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Assistance from Banks and
financial Institutions:
The State Bank of Hyderabad has extended
its support to the society to extend its
activities by way of financial assistance since
1997 for the purpose of on-lending to the
members. In 1997 it has provided Cash Credit
support with a limit of Rs. 8.00 Lakhs. In 1998
the bank has also provided its support through
ATL( Agriculture Term Loan) to a tune of Rs.
27.19 Lakhs for a period of 3 years to be repaid
in 18 bi-monthly installments. In 2001-02 the
bank has further extended another credit limit
of Rs. 33.14 lakhs, and in 2002-03 the SBH has
released another loan of Rs. 32.00 lakhs. From
this support so far 3500 beneficiaries have been
extended financial Assistance for uplifting of
their lives. In
2003-04 the SBH has provide Rs. 53.00 Lakhs and
it has also sanctioned Rs. 85.25 Lakhs for the
year 2004-05.
The Small Industries Development Bank of
India (SIDBI) has also come forward and provided
a loan of Rs. 15.00 Lakhs and capacity building
grant of Rs. 4.60 Lakhs in 2001-02 FY. Currently
it has again sanctioned and released a loan of
Rs. 45.00 Lakhs. In the FY2003-04 the SIDBI has
sanctioned and released Rs. 80.0 Lakhs and a
flexi grant of Rs. 7.00 Lakhs for the capacity
building of the society. If FY 2005-06 It has
sanctioned and released Rs. 200.00 Lakhs. In the
financial year 2006-07 it has released Rs.500.00
Lakhs loan. In the financial year 2007-08 the
SIDBI has sanctioned and released Rs. 800.00
Lakhs. It has also released under CSFT of
Rs50.00 Lakhs. For CB
it has sanctioned and released Rs. 16.70 Lakhs,
and released Flexi-II grant of Rs. 25.00 Lakhs.
The AXIS Bank has also sanctioned and
released Rs. 300.00 Lakhs as term loan. The AXIS
Bank has sanctioned Rs. 600 Lakhs for the year
2008-09 and released Rs. 600 Lakhs so far. The
HDFC Bank has also sanctioned and released Rs.
200.00 lakhs as term loan in the FY 2007-08. The
DCB has extended a buyout loan of Rs.
200.00 Lakhs n the FY
2007-08.
Further we are proud to inform that our
society has consistently been regular in meeting
our financial commitments and our recovery
record also very impressive with least NPA’s and
with adequate provision there
far.
Awards;
The PWMACS has received winner in Micro
Finance Process Excellence Awards 2005 conducted
by Planet Finance and ABN AMRO. It has also
received award in Micro Insurance award in 2007
conducted by Planet Finance and
ING.
Rating:
The PWMACTCS Ltd has been rated by two
rating agencies at the request of the SIDBI in
the financial years 2000-01, 2001-02 and 2003-04
by M-Cril, CRISIL and M-Cril respectively. Both the
agencies have given us a satisfactory rating
grade as a result of which SIDBI provided the
loans to our society for the purpose of
on-lending. In February 2006 the CRISIL and in
September 2006 M-Cril was again rated for the
same at the request of SIDBI. In November 2007
CRISIL has again conducted the grading exercise
based on the request of
SIDBI.
The latest ratings by M-Cril –
aminus
and CRISIL–
mFR4
Objective:
The objective of the PWMACTCS is to
promote economic and social betterment of its
members through thrift, self-help, and mutual
aid in accordance with the principles of
co-operation.
Mode of
Operation:
The basic unit of the PWMACTCS is a
thrift group at the village level consisting up
to 20 members subdivided in to 5 member groups.
Each thrift group elects a delegate for the
representative general body. The representative
general body will elect Board of Directors. The
Board is overall controller of the activities of
the society and policy formation, which will
meet every month. The president elected by the
board will be the head the society and the Chief
Executive Officer appointed by the board will be
responsible to implement the policies.
At the Village level the operations
(collection of thrift deposits and loan
repayments) will take place at weekly intervals
on fixed day and time. The loan appraisal will
be done by the members at the village itself in
the presence of Credit Officer of the
society.
