LOANS & ADVANCES

CHAPTER I
1.1 INTRODUCTION:-
The commercial Grameen Financial Services accept deposits and also
lend money to the people who require it for various purposes. Lending of funds
to individuals traders, Businessmen and Industrial enterprises are one of the
important activities of commercial Grameen Financial Services. The maor part
of !eposits received "y Grameen Financial Services is lent out, and a large part
of their income is earned from interest on such lending. There is a considera"le
difference "etween the rate of interest which commercial Grameen Financial
Services grants on deposits, and the rate they charge on loans # advances. It is
this difference which constitutes the main sources of Grameen Financial
Services earning. $peration and e%pansion of "usiness and commercial
activities depend a great deal on the availa"le of loans&advances from
commercial Grameen Financial Services.
MEANING OF LOANS AND ADVANCES:
he term 'Loan( refers to the amount "orrowed "y one person from
another. The amount is in the nature of loan and refers to the sum paid to the
"orrower. Thus from from the view point of "orrower, it is '"orrowing( and
from the view point of Grameen Financial Services, it is 'lending(. Loan may
"e regarded as credit granted where the money is dis"ursed and its recovery is
made on a latter date. It is a de"t for the "orrowed. )hile granting loans, credit
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LOANS & ADVANCES
is given for a predetermined period. Interest is charged on the loan at agreed
rate and interval of payment. '*dvance( on the other hand, is a credit facility
granted "y the Grameen Financial Services. Grameen Financial Services grant
advance largely for short+term purposes, such as purchase of goods traders in
hand meeting other short+term trading lia"ilities.

There is a sense of de"t in loan, whereas an advance is a facility "eing
availed of "y the "orrower. ,owever, li-e loans advances are also to "e repaid.
Thus a credit facility in installments over a period is termed as loan while a
credit facility repaya"le within one year may "e -nown as advances.
Finance plays a very important role in your economy. It is the "asically
-ey to all human activities or it is the study of money or cash. *nd also it is the
set of inter related activities or services wor-ing together to achieve some goals
and o"ective. It includes different types of mar-ets, the institution instruments,
services and the generation of ideas from various souses.
Finance provides services not only in the place of capital mar-et, "ut
also in money mar-et. Financial intermediaries play a very important role in
the saving investment process.
Grameen Financial Services .vt. Ltd. also provides finance for the
development of trade, commerce and industry. They mo"ili/e the saving of the
people and utili/e them for productive purposes. 0ven though there has "een a
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LOANS & ADVANCES
spectacular and rapid development in the operations in the Grameen Financial
Servicesing system has "een witnessed in the nationali/ed period.
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LOANS & ADVANCES
1.2 OBJECTIVES OF THE STUDY:-
The o"ectives of the study are
To study the monitoring methods followed "y the Grameen Financial
Services.
To study a"out the ris- involved in Grameen Financial Services.
To study the financial services provided "y the Grameen Financial
Services.
To study different types of loans provides "y the Grameen Financial
Services.
To study the nature securities provided for loans.
To carryout in depth the analysis on the loan land advances of the
1G2*3004 FI4*45I*L S026I50S .6T. LT!.7
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LOANS & ADVANCES
1.3 SCOPE OF THE STUDY:-
4ow this generation finance is the "lood of "usiness without finance we
can(t run any organi/ation. ,ow to "arrow, when "arrow # how to utili/e the
money. Some practical ideas or -nowledge are requiring. *s the same Loans #
*dvances is the very vital role in any organi/ation # as well as any firm.
The Grameen Financial Services always guidelines in the crucial
lending decision, to provide loans or to accept the deposits. The policy lays
down the rules and regulation that guides in sanctioning of loans and also
monitoring and managing of the entire sector. This also needs to "e
contemporary so as to suit the charging leading environment.
This study serves as a frame wor- for understanding the policy and
terms of Grameen Financial Services .vt. Ltd..
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LOANS & ADVANCES
1.4 LIMITATIONS OF THE STUDY:-
$nly three cases were reviewed. *s time was the maor constraint in
underta-ing study for more units.
The proected financial statements are merely action plan for the future.
,ow will they are put in to action depends upon the Grameen Financial
Services managerial competence.
3ost of information was not made availa"le due to its confidential
nature when "orrowers did not give required data.
The structure of credit ris- management is very long only structured
aspect was analy/ed.
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LOANS & ADVANCES
1.5 RESEARCH METHODOLOGY:-
The study assumes great significance "ecause it has an impact on all the
activities of the Grameen Financial Services. It touches on all the Grameen
Financial Servicesing functions. *nd it also assumes a great contri"ution
"ecause of the fact the Grameen Financial Services requires certain strategic
inputs to "oost not only in the place of function "ut also the service factor.
SOURSES FOR DATA COLLECTION:-
The data to achieve the o"ectives of the study found their reaction from
primary and secondary sources.
PRIMARY DATA:-
The primary data was collected from the survey of 899 respondents #
"y interviewing the manager # different level of employees in Grameen
Financial Services .vt. Ltd..
SECONDARY DATA:-
The data collected from the relevant acts from the secondary sources of
the data.
In the sampling method the data are collected from selecting few
individuals of the population, in any statistical investigation here the term
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LOANS & ADVANCES
population means the set of all the units that come under and statistical
investigation.
SAMPLING:-
The term sample means a few reprehensive units that are selected at
random from the population. ,ence a sample is representative part of the
population. The process of selecting the from the population is called sampling
method.
RAMDOM SAMPLING:-
If the si/e of the population is very large lottery method "ecomes very
tedious alternatives method of random num"ers. ,ere all the units of the
population are given num"ers serially. Then a random ta"le of random num"ers
is selected. The num"ers appearing in that ta"le are read. The units "earing
these num"ers are included in the sample. *s it is important for the Grameen
Financial Services to improve its performance.
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LOANS & ADVANCES
1.5 CHAPTER SCHEME:-
Finally proect report has "een su"mitted as per following chapter
scheme.
I. The F!"# C$%&#'! contain introduction to the study, o"ective of
the study, Scope of the study, 2esearch methodology, Limitations
of the study and the chapter scheme.
II. The S'()*+ C$%&#'! contains of theoretical "ac-ground
III. The T$!+ C$%&#'! contains Grameen Financial Services profile
of the
Grameen Financial Services .vt. Ltd..
I6. The F),!#$ C$%&#'! consists of analysis of interpretation of the
data.
6. The F-#$ C$%&#'! contains findings, Suggestions and
conclusion.
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LOANS & ADVANCES
CHAPTER - II
THEORETICAL BAC.GROUND
Grameen Financial Services is defined as acceptance of deposited of
money from pu"lic for the purpose of lending or investment. Grameen
Financial Services are institution which also leads money to individuals, for
their own purpose it may "e "usiness and government as well. This process of
lending to the individuals is called as loans.
