic roadblocks we are unable to send the funds over to the microfinance partner in India and we will be returning the funds we have raised.

To give additional background, the loan to a microfinance partner has to go through an approval process by the bank and the bank subsequently needs to submit an application with the Reserve Bank of India (the regulator for all banks in India). Only when the Reserve Bank of India gives what is called a Loan Registration Number can we start lending. We went through this process earlier and it took a fair amount of time.

Subsequently we learned that if there are any changes to the actual loan amount or disbursement date from what was there in the original application, the bank through whom we send the funds is insisting that the application form needs to be resubmitted to the Reserve Bank of India. The paperwork goes through the bank’s branch and then their head-office. We have been working with the bank but we are not getting any clarity on the expected completion date.

 As a result we are unable to send the funds over to the microfinance partner in India. Hence we will be returning the funds we have raised from lenders for lending to entrepreneurs in India. We had put in a lot of effort to make changes to our website to support lending and this is very disappointing for us and we are sure it is even more disappointing for lenders.

Over the next few months we will explore how we can make lending work in India.  Meanwhile there are more many more loans coming up from Berendina in Sri Lanka, so please do relend your funds to support Berendina in Sri Lanka where we are able to make a positive difference to people’s lives.

Thanks for your continued support.

UnitedProsperity.org needs the help of all online microfinance lenders now!

15 Oct

Thanks to your support, we fully funded the previous loan to BMI that was approximately $80,000 in value. This gave us the confidence to sign up new partners in India and we also agreed to fund the subsequent loan of BMI of approximately $400,000 ($200,000 in guarantee) over the next one year.  

The last few months we have been working vigorously with our partners to have new loans on the website. As a result, we have a much bigger loan for BMI in Sri Lanka, we have signed up Prayas in India and we are in the process of signing up Mahashakti Foundation in India.  

In our journey we have met several milestones and also dealt with several formidable challenges along the way:

  • We launched in the middle of 2009 and pioneered the online guarantee model that doubles impact and builds local credit history for our partners.
  • The microfinance crisis in India paused our operations and we recovered by launching Sri Lanka in late 2012.
  • In August 2013, we launched the lending model in India because we could not work with the guarantee model due to the extreme caution shown by banks after the microfinance crisis in India.  We did not give up.
  • We have raised in-kind support for software development, marketing, website hosting and accounting.  

To grow above and beyond where we are today, we have three challenges:

  1. Run operations and raise funds offline for it:  Our operations are quite lean and our current monthly operating budget is less than $2000. We raise donations offline, and we find that donors are most often willing to donate provided we are able to show growth in families we have impacted.
  2. Expand partnership with banks and microfinance institutions: In our experience this is a relatively slow and bureaucratic process but with time we are confident of doing this.
  3. Fulfill loans online with the help of lenders: This is the most urgent need right now. If we are able to do this, we are confident that will be able to take care of the other two.

Overall we need to raise approximately $60,000 every month to support the entrepreneurs. To achieve this, we need many more new lenders lending on United Prosperity. Most of our new lenders have joined through our existing lenders who have encouraged their friends and family members to join.  So we need your help in encouraging other lenders to join.

There are several ways you can encourage other lenders to join such as giving a gift certificate, sharing on facebook / twitter, email your friends, share on forums. You will also find more ideas here: http://www.unitedprosperity.org/us/get_involved_individuals.

So please help us meet the unfulfilled need and encourage other lenders to join.  

Thanks once again for your support. 

More loans from Sri Lanka and re-launching in India

2 Jun

We are excited to announce that Berendina with whom we have been working over the past few months has got a significantly larger loan approved from their lending bank. This would mean that we will have many more loans from Sri Lanka on our website.

On top of that we are excited to announce that we will be launching in India with an online lending model. Many of you may wonder why we are launching a lending model when we have pioneered the guarantee model and when there are other organizations that have already proven the lending model. The reasons are simple:

We have learned that the guarantee model shows dramatic results when there is a certain degree of stability in the local microfinance market. If the stability is not there, banks are unwilling to lend to local microfinance institutions even with a guarantee.

Thus in several countries international lending may be the only viable model before banks are willing to step in and lend to local microfinance institutions with or without a guarantee.

There is a lot of work to be done to ending poverty. There is an urgent need for several organizations to be involved in fighting poverty at local and international levels. No one can do it alone.

The lending model is a means for our generous lenders to support communities where we are unable to make the guarantee model operational.

Over the last few months, we have been working with two microfinance institutions, Prayas and Mahashakti foundation, who will be our first set of partners in India. We are at the final stages of the paperwork and once we get a loan registration number through the Reserve Bank of India, we hope to have loans online in the next few weeks.

Prayas works in Kutch, Gujarat and Mahashakti foundation works in Orissa. Mahashakti foundation is also a Kiva partner.

While all this has been going on, Richaa Pokhriyal who has joined us as Project Manager out of New Delhi, India has been working with the team at Josh software to make changes to our website to support both the lending and guarantee models.  Richaa is the first salaried team member for UnitedProsperity.

We would like to thank our supporters who have stood by us through our long and at times tortuous journey. We are here because of your generosity, patience and resilience. Thanks once again.

Sri Lanka field visit

17 Feb

This is a post by Gautam Rege of Josh Software.  Gautam Rege and Sethu Ashokan are the co-founders of Josh Software in Pune, India.  Josh Software is one of the experts in building software with Ruby on Rails. They have graciously agreed to support the ongoing development of the United Prosperity website on a pro bono basis. They also volunteered to do a field visit to Sri Lanka to see how their contribution is directly impacting people’s lives.  They no doubt live up to their company’s name Josh that stands for enthusiasm and passion in Hindi. The post by Gautam Rege follows.

