Checklist for the Appraisal ofThis checklist consists of two main parts:
Savings and Credit Schemes
- I: An inventarization of existing savings and credit mechanisms and financial intermediaries
II: A checklist on some recommended mechanisms.
I: An inventarization of existing savings and credit mechanisms and financial intermediaries
Savings Strategies and Credit Needs
- Which perceptions do poor people have on savings?
- "... savings is refraining from consumption and takes place whatever the income we have ... "
- " ... savings is what income is left after all cunsumptive expenditures have been made ... "
- For which different purposes do poor people save?
- In which form do poor people save: cash, kind or both? Why?
- Do poor people save individually, group-wise or both? Why?
- What are the different savings time-patterns and amounts?
- What are the characteristics of the savers in terms of occupation , sex etc.?
- Which perceptions do poor have on credit?
- " ... credit is a gift ... "
- " ... credit implies repayment ... "
- For what purposes do poor people need credit?
Informal financial intermediaries include:
- relatives, neighbours and firends;
- traders, shopkeepers, landlords, owners of capital assets, private pawnbrokers, private bankers;
- rotating/non-rotating savings and credit associations.
- Which informal financial intermediaries meet the credit needs of the target group?
- What are the positive and negative aspects of the different informal lenders?
Formal financial intermediaries include:
- commercial and development banks;
- co-operative societies and credit unions.
- Which formal financial intermediaries meet the credit needs of the target group?
- What are the positive and negative aspects of the different formal lenders?
II: A checklist on some recommended mechanisms
The integrated approach
- Which programmes supplement and contribute to the savings and credit scheme of the NGO?
- Which parties implement the programme mentioned under 1 - target groups, NGOs government agencies banks etc.?
The linkage of savings and credit
- Does the NGO undertake savings activities and what is the specific aim of those activities?
- Do these savings activities refer to monetary savings or savings in kind?
- How is savings mobilization related to credit disbursement in the savings and credit scheme of the NGO?
- target group savings are one of the credit sources;
- borrowers are required to have savings equivalent to some percentage of the loan requested.
- Do the savings activities contribute to other programmes of the NGO like basic needs services, organization and awareness building and economic programmes? How?
- In which phase of the programme-activities of the NGO are the savings activities started?
- Are the target group savings being used as an instrument (i.e. collateral) to create access to the credit facilities of formal financial institutions?
The group approach
- Is the target population organized in any kind of group? Is this a traditional or a newly established group?
- What is the main purpose of these groups? Is the savings and/or credit provision the main aim or do they have other primary goals?
- What is the average size of the groups? Is there a minimum or maximum number of group members?
- What do group members have in common> DO the groups have a homogenous composition?
- In what way does the group provide guarantees for the loans of individual members?
- How is the purpose of loans determined?
- When are/which persons eligible for loans?
- Are groups and group-formations part of the strategies of the NGO to create facilities of formal financial institutions?
- Which interest rate is charged on loans?
- What is the present inflation rate?
- Does the income out of lending (determined by the interest rate and loan turnover) cover all costs involved with the lending operation of the NGO?
- What is the repayment rate on loans?
- Which factors explain the (changing) repayment rates?
- Which mechanisms enhance and stabilize repayment rates?
Risk-financing and sharing
- Which party carries or which parties shares financial responsibility for possible losses due to non-repayment?
- Which funds are being used to cover possible losses due to non-repayment?
- Do borrowers contribute to a loan redemption fund which (partly) cover possible losses due to non-repayment?
- Does the NGO act as a co-guarantor in the case of formal financial institutions which lend tot he target group?
- Has the NGO put an incentive or collateral deposit at a bank account to (co-)guarantee the lending operations of the bank to the target group and to create access to the credit facilities of formal financial institutions?
- de Groot, Han and Otto Hospes (1988), Policy Guidelines for NGOs Involved in Savings and Credit Schemes. The Hague: Nederlandse Organisatie voor Internationale Ontwikkelingssamenwerking (NOVIB), June, 38 pp.
Hari Srinivas - firstname.lastname@example.org
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