INTRIDUCTION TO LOANS / ADVANCES:-
!evelopment Grameen Financial Services and commercial Grameen
Financial Services play a significant role in this mar-et "y supplying long term
loans to corporate long term to corporate customer. Long term loans mar-ets
may further "e classified into:
Term Loans
3ortgages
T'!0 L)%*":-
In India, many industrial financing institutions have "een created "y the
government "oth at levels to supply long term and medium term loans to
corporate customer directly as well as indirectly. They also help in identifying
investment opportunity, new entrepreneurs and support moderni/ation efforts.
M)!#1%1'":-
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LOANS & ADVANCES
The mortgages mar-et refers those centers which supply mortgage loan
mainly to individual customer. * mortgage loan is a against the security of
immova"le property to secure a loan is called mortgage.
C!'+# P)2(3:-
These are need for the do functioning of the loan proposals. Instead the
credit policy is the guide line for the decision ma-ing to ena"le them to screen
out loan proposals, which can "e sanctioned without any reference to the top
management.
The first step in framing a credit policy in the formulation of o"ectives
of the proposed policy, with diverse o"ectives li-e profita"ility, liquidity,
volume of "usiness, ris- factors etc The policy should specify the targeted
composition of the loan port folio.
It is the possi"ility of losses associated with the failure of repayment of
principal amount and interest amount "y the "orrower.
In Grameen Financial Services portfolio, to ina"ility or willingness of a
"orrower or counter party to meet commitments relating to lending, trading
settlement and other financial transactions the party with whom the Grameen
Financial Services has esta"lished the relation "asically outline these ris-s.
0%: + .rincipal default, Interest defaults.
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LOANS & ADVANCES
1. HOUSING LOAN:-
*ny individual can avail Grameen Financial Services .vt. Ltd. ,ousing
loan for any of the following purpose:
For construction of house
For purchase of house&Flat
For purchase of house&Flat from the original allotted i.e. on first power
of attorney "asis
For carrying out repairs&2enovation&*dditions&*lterations in the
e%isting house.
Loans given for repairs to the damaged dwelling units of families up to
2s. 8 Lac in rural and semi+ur"an areas and up to 2s. ; Lac in ur"an and
metropolitan areas.
*ssistance given to a non+governmental agency approved "y the 4,B
for the purpose construction& 2econstruction of dwelling units or for
slum clearance of 2s. < Lac per dwelling unit.
*ppro%imately =9 percent of the cost of proect is sanctioned "y
Grameen Financial Services .vt. Ltd. ,ousing Finance, su"ect to a ma%imum
of 2s. <9 Lac. In case of carrying out repairs& 2enovation & *ddition alterations
in the e%isting house, the ceiling is 2s. < Lac. The loan is
*vaila"le for a period of < years to ;9 years or the "orrower attain the age of
><.
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LOANS & ADVANCES
Interest of Grameen Financial Services .vt. Ltd. home loan is charged
on reducing "alance and the amount to "e sanctioned depends upon repaying
capa"ility of the "orrower.
T$' -)22)4*1 "'(,!#'" %!' !'5,!'+ 63 #$' ('22 )- G!%0''* F*%*(%2
S'!7('" P7#. L#+. H),"*1 L)%*:
3ortgages of property for which finance is "eing given
In case of purchase of house flat from housing "oard&society where
mortgages cannot "e immediately, a tripartite agreement shall "e
e%ecuted among the housing "oard&society, "orrower and the Grameen
Financial Services.
In case of purchase of house&flat on first power of attorney, additional
security "y way of mortgages of some other property or pledge of
Grameen Financial Services fi%ed receipt &LI5 .olicy& Govt. Security
has to "e provided. Suita"le third party guarantee accepta"le to the
Grameen Financial Services which may include guarantee from family
mem"ers & others relatives.
2. EDUCATION LOANS:-
Loans for students purchase higher education or studies in India or
a"road. 3a%imum amount is 2s. 89 la-hs for studies a"road up to ;9 La-hs is
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LOANS & ADVANCES
8;? of rate interest per annum and a"ove 2s. @ la-hs in 8;?. The repayments
are < to A completion of course.
0ducational loans granted to individuals for education purposes up to
2s. 89 la-h for studies in India and 2s. ;9 La-hs for studies a"road.
Loans granted to institutions will not "e classified as priority sector
advance.
Loans granted "y schedule B5Bs to 4B5s for on+lending to individuals
for educational purposes up to 2s. 89 la-h for studies a"road.
3. VEHICLE LOANS:-
Loans for purchase of four wheelers, light and heavy permanent
employees of state& central& .rofessional& Self employed agriculturist etc the
loan amount is C> times net monthly income for salaried and C times net
vehicles up to 8; la-hs and the repayment for new vehicles A< months.
4. PERSONAL PERSONS:-
Loans for general purpose to individuals Loan amount is ma%imum 2s.
<9 la-hs and rate of interest is 8<? per annum and repayment period is C>
months.
PERSONAL LOAN AGAISNT E8UITABLE MORTGAGE OF
IMMOVABLE PROPERTY:-
It is for the individuals who are employee, professionals, *gricultures,
Self+employed etc. )ho is income ta% assesses. The loan amount is minimum
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LOANS & ADVANCES
9.9<9 Lac-s and ma%imum C9 Lac-s. The repayment period is =@ month. The
rate interest is 8<?.
THE LOANS AND ADVANCES INVOLVES VARIOUS
COMPONENTS:-
1. OBJECTIVES:
The first step in framing loan proposals is the formulation of o"ectives
of proposed loans, with diverse o"ectives li-e profita"ility, liquidity, volume
of "usiness, ris- factors etc.
2. VOLUME AND MI9 LOANS:
The policy should specify targeted of loan portfolio, such compensation
"eing in terms of industry&location&si/e&interest rate&security.
3. GEOGRAPHICAL SPREAD:
There will "e various locations from where a Grameen Financial
Services conduct its operation of there location some may "e wea- demand
areas with a considera"le high deposit potential.
4. LOAN EVALUATION PROCEDURES:
0valuation involves a careful selection of "orrower "y understanding
their loans repayments with interest. This can "e done "y assuring the a"ility of
the client to pay "ac- the and also willingness to repay the loan.