Bhalchander

_______________Blog post on Sri Lanka visit by Gautam Rege _________________

In the first week of February, Sethu and I were on a field visit to Sri Lanka that was organized by Berendina Micro Finance Institution (BMI) and UnitedProsperity. Little did we know what’s in store for us but we have come back home changed and inspired.

The visit agenda was to study the impact of the micro loans that Berendina provides to their customers and to see its impact. UnitedProsperity has been involved in providing the micro guarantees for these loans.

We arrived at Dickoya branch near Nuwara Eliya in the morning. A 4-wheel drive was required to scale treacherous uphill and winding roads. This branch services about 4000 micro-loans and is managed by just 6 Microfinance officers. After a brief presentation on what they do, we set off to meet the people who have been helped by these loans. The clientele varied from a house-wife whose has stared a business of incense sticks, to a person who has setup a shop, to a person who has purchased a cow for this small dairy and even a plantation worker who has built his own toilet! This post later contains some photos and videos about these people and the loan impact. What I shall talk about here is how this impacted us and what I felt was wonderful about this entire setup.

Berendina has been around for more than 25 years and their meticulous approach to doing good as a non-profit is seen in their actions. They have an innovative way of providing loans.

  • 3 beneficiaries form a group
  • 10 groups form a cluster
  • 30 clusters are managed by 1 branch officer.

This way 1 branch officer manages about 900 customers! There are regular cluster meetings where the money is recovered on a monthly basis and the group is responsible for their re-payment. This encourages the group to work together and support each other, even on repayment. In some cases to ease the process, BMI also gives loans to co-operative society as a bulk loan.

But Berendina doesn’t just stop there – they also have a Berendina Development Services (BDS) that is targeted only for improving the quality of life. One of the innovative approaches is about giving coupons for training camps – “Livelihood training”, “Entrepreneur accounts management” etc. These coupons are part of the loan and can be redeemed for training or they can get the cash value back in the case of unused coupons. This enables people to not just avail loans but also get some vocational guidance, education and knowledge. To my knowledge very few microfinance institutions anywhere in the world have implemented such a program.

The plantation worker story is an awe-inspiring one. BMI is the only Microfinance institution that supports plantation works whole-heartedly. Plantation workers are those who have been working for all their lives in tea plantations and are considered very high-risk customers for repayment. Their living conditions have traditionally been very poor. BMI strives to improve their quality of life by providing toilet loans, health camps, eye-checkups and even cataract operations all free of charge as part of their BDS initiatives.

Lets meet some of their customers:

Here are some memorable photos:

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The Berendina office, which houses Kishore, the Branch Manager and his 6 Branch Officers.

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Parthiban – the Hero of the day. He has received the entrepreneur award from Berendina.

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The old and the new hygienic changes that Berendina is bringing about. The plantation workers earlier had common open toilets as opposed to the new private clean toilets.

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The Happy Shopkeepers – Srikumaran and Bhuvaneshwari – their lives have changes after the loans they got from Berendina.

We also interviewed several clients and here is video of our interviews: Berendina visit video

We were also highly impressed by the transparency, dedication and commitment of the Berendina team. Travelling with them through the long day in a tough terrain, we were amazed to see that their energy level never flagged and they seemed to be going on an on like an energizer bunny.  This visit has energized us even more to do our bit to ending poverty.

Launch in Sri Lanka – new loans online

5 Dec

We are delighted to announce that we have partnered with Berendina Microfinance Institute in Sri Lanka and we have new loans online. It has been a long wait, and the wait is over.

Berendina  was originally started as a Trust named Berendina Stitching in 1987 by Mrs. Berendina Borst of Netherlands.  Over time the activities grew and Berendina Microfinance Institute (BMI) was setup in 2007.

There are several reasons why we decided to choose BMI as a partner:

BMI works directly with the borrowers rather than adopt a community based approach that is common in Sri Lanka. Thus they are able to reach the most vulnerable sections who are often neglected by the community based approach.

BMI works in difficult areas that are further away from densely populated towns.  During the floods of 2011 in Sri Lanka, in some areas they had to visit their clients by boat.

BMI works closely with Berendina Development Services in creating livelihood opportunities, health, sanitation and other areas.

They work with 280 private sector companies to create employment opportunities for the youth.

BMI has also been an innovator in several areas and has pioneered interesting approaches such as ‘enterprise and technical training’ for clients who take the enterprise loan.

The launch in Sri Lanka is an important step forward. We have survived the tough microfinance crisis in India and were able to successfully return 100% of the money loaned by lenders.

We are back on our feet now  and we  plan to grow UnitedProsperity.org with your continued support. Let us start by lending one loan guarantee at a time.

Upcoming launch in Sri Lanka

7 May

We are pleased to announce that we have started putting together the paperwork  for the launch in Sri Lanka. While the structure of the agreement with the bank is in place, there are still some clarifications needed on specific documentation requirements.

We will be updating the blog on the progress over the next few weeks. Thanks again for your patience and we look forward to  have entrepreneurs online soon.

Update on the legal agreement with the bank in Sri Lanka

13 Nov

In my  previous post, I had written that we were expecting to hear from the bank in Sri Lanka on the legal agreement. While we were expecting to hear back in 10 days from my previous post, we heard back only last week. It has taken longer than what we expected, but fortunately things are moving forward. For now, I will not make a prediction on how soon we will be able to move to the next step, but I promise to update the blog by the middle of December. Thanks for your patience.