Other
Activities:
Ø
Has under taken
Social Security Programs like Group Accident
Insurances Policy by linking with the Oriental
Insurance
Company.
Ø
Is helping the
community by organizing the health and
immunization camps.
Ø
Helping the water
user associations along with another
Organization viz., ”Creative Organization &
Rural
development”.
Ø
Providing drinking
water bore
wells.
Ø
Constructing school
sanitation facilities to schools in the
villages.
Ø
Providing
environmental friendly fuel efficient
crematoriums.
Chief Executive
Officer:
Sri P.V.Ravikumar, Post graduate in
Engineering faculty having 20 years experience
in Micro Credit and Rural development
activities. He promoted the PWMACS and made all
the success of the programme. In his carrier he
undergone many training programmes conducted by
NABARD, Sa-Dhan. He has also has international
experience in Micro finance. He visited
Bangladesh and Malaysia as part of training
organized by Banking Institute of Rural
Development,
Lucknow.
Decision Making
Process:
The PWMACS has written rules of business
and administration duly approved by the board.
As per the rules of business and administration
the regular daily process of thrift collection,
loan issues and other transactions were take
place.
Member
Joining:
In particular, the member joining will be
done at the village itself with the approval of
the co-members, concerned delegate (elected
representative of the thrift group) and the
group leader. All the members are to be joined
as nominal members by paying the entrance fee of
Rs. 10/- , an application requesting for the
membership with a mention of that they obey the
rules, conditions and responsibilities of the
members as per bylaw and society’s decisions
from time to time, in addition to this opening a
thrift account in her name in compulsory.
Joining in a group of 5 is preferred.
All the new member applications are to be
placed before the Board of Directors for
ratification. The nominal members joined are to
be the full pledged members by taking at least
one share.
Loan
Issues:
The full pledged members are eligible for
getting a loan from the society. The Society
will provide loans for all purposes to the
members depending on the thrift deposit of the
member. The maximum permissible limit of the
loan is 5 times of their
thrift.
The loan appraisals are to be done at the
monthly meetings of the village where the
delegates, group leaders and other members of
the thrift group will present. The filed
officer/ credit officer will appraise the loan
and provides information to the delegates before
the final decision of recommendations. The
recommended loan application farms will be
registered for loan appraisal process in the
society. The registered loan applications are to
be scrutinized and prioritized by the field
Officers/credit officers as per the approved
rules of the board and put for a section to the
Unit Manager. The Unit Manager will sanction the
loan if it comes under the present approved
rules/policies of the Board. In cases of
deviations, they are referred to the Head Office
for a final decision. The
applicants are intimated about the sanction and
probable date of disbursement. The whole process
will take about 7 to 15
days.
Policy
Decisions:
The Board is only competent authority to
take any policy decision regarding the business,
member obligations, staff and other human
resource. There are some written policies, and
some of the powers are delegated to the Chief
Executive Officer which comes within the written
policies. There are no sub committees
formed.
The policies regarding the Board, the
general body/ representative general body is the
competent authority to take the decisions.
Audit and Control
Systems:
The PWMACS has placed different control
systems in place in various processes. The
Resident Officer is also acts as internal
auditor of the society who will report to the
Chief Executive Officer / Board
directly.
The regular business, cash flows, will be
monitored through a computerized accounting
system and in addition to this there are many
checks and balances at each level beginning from
the field level staff to the office staff. Each
entry will be made at least in 5 places before
the end of the transaction.
Each transaction will be checked by 3
persons before it completes. The daily cash and
bank balances will be tallied with the actual
cash by cashier and another in-charge officer.
The cash and important documents will be kept
under the dual locking system.
Presently the regular audit of the inter
office documents, member obligations, other
process documents will be done simultaneously
along with the process. The field level audit of
loan utilization, member pass books and other
field level activities, documents, etc., will be
done once in 6 months in the ‘Chaitanyam‘
programme. In addition to this surprise
audit will be conducted in the field as when it
is needed.