RIS. INVOLVED IN GRAMEEN FINANCIAL SERVICESING:-
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LOANS & ADVANCES
To provide timely, accurate a relevant information to the Grameen
Financial Services and financial institution to improve their functionality and
most importantly, reduce the incidence of non payment accounts&4on
performing assets D4.*E
2is- is profita"ility of loss on account of,
,appening of an une%pected event or
4on+happening of an event
0very activity is prone to ris-. 3ore so commercial activities are more
prone to ris-. The ris- management is there in every organi/ation, even in
Grameen Financial Servicesing Industry. It is there ever since the activity has
emerged ,owever, the Grameen Financial Services were focusing ris- in only
one direction: miscreants steal cash and valua"les from the Grameen Financial
Services and natural calamities may cause losses. But the Grameen Financial
Servicesing activity has undergone multi+dimensional changes such as
technology, treasury operations, investment Grameen Financial Servicesing,
capital mar-et operation, outsourcing of value "ased activities, international
Grameen Financial Servicesing, unsecured lending etc. and the ris- perceptions
in the Grameen Financial Services have not undergone the desired focus and
viewed as perception "ut should "e ta-en as serious pro"lem. The Grameen
Financial Servicesing industry is industry is "asically e%posed to ris- that arise
from the e%ternal as well as internal factorsF
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LOANS & ADVANCES
E9TERNAL FACTORS:-
3iscreants
Borrowers
5apital
Government policies
5ounter parties
INTERNAL FACTORS:-
o Technology
o Inadequate 5apital
o Lac- of Internal 5ontrol 3easure
o System wea-ness and Failure
o Lac- of planning and pro activity
o )ea-ness and Failure of personnel
THE VARIOUS RIS.S IN GRAMEEN FINANCIAL SERVICESING
ARE AS FOLLO:S:
MAR.ET RIS.:
3ar-et ris-s are the ris-s that affect adversely the value of on of off
"alance sheet positions "y movements in equity and interest mar-ets, 5urrency
e%change rates and stoc- and commodity prices.
E;: Interest rate ris-, policy change ris-.
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LOANS & ADVANCES
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LOANS & ADVANCES
OPERATIONAL RIS.:
To ris- of loss resulting from inadequate or failed internal processes,
.eople and systems are from e%ternal events.
E;: Fraud, system failures, human errors
CREDIT RIS.S:
It is the possi"ility of losses associated with the failure of repayment of
principal amount and interest amount "y the "orrower. In Grameen Financial
Services portfolio, losses stem outright default due to ina"ility or willingness of
a "orrower or counter party to meet commitments relating to lending, trading
settlement and other financial transactions. The party with whom the Grameen
Financial Services has already esta"lished the relations "asically outlines these
ris-s.
Though these ris-s can "e attri"uted to e%ternal process of dealing with
of credit i.e., either the principal or the interest amount.
E;: .rincipal defaults, interest defaults.
COMMON CREDIT PROBLEMS
I. L%(< )- )! % +'-('*# (!'+# (,2#,!': In such a situation, loans
would "e made without application of sound "asic credit criteria or
e%cessive emphasis on earning iGn difficult mar-ets going down+tier
or pressing for mar-et share.
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LOANS & ADVANCES
II. L%!1' 6)!!)4'!"= to which Grameen Financial Services have large
e%posures that encounter serious difficulties or "ecome marginal for
one reason or another.
III. M)+'!%#'-">' 6)!!)4'!"= when hog chun-s of "orrowing are
involved that increases "orrower leverage significantly.
I6. S0%22 )*'-4%3 ),# 6)!!)4'!"= overleveraged from the start, and
using Grameen Financial Services money as equity.
6. .oorly policed asset growth or repayment dependent on continued
economic and profit growth.
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LOANS & ADVANCES
THE CREDIT RIS.S CAN BE MITIGATED BY DEVELOPING:
5redit policy
5redit rating of the "orrower
*dherent of stringent asset classification and recognition measures
2ecovery policy
.rudential e%posure norms
Industry wise e%posure norms
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LOANS & ADVANCES
CHAPTER III
COMPANY PROFILE
Grameen Hoota DGHE, the microfinance programme of the T
3uniswamappa Trust, was headquartered on the outs-irts of Bangalore, in
India. The Trust had other activities such as education and solid waste
management. )ithin the Trust, microfinance was a maor activity with
e%clusive staff. GH had a 8C+mem"er Governing Board that was, in the legal
sense, 'informal.( The fifth annual general meeting of this Board met on A
th
*ugust ;99@, and reviewed past performance D0%hi"it 8E. The 50$, 6inatha
3. 2eddy, then presented the plan for the ne%t five years. D0%hi"it ;E. There
was momentary silence.
F*%*(%2 S'!7('" -)! #$' R,!%2 P))! * I*+%
!espite several decades of state+directed intervention, huge gaps
remained in the supply of financial services for the poor in India. In ;99C, some
<G? of the entire rural population had no deposit account, and AG? had no
credit account with the formal financial sector Daccording to a 2ural Finance
*ccess Survey of the )orld Ban-E. For very small farmers the percentages
were A9? and =A?, for deposit and credit accounts respectively. Similarly,
there was a large gap in remittance services for the poor. Insurance penetration
was also relatively low.
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LOANS & ADVANCES
$ver the three decades ending in 8GG9, a huge "an-ing networ- had
"een "uilt in India. 5ommercial "an-s, cooperative "an-s, and 2egional 2ural
Ban-s had "etween them over 899,999 "ranches. !irected lending "uilt loan
portfolios in the agricultural and other 'priority( sectors, "ut at the e%pense of
quality. The "an-ing sector "egan cleaning up its act after the Indian economy
'opened( in the early nineties. In 8GGG, the non+performing assets of the so+
called 'priority( sector advances Ddominated "y agricultureE were a"out 89?
higher than that of the non+priority sector Dwhich itself was 8<?E. *gricultural
growth in the nineties was less than half the annual overall G!. growth of over
>?. The share of rural credit Din overall creditE fell from a pea- of 8<? in 8GG8
to 89? "y ;99C.
,owever, the ina"ility of mainstream "an-s to reach the poor provided
space for new organisations. The dominant form was the self+help group
DS,GE. 4umerous S,Gs were esta"lished "y not+for+profit organisations and
Dless oftenE "y "an-s. * typical S,G was a group of 8< to ;9 mem"ers Dusually
womenE. 0ach S,G functioned as a micro "an-, with savings and loans
accounted for in the "oo-s of the S,G. *n S,G could lin- to a mainstream
"an- and "orrow. There were also a few new microfinance institutions D3FIsE
that imitated the Grameen model Dpioneered "y Grameen Ban-, BangladeshE.
The regulatory framewor- made it difficult for 3FIs to operate. *
formal "an-, that could provide a wide range of financial services, required a
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LOANS & ADVANCES
minimum equity capital of 2s ; "illion. * 4on+Ban-ing Finance 5ompany
D4BF5E required a minimum equity capital of 2s ;9 million. Such an 4BF5
could lend "ut not accept deposits until it had "een operational for several years
and o"tained a credit rating. The Indian central "an-, the 2eserve Ban- of India
D2BIE, had signalled that it intends to move to a regime in which no 4BF5
would "e allowed to raise deposits. The 5ooperative Societies *ct Dat the state+
levelE was, in general, user unfriendly, vesting as it did significant control with
the State. * version of the act Dthe 3utually *ided 5ooperative Societies *ctE
was somewhat friendlier. In the few years ending ;99@, there were some
spectacular failures of relatively large cooperative "an-s. * very small "an-
could function as a 'trust(. Such a "an- operated in a grey area of legislation, as
the legality of a trust raising deposits and lending was unclear. * "an- would
find it difficult to operate at a large scale as a trust. There were a few larger
3FIs that used a com"ination of organi/ation forms. $ne e%ample was to use
3utual Beneficial Trusts D3BTsE to raise deposits from clientsF these funds
were then lent to an 4BF5 that, in turn, lent to clients. *n 3BT was not a
pu"lic charita"le trust Dthe usual form of trustsE "ut a private trust with a settler
Dusually an employee of the 3FIE.
The state of Harnata-a, where GH operated, did have its own share of
the poor, with over three+and+a+half million households "elow the poverty line.
This was the state that pioneered the concept of S,Gs. ,owever, even in ;99@,
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LOANS & ADVANCES
apart from GH there was only one other Grameen Ban- replicator in
Harnata-a.
I* #$' B'1***1
6inatha 2eddy had this to say a"out GH(s conception, 1I trained to "e a
3ontessori teacher, and eventually I moved "ac- into *valahalli village, close
to Bangalore, to which I "elong. *round the year 8GG<, my grandmother set up
a trust in this village and my sister and I "oth thought that we should open a
school for the village children and people from the locality. Sometime later, I
read *le% 5ount(s "oo- Give Bs 5redit. I found it very, very moving, and was
so inspired that I wrote to the author, and said, 'please give me some more
information(. *fter a couple of months I got a letter from .rof. Iunus Dfounder
of Grameen Ban-, BangladeshE himself, and I couldn(t "elieve it. ,e said that
he was delighted to -now that I was interested in the wor- of Grameen Ban-,
and he gave me the addresses of two Grameen replicators in India, 'Share
3icrofin( and '*S*(, and he also invited me to their !ialogue .rogramme.
1I visited S,*20 Din ,ydera"adE and met with Bdaia Humar, he gave
me a whole lot of literature. Then I too- a train to Trichy, and visited *S*.
This was "efore going to Bangladesh for the !ialogue .rogramme, and I came
to -now that Bdaia was coming for the same !ialogue .rogramme as a
resource person, so again I met him there and spent a lot of time. ,e gave me a
lot of tips and ideas and mentoring at those meetings, we had in !ha-a.
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LOANS & ADVANCES
1*fter that I -ept in correspondence. I used to -eep writing letters, and
the Grameen Trust as-ed me to apply to 2BI J all those things were going on.
*nd in 3arch 8GGG I got a letter saying that they have approved the Seed
5apital Funding of BS KC<,999 . Then in *pril of that year school closed in the
first wee-, and I was free to go a"out hiring staff. I had a"out 89 or 88
applications, and finally hired Suresh Dcurrently the 5$$E. Suresh has a
master(s in sociology and a postgraduate diploma in computers.
Suresh recollected, 1I didn(t actually thin- of micro+credit or anything, I
had something else in my mind, "ecause earlier to this I was also doing various
other thingsLI was running my own small enterprises unsuccessfullyM But then
also I did have a little "it of e%posure to development. But when I met 3rs
6inatha, after that it was a different thing. She tal-ed a"out Grameen Ban- and
all that, and some of the things that she said at that time a"out rural poverty
triggered something, and I agreed to oin her.7
6inatha 2eddy continued, 1I thin- the initial staff hiring is critical, I
-now of another 3FI where that went wrong. I rang up Bdaia. ,e said, 'never
ever appoint ust one person. Iou should always ta-e in twos "ecause you will
"e spending so much time with them, and if that one person leaves then you are
"ac- to square one(. ,e was conducting an 3FI wor-shop for three days in
S,*20, so he said, '"y tomorrow evening, you hire that other person also and
put them "oth on the "us to ,ydera"ad, let them attend this wor-shop(. So I
ust had ;@ hours to get the other person. I called up a family friend and told
26
LOANS & ADVANCES
him, 'see I am on the loo-out for some"ody who has a B.5om "ac-ground, can
you figure out if you have any"odyN( So he said, '*mma, why don(t you ta-e
my nephew(. ,is nephew is Gopal, Dnow an *rea 3anagerE.
1)ith these two in place, we hired a couple of more unior staff and
started microfinance activity in two places simultaneously, *valahalli itself,
and in Hareyenahalli a"out C9 -ms away on Hana-apura road. In *valahalli we
had the advantage, "ecause every"ody -new the school the Trust ran.
Hareyenahalli was completely new to us.7
*ccording to Suresh, Hareyanahalli gave GH strength. The challenges
faced there are those that recurred in other villages. 1.eople were hesitantF they
didn(t -now who we were.7 But once GH had wor-ed in two villages their
confidence level had gone up and a master plan was prepared. The Grameen
Trust money effectively supported the first year of operations.
Initially *valahalli was effectively the ,ead $ffice and the "ranch. In
!ecem"er ;999, the first "ranch was opened in Hana-pura headed "y Gopal,
and another "ranch started in Haggalipura "y 3arch ;998. Suresh recalled that
"y then, GH -new how many "ranches would "e opened in the ne%t five years.
Suresh felt that their confidence in scaling+up came after their fourth "ranch
had opened. 1$ur third "ranch came up with more capacity at one go. Li-e, we
had full+fledged staff, all the infrastructure, right from day one of the "ranchF
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LOANS & ADVANCES
including vehiclesF operation manualsF trained staff. Before that we also started
the training of the staff. )e had our training wingF we had developed a training
manualF we have a one+month long training course. So once we did that, the
fourth and fifth "ranches came up very quic-ly. 0ven now, for us to open a
"ranch anywhere is easy J within one month the "ranch would "e operational.7
T$' C,!!'*# S#!,(#,!' %*+ O&'!%#)*"
The organisation structure of GH is in 0%hi"it C. In addition to the 50$
and 5$$, there were two *rea 3anager positions Done yet to "e filledE and a
.rogramme $fficer Dresponsi"le for "ranch computerisationE. Branch 3anagers
headed individual "ranches, supported "y Field $fficers. *t the ,ead $ffice in
*valahalli, ,ari !arshini, an electronics engineer from 2egional 0ngineering
5ollege, )arangal, loo-ed after planning and monitoring. 3anorama loo-ed
after the insurance requirements of GH and also conducted insurance
wor-shops for the mem"ers of GH. 4ityanand, with a masters in commerce,
was 3anager in the finance department. GH hired a graduate from the Institute
of 2ural 3anagement, *nand who oined in 3ay ;99@ and left in after a few
months. GH also invested time on accounting systems. 3+52IL Da rating
agencyE commented in ;99C that the accounting system was good.
GH was a Grameen replicator, with field staff located at "ranches and
clients organi/ed into Hendras DcentresE each consisting of >+= groups of <
women.