We have an independent external auditor
appointed by the general body, who is charted
accountant and will audit the accounts, books
and other related documents once in a year. The
External auditor will submit his report to the
general body for its
approval.
In addition to this in the APMACS Act
1995, in which PWMACS was registered, the annual
audited accounts should be presented before the
general body in its regular annual general body
meeting to be conducted in the month of July
every Year and the surplus or deficit should be
distributed to the reserves and funds in the
ratios specified. In case cases deficit, the
amount should be absorbed by the society either
form the reserves or to be shared by the members
themselves.
The Board is sole responsible for the
actions of the general body. Ultimately this
will make the society run in a healthy
environment for ever
Delinquency
Management:
From the FY 2002-03 the PWMACS has
concentrated on the delinquency management with
the guidance given by the mentor. The
Delinquency management has nictitated by
improving loan tracking systems through the
computerized accounting/MIS and regular
monitoring.
The delinquency rate is managed in a
provisional way. The PAR of more than 60 days is
9.36% as on 31st march 2001, which is
come down to 1.78% by the 31st March
2004, 0.198% by 31st March
2007.
All the staff members, board of directors
and the delegates are made aware of the
necessity of the loan tracking and need to
maintain the loans
healthy.
The mentor has helped us in different
methods of loan tracking and methods of
delinquency calculations and their importance
and trends of microfinance worldwide, with
specific case studies.
Accounting and management Information
System:
PWMACS is presently working on fully
computerized accounting system. The MIS is
computerized and can be accessed on LAN by the
management at any time. The Brach is also
working on the same package. The Management at
the head office can have the total accounts
including the member accounting and MIS. The
branch data will be restored in the head office
system on the next day, which was received
through e-mail.
MIS is computerized and the reports on
portfolio quality, DCB, work load of the field
workers, financial reports are available to the
top management to middle management at any point
of time. At the same time there are user level
controls and privacy and safety of data is also
ensured.
In the MIS the following are some of the
reports:
Ø
Demand
collection balance statements Account wise, Village wise, Branch
Wise
Ø
Account
wise demand
Ø
Delinquency
Ø
Portfolio
at Risk Analysis including Aging
analysis.
Ø
Cash
management
Ø
Financial
statements.
Ø
Fund wise utilization
statements.
Ø
Purpose wise
utilization
Internal control, Internal / External
Audit and Supervision
system:
Each staff member has a written chart of
duties in addition to the regular practices.
This is a system of supervising staff,
management staff, accounting and auditing staff.
Each level of staff has a clear roles and
responsibilities and there a written manual for
the job
charts.
The Thrift Organiser is the basic filed
level worker who is supervised by the Field
Officer and by the Unit Managers. The Unit
Managers are to report to the C.E.O. The
C.E.O. has to report to the board of directors
from time to time.
In addition to this there was regular
meetings viz., weekly/monthly for the monitoring
supervising of the
activities.
The Resident officer is the full time
internal auditor of the society. The RO has to
do the audit of all primary documents including
Member Pass books
periodically.
External Audit is conducted by the
charted accountant, who is examining all the
necessary documents for the audit at least ones
in a year.
Portfolio Management System / Loan
Tracking / Loan Appraisal / Follow
up:
The portfolio Management/ Loan Tracking
is monitored by the Credit Officers. The
Computerized system can generate the periodical
reports with all details of loan account
wise.
With the help of these reports, the COs
and TO track the bad loans and take necessary
steps for regular recovery of the
loan.
Loan Appraisal is the key area, where the
village Loan Committees will work for the
society (VLC). The VLC are forms with key group
leaders of the village. The Credit Officer will
act as Member Convener of the VLC. The VLC
is the authority for the loan appraisal of the
loan and which recommends the loan application
to the Unit managers. The Credit Officer
Coordinates the VLC and provides necessary
information in the process. The Unit Managers
can sanction based on the recommendations of the
VLC and viability of the project/purpose and
intimate the same to Head Office before
disbursement as control
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