28
LOANS & ADVANCES
G. B!%*($ O&'!%#)*"
0ach *rea 3anager was in charge of si% "ranches. These "ranches also
had Branch 3anagers or *ssistant Branch 3anagers in addition to four Hendra
3anagers DH3sE and a peon+cum+coo-. The *rea 3anager visited each "ranch
at least once in 89 days or whenever necessary.
The "ranch offices were office+cum+residences. GH also employed a
coo- at each "ranch and provided necessary furniture including -itchen
utensils, "eds etc for its employees. *ll the H3s were provided with ;+
wheelers.
T3&(%223 % G. 6!%*($ -,*(#)*'+ %" -)22)4":
O Hendra meetings were conducted early in the morning Dsome may "e
conducted in the evenings from @.99 pm onwardsE to accommodate
wor-ing women. The H3 went to the meeting with a collection sheet to
record the details of repayments and savings of the Hendra mem"ers.
GH loan application and dis"ursement forms were also ta-en. * Hendra
leader and secretary were selected from the mem"ers to assist the H3 in
collection of savings, maintaining pass"oo-s, etc. *ll Hendra meetings
followed a fi%ed schedule Dpledge, attendance, collection of savings and
loan repayments, loan applications, loan dis"ursements etcE.
O 0ach Hendra meeting usually went on for an hour. * H3 conducted
;+C Hendra meetings in the morning. GH did not follow all
29
LOANS & ADVANCES
Grameen practices, "ut was very similar in operation to S,*20.
GH dropped the saluting and callisthenics, used "y Grameen. 4or
did GH require mem"ers to come to a "ranch for a loan.
O *fter the Hendra meetings were conducted, the H3 returned to the "ranch
and the cash collected for the day was handed over to the cashier.
!is"ursements for the ne%t day were estimated and any "alance cash
was deposited in a "an- the same day. *ll the registers and records
pertaining to a particular Hendra were updated on the same day after the
Hendra meeting. Training for new groups was usually conducted in the
evenings.
O Two of the H3s in each "ranch too- the responsi"ility of 5ashier and
*ccountant respectively for a period of C months each.
0ach GH "ranch maintained a num"er of records DGeneral Ledger and
!ay Boo-, dis"ursement register, etc.E. The mem"ers were issued pass"oo-s
that are updated during the Hendra meetings.
Branch 3angers were paid a monthly salary ranging "etween 2s. C999
and 2s. <,999, while H3s were paid around 2s. ;,999. H3s were also entitled
to an incentive lin-ed to the num"er of groups formed in a month D2s ;<9 for
the first, stepped up "y 2s <9 for each additional groupF with an additional
incentive of 2s. 899 if the group was very poorE. Staff are typically male with a
pre+university Dhigher secondaryE educational qualification.
30
LOANS & ADVANCES
T$' G. G!),&"
T$' 1!),&" -,*(#)*'+ %" -)22)4":
O *fter the GH opened a "ranch in a talu-, it was the responsi"ility of the
*rea &Branch 3anagers and H3s to identify the groups and form
Hendras. This was done "y underta-ing village surveys. The villages
were usually located within a radius of ;9 -ms. from the "ranch. $nce a
particular village was selected, ;+C informal meetings were conducted
with some people from the village. Then a formal meeting Dcalled a
proection meetingE was conducted where everyone in the village was
invited and the procedures of GH and the rules and regulations were
e%plained.
O !uring su"sequent visits "asic information was collected from interested
women, who had formed groups of five. This was done in a prescri"ed
format. ,us"ands and elders in the mem"ers( families were also
informed a"out the GH procedures, group responsi"ility etc. The GH
focus was on the very poor.
O 5ompulsory Group Training D5GTE was conducted for ;+C groups at a
time for a period of one wee-. *fter the 5GT, a Group 2ecognition Test
DG2TE was conducted "y the *3.
O Si% to eight groups were formed into a Hendra and Hendra meetings were
held as per mutually agreed time and place.
31
LOANS & ADVANCES
* summary of the steps involved in Hendra & group formation and
su"sequent follow+up is given "elow:
6inatha "elieves that a GH employee needed, 1to "e really committed.
*nd then I thin- he needs to "e having a lot of patience and constancy in that
commitment J he cannot "e committed and inspired for si% months and then
lose that. *nd I thin- we have to ta-e good and fair decisions at all times. I
thin- that was one of the main things in Grameen Hoota J we have always
ta-en the right decisions. Ies, I thin- we have very good values here in
Grameen Hoota. *nd, I thin- the staff also, the teamwor- and staff are very
important. Building up a relationship with them is very important.7 Suresh
added, 1)e need to practice what we preach. Li-e, when we say that we have
to start the meeting at A o(cloc- in the morning, we need to "e there at A.99. If
we were not doing that, then our staff would not have im"i"ed that at all.7
6inatha continued, 1)e have terminated the services of ust three
employees over the last few years. $ne was drun- in the "ranch, and he too-
our new vehicle and had an accident. In the other case, there was some fraud in
32
LOANS & ADVANCES
the "ranch. Till today, we don(t -now whether he has committed it, "ut he was
responsi"le for some mess up over there. The amount of money was nothing
muchLwe can(t call it a fraud, "ut "asically he was not a"le to ustify what he
did, and also he started lying to cover that up. So that is what we didn(t li-e.
*nd he was a mem"er(s son also, "ut still we terminated him.7
1)e have always "een very strict, and when it comes to dealing with
mem"ers, discipline is very important. )e have "een very, very strict on that.
If their "ehaviourL"ecause we wor- mostly with women, and we also -now
that if those core values are not carried "y any of our people, then it is not to
our advantage,7 said Suresh.
The Grameen model required significant interface "etween the mem"ers
and GH staff. Suresh said, 1That is one thing we have "een very clear a"out,
right from day oneF we never too- the decisions pertaining to the Hendra. )e
always facilitated discussions with them, "ut whatever the decision was, it was
the -rndras. )e never imposed any decision on them J even for the loans,
whether to issue or not to issue, neither of us has any control over that.7
F*%*(%2 S'!7('"
GH provided a num"er of loan and savings products Dsee 0%hi"it @E.
There was also a loan+lin-ed insurance product, the 0mergency Fund. In case a
mem"er died, this fund was used to "oth settle the loan and cover funeral
e%penses.
33
LOANS & ADVANCES
*s GH "egan providing financial services it did face pro"lems from
moneylenders. In addition, one formal competititor, the State government
supported Stree+Sha-ti launched an official complaint against GH. There were
GH mem"ers who simultaneously also "elonged the Shree+Sha-ti groups.
1Initially we were a little apprehensive,7 said 6inatha, 1and we were trying to
weed out those who are already in Stree+Sha-ti, and then we reali/ed that we
shouldn(t "e doing that.7
)hen as-ed a"out client dropout, GH clarified that there could "e
individual or group drop+outs for range of reasons P migration of the client,
family disputes, misunderstanding within the group, and difficulty in finding a
fifth mem"er so that the group "ecomes ineligi"le for a loan. *n entire Hendra
may dropout happens if, for the reasons cited earlier, the num"er of mem"ers in
a Hendra drops to less than ten.
F,*+*1
0%hi"it < contains recent sources of funding. )ith growth came the hunt
for funds. 6inatha recollected, 1The 0conomic Times carried an article saying
that ,!F5 D,ousing !evelopment and Finance 5orporationE was funding
4G$+3FIs. The first loan that we got from a commercial "an- was so easy J
three la-hs they gave so easily and within 8< days, and they also gave toilet
loans. )e e%hausted that money, and then again we applied to them for ;9
la-hs. *t that time it too- a little longer, and then 3r. 4agendra said, 'you have
34
LOANS & ADVANCES
to give security(. *nd even though we were so naQve, and it was the "eginning,
I don(t -now how we had enough sense to tell him, '$H, today for ;9 la-hs we
will give security, "ut tomorrow we will as- for <9 la-hs, then what security
will we giveN7 *nd he "ought that argument, and he gave us the ne%t ;9 la-hs
also. *fter that then we got a Grameen Trust scaling up fund, and Friends of
)omen(s )orld Ban-ing DF))BE, which was relatively easy. But there was a
terri"le fund+crunch for almost one year. * couple of "an-s were terri"ly slow
and the e%perience was traumatic.7 Su"sequently, GH raised funding from a
num"er of sources.
GH had more recently has had 2s. C9 million approved under the I5I5I
.artnership model. Bnder this model, money for on+lending to clients at GH
interest rates would "e made availa"le "y I5I5 at interest rates of G? to 89?
per annum. )hile GH was responsi"le for microfinancial services li-e
identifying clients, dis"ursing loans and collecting repaymentsF the client loan
portfolio formally remained on I5I5I(s "oo-s.
P'!-)!0%*('
Financial statements are in 0%hi"it >. Branch+wise performance is in
0%hi"it A. The portfolio+at+ris- D.*2
C9
E of GH was /ero in ;99C and ;99@.
*ccording to the report prepared "y 3+52IL, a staff mem"er, in the average
Grameen replicator in India Din ;99CE, served 8@@ clients and managed a loan
portfolio of a"out 2s.9.<9 million. Such an average Grameen replicator earned
35
LOANS & ADVANCES
a yield of C<.>? on the loan portfolio, had an operational self sufficiency ratio
of 89C? and a financial self+sufficiency ratio of G8?, and had a .*2
>9
of ;.>?
Dthis for all Indian 3FIs was 88.;?E.
6inatha had this to say a"out the first maor loan related pro"lem GH
faced. 1*ctually one of our good mem"ers, "elonging to our first Hendra, she
was the secretary of that Hendra J she ran away. *nd that really hit us hard, she
eloped with someone, and her hus"and was so hurt a"out that, that he
committed suicideF left "ehind two children J it was very, very traumatic. )e
didn(t -now how to handle it. .eople started saying that her hus"and was going
to repay. )hen he passed away, they said, 'you should write it off(. But it was
a very dicey situation for us. )e had a default for quite some time for a"out 89
wee-s. In those 89 wee-s, we got the repayments for @+< wee- from the
mem"ers+ who pooled in.
1But "y that time, I had "een to 5ashpor Financial and Technical
Services, and that was a very good learning, they have what is called as
collective responsi"ility. *nd I pic-ed it up from there, and we used 52F
D5ollective 2esponsi"ility Fund+"uilt out of a small contri"ution made "y all
mem"ersE here. That solved the whole pro"lem. *nd slowly over a period of
the ne%t si% months, we eventually got "ac- the whole repayment. 0ventually
that mem"er came "ac- and repaid her entire loan. It was a great learning for
us. That group and that Hendra are still there with us.7
36
LOANS & ADVANCES
T$' F,#,!'
$n the su"ect of how GH would cope with the future, 6inatha was
clear, 1 I thin- we are loo-ing at more and more professionals coming in
"ecause what we have done in these five years is all learning and doingF
learning and doing. But now we have reached the stage where our s-ills are not
sufficient to ta-e it to the ne%t phase of growth. )e have only limited s-ills J
after all, we are not trained in finance or accounts or economics or anything.
)e have "rought it up to this stage, "ut we are loo-ing at a"sor"ing
professionals, who will ta-e it to the ne%t stage. * worry is the legal status we
are going to go into. 4ow if you are going into an 4BF5 where you have
different people there and they are investing in the equity, then that would "e
worrisome, "ut I don(t see a solution as yet anywhere.7
)hen as-ed was there anything she would have done differently,
6inatha was clear. 1I thin- that I would do the same thing all over again.7
Suresh differed. 1If we were to do it all over again, I thin- we would have "een
more aggressive. )e mostly learnt "y doing things, and it too- time. *nd I feel
that, whatever stage we are in, we would have got more professionals, pro"a"ly
a year "efore.7
The Governing Board consisted of 6inatha 2eddy(s sister 6iitha
Su""iah and 3r Rayaram 2eddy D"oth trustees of T. 3uniswamappa TrustE,
Gopal and si% mem"ers of GH, and three 'outsiders( Da ournalist, an
37
LOANS & ADVANCES
educationist, and an individual who had wor-ed with one of India(s most
successful multinational fast moving consumer goods companiesE. *s-ed a"out
the issues that the governing "oard loo-s at, 6inatha 2eddy said. 1$ur "oard is
very nascent. )e are still trying to "uild it, you -now. )e were so naQve when
we started the "oard. )e didn(t -now how to conduct a meeting and all that. It
is ust "y as-ing people and learning from them, that we have started off this
"oard. *nd we still -now that it is not a very professional "oardF it is a very
soft and naQve "oard.7
E;$6#-1: G!%0''* .))#%-P!)1!'"" S#%#'0'*# %" )- 31
"#
M%!($
I#'0 2??? 2??1 2??2 2??3 2??4
5umulative
8 Branches 4os. 8 ; < A 8;
; 6illages 4os. 89 C= =@ 8<C C8<
C Hendras 4os. 8; @; G8 8=< @<C
@ Groups 4os. C@ 88= ;>9 A;< ;8@A
< 3em"ers 4os. 8A9 <=; 8;<= C<A9 89><G
> *ctive "orrowers 4os. 8C9 @@< G<8 ;A8= =;C>
A Field staff 4os. C = ;8 C9 >9
= $ther staff 4os. ; A 8; 8> 8;
G Savings
2s.
3illion 9.9C 9.;; 9.>> ;.9A >.;>
89
GH loans
outstanding
2s.
3illion 9.CA 8.;@ ;.>; A.CG ;;.C<
88
Group Fund loans
outstanding
2s.
3illion 9.98 9.9@ 9.8> 9.<< 8.C>
!uring Iear
8; GH loans 4os. 8C9 <<A 888< ;=8= =@>C
8C GH loans
2s.
3illion 9.<9 ;.88 @.A8 8@.A= @C.8=
8@ Group Fund loans 4os. G< <88 8<@A <;@; 8C99G
8< Group Fund loans 2s. 9.9; 9.;9 9.GA ;.GG =.C9
38
LOANS & ADVANCES
3illion
8>
!rop out
Dmem"ersE 4os. 8> <G 8>> CC; 88;C
8A 0mergency Loans 4os. + + + + =G@
8= 0mergency Loans
2s.
3illion + + + + 9.CG
39
LOANS & ADVANCES
E;$6
# 3:
G. O!1%*>%#)* S#!,(#,!'
40
LOANS & ADVANCES
E;$6#-4: G!%0''* .))#%D'#%2" )- L)%* %*+ S%7*1" P!)+,(#"
L)%* P!)+,(#" R'&%30'*# #'!0" S>' @R".A I*#'!'"# R%#'
Income Generation
Loan Dfor any
income generation
activityE
<9 wee-ly
installments
8
st
cycle 8999+<999
;
nd
cycle ma% A999
C
rd
cycle ma% G999
@
th
cycle ma% 88999
<th cycle ma%
8<999
8=? Flat S
processing fee of
;?
Supplementary Loan
Dfor enhancement or
restart of income
generation activityE
<9 wee-ly
installments
3a% ;999 8=? Flat S
processing fee of
;?
)elfare Loan Dfor
asset creationET
<9 wee-ly
installments
@
th
and <
th
cycle of
Income generation
loan
8;? Flat
0mergency Loan
DconsumptionE
89 wee-ly
installments
3a% 8999 2efer ; "elow
Group Fund Loan
DconsumptionE
3em"ers specify <9? of the group
savings "alance
9?
$ther charges collected "y GH:
8. .rocessing fee of ;? is collected at the time of loan dis"ursement "y GH.
;. 0mergency Loan !ocumentation fee D2s 8< for loans less than 2s <99 and
2s C9 for loans "etween 2s <99+8999E is charged.
T The @
th
and <
th
cycle of Income generation loan is usually given as welfare
loan which is used for asset creation.
41
LOANS & ADVANCES
T3&' )-
S%7*1"
I*#'!'"#
P%+
F!'5,'*(3 )-
"%7*1"
A0),*# :#$+!%4%2
)&#)*"
Group Fund >? )ee-ly 2s.< per wee-
S 2e.8 per 2s.
8999 of Income
Generation or
Supplementary
loan ta-en
)hen mem"er
drops out of
GH
6oluntary @? * mem"er can
decide
*ny time
Hendra Fund 4il )ee-ly 2e. 8 per wee- )hen mem"er
drops out of
GH
O#$'! ()*#!6,#)*" 63 0'06'!":
8. 3em"ers have to pay an *nnual Su"scription Fee of 2s.;< towards
mem"ership for @ years.
;. *ll the mem"ers contri"ute ;? of the loan amount towards the
0mergency Fund along with the loan repayment. This fund is used to
write off the loan outstanding of any mem"er who dies. *
compensation of 2s.<99 or 2s.8999 is given to the mem"er(s family
towards funeral e%penses.
C. * 5ollective 2esponsi"ility Fund D52FE is started when there is a
default in a Hendra and "oth the group or the Hendra are not in a
position to meet the defaulted installment. 2e.8 per wee- per mem"er
and 2e. ; per wee- per mem"er of the defaulting group is collected.
52F is refunded to the mem"ers only after the arrears are collected.
42
LOANS & ADVANCES
E;$6#-5: G!%0''* .))#%-S),!('" )- F,*+" BR". M22)*C
D"6,!"'0'*#" L)%* I*#'!'"#
S),!(' U&#) I* T'*)! R%#'
M%!-?3 2??3-?4 BY'%!"C
8
,ousing
!evelopment #
Finance
5orporation ;.9> ;.8; C 8;.99?
;
Friends of )omenUs
)orld Ban-ing @.99 G.99 ; 8C.<9?
C
Small Industries
!evelopment Ban-
of India 9.99 ;.99 < 88.99?
@
Grameen Trust,
BS* ;.@@ 9.99 C ;.99?
< 5anara Ban- ;.99 9.99 C 89.<9?
> !eutsche Ban- 9.99 ;.<9 @ G.99?
A B.T.I.Ban- 9.99 89.<< @ 88.<9?
=
Grameen Trust Dfor
operating costE 9.C< 9.99 C 9.99?
G
6ehicle loans from
> institutions 9.;@ 9.<8
89
Indian
!evelopment
Service, BS*
8
9.99 9.;< Grant
88
Grameen
Foundation, B.S.*. 8.8C 9.99 Grant
8;
Small Industries
!evelopment Ban-
of India 9.99 9.;> Grant
8C $ther donations 9.99 @.@9 Grant
TOTAL 12.22 31.5D
8
Initally a loan, converted into a grant after C8
st
3arch, ;99@
43
LOANS & ADVANCES
E;$6# EA: I*()0' S#%#'0'*# )- G!%0''* .))#% -)! #$' 3'%! '*+*1 31
"#
M%!($ BR". M22)*C
2??3 2??4 B!%*($'" HO
I*()0' 2.?D E.E? E.2F ?.33
Interest and other
income from loans ;.99 >.;C >.;C 9.99
Income from other
services 9.9A 9.9A 9.9@ 9.9C
Income from
investments 9.98 9.C9 9.99 9.C9
E;&'*"'" 4.?D G.FD 5.?E 4.F2
Total financial costs 9.>= ;.<= 9.88 ;.@A
Loan loss provision 9.99 9.@@ 9.@@ 9.99
Staff cost 8.A8 C.8> ;.@8 9.A<
$ther
administrative
e%penses 8.>G C.>9 ;.89 8.<9
Income ta% 9.99 9.99 9.99 9.99
N'# *()0' H2)""
%-#'! #%; -2.?? -3.1D 1.21 -4.3G
E;$6# EB: B%2%*(' S$''# )- G!%0''* .))#% %" )- 31
"#
M%!($ BR". M22)*C
2??3 2??4
A""'#"
5ash and "an- 9.G< <.C;
Short term investments 8.;9 <.C=
Gross GH loans outstanding A.CG ;;.C<
Less: Loan loss reserve 9.99 +9.@@
4et GH loans outstanding A.CG ;8.G8
Group fund loans 9.<< 8.C>
0mergency Loans 9.99 9.CG
$ther short term assets 9.;C 8.C>
4et property # equipment 8.;; ;.9G
T)#%2 A""'#" 11.54 3F.D1
L%62#'" 14.2F 3G.?D
S%7*1" -!)0 0'06'!" 2.?F E.2E
6oluntary 9.8A 8.<9
Group fund 8.<; C.>;
Hendra fund 9.88 9.CA
44
LOANS & ADVANCES
0mergency fund S 5ollective 2esponsi"ility
Fund 9.;A 9.AA
O#$'! "$)!# #'!0 2%62#'" ?.5E ?.GG
5aution deposit 9.;= 9.<=
Staff )elfare fund 9.9C 9.9=
$ther short term lia"ilities 9.;< 9.CC
L)*1 #'!0 +'6# 11.E4 31.D3
Soft loansDTotalE @.;< @.9>
Grameen Trust @.99 C.=8
India !evelopment Service 9.;< 9.;<
2egular loans A.CG ;A.AA
6ehicle loans 9.>= 9.>>
,ousing !evelopment # Finance 5orporation 8.A= C.8@
Friends of )omenUs )orld Ban-ing C.;9 =.G;
5anara Ban- 8.AC 9.99
Small Industries !evelopment Ban- of India 9.99 ;.99
!eutsche Ban- 9.99 ;.<9
BTI Ban- 9.99 89.<<
E5,#3 -2.F3 -1.2F
!onation # grants 8.8C <.A=
.revious earnings&DlossesE +8.=> +C.=>
5urrent earnings & loss +;.99 +C.8G
T)#%2 L%62#'" I E5,#3 11.54 3F.D1
E;$6# F: G!%0''* .))#%B!%*($ D'#%2" %" )- 31
"#
M%!($ 2??4
Sl.
No.
Branch Set Up
No. of
villages
No. of
kendras
No. of
groups
No. of
members
Operating
Surplus
2003-0
!s "illion
1 Kaggalipura 36281 44 51 234 1155 0.52
2 Kanakapura 36861 40 49 244 1208 0.22
3 Channapata
na
1
37165 53 75 400 1985 0.76
4 Halagur 37257 33 49 242 1191 0.29
5 Malavalli 37257 43 62 313 1551 0.37
6 Channapata
na Town 38018 7 7 27 135 0.03
#rea $
220 293 1460 7225 2.13
7 Chikkana!a
kana Halli 37653 21 38 171 853 0.04
8 Turuv"k"r" 37653 25 44 191 957 0.01
9 Ch"lur 37712 23 37 165 825 0.07
10 #u$$i 37712 25 40 156 781 0.26
11 %ittur 38047 1 1 4 18 0.04
45
LOANS & ADVANCES
12 &"llur '30
(pr 2004) 38047 4 6 24 119 0.04
#rea
$$ 99 166 711 3553 0.46
1
C$%**%&%#*% B!%*($ S,!&2,"
L)%* &)!#-)2) 31
"#
M%!($ 2??4 4.?2
Interest and other income from loans 8.@@
Financial cost 9.9;
Staff cost 9.C@
$ther administrative e%penses 9.C;
Branch surplus 9.A>
46
LOANS & ADVANCES
CHAPTER IV
ANALYSIS AND INTERPRETAION OF DATA
I*#!)+,(#)*:
Generally research consists of two parts, namely gathering of data and
the analysis of the data. The man gathering through sophisticated tools however
valid relia"le and adequate is yet, "ut unless it is carefully edited,
systematically classified, analy/ed intelligently, interpreted and rationally
concluded. The analysis and interpretation of the o"ect material in the
possession of the research and su"ective reaction and deserve to drive from the
data, the inherent reaction and among varia"les pertaining to the inductive long
to the research process.
A*%23"":-
*nalysis means "rea-ing down the comple%ity of the structure with
simple% elements together in new com"ination or pattern so as to discover new
relationship or new factor, this can "e achieved only "y viewing data from
different angles and "y depressing the data adequately.
*nalysis plays a role in research on from the other form in the
"eginning:-
47
LOANS & ADVANCES
In the selection of the pro"lem from a wide field -nowledge.
To e%amine resource of data.
In the determination of various method and so on.
INTERPRETATION
The interpretation refers to the starting of what the findings, it means the
significance and helps in drawing the answer to the original pro"lem.
Interpretation of the analy/ed requires considera"le s-ill and e%perience. It is
purely su"ective process. ,ence, interpretation calls for, as e%amination of the
light of all the limitation of his&her data gathering.
A&&!%"%2 )- 2)%* &!)&)"%2:-
The appraisal of the loan proposal is done "y the Grameen Financial
Services, a mem"er of the factor are ta-en into account while assessing the loan
proposal they are:
The loans would "e sanctioned only when the Grameen Financial
Services will see whether the "orrowers repaying capacity, a"ility to do
"usiness, willingness to repay the loan, his character is ta-en into consideration
"ecause willingness to repay must "e there along with the economic via"ility.
This appraisal is done "y an advisory committee headed "y !eputy
General 3anager.
48
LOANS & ADVANCES
ANALYSIS / INTERPRETATION OF DATA
4.1 T%62' S$)4*1 A1' 1!),& &- !'"&)*+'*#"
S2. N). AGE NO. OF RESPONDENTS
8 8=+C9 8;
; C8+@9 @9
C @8+<9 8=
@ *"ove <8 C9
T)#%2 1??
From the a"ove ta"le it was found that @9? respondents followed the
age group of C8+@9, C9? respondents followed the age group of a"ove <8,8=?
respondents followed the age group of @8+<G,8;? respondents followed the
age group of 8=+;9.
49
LOANS & ADVANCES
4.1 C$%!# "$)4*1 A1' 1!),& )- !'"&)*+'*#"
12
40
18
30
0
25
50
75
100
N
o
.

o
f

R
e
s
p
o
n
d
e
n
t
s
18-30 31-40 41-50 Above 51
AGE
18-30 31-40 41-50 Above 51
50
LOANS & ADVANCES
4.2 T%62' S$)4*1 O((,&%#)* )- R'"&)*+'*#"
S2. N). O((,&%#)* N). )- R'"&)*+'*#"
8 Govt. 0mployed ;=
; .vt. 0mployed ;@
C *griculturist ;@
@ $thers ;@
T)#%2 1??
From the a"ove ta"le it was found that ;=? Govt. employed,;@?
respondents were private employed,;@? respondents were agriculturist,;@?
respondents were if other.
4.2 C$%!# S$)4*1 O((,&%#)* )- R'"&)*+'*#"
51
LOANS & ADVANCES
28
24
24
24
0
10
20
30
40
50
60
70
80
90
100
N
o
.

o
f

r
e
s
p
o
n
d
e
n
t
s

Govt. Employed Pvt. Employed Agricltri!t "t#er!
Occupation
Govt. Employed Pvt. Employed Agricltri!t "t#er!
52
LOANS & ADVANCES
4.3 T%62' S$)4*1 %0),*# )- L)%* #%<'* 63 #$' G!%0''* F*%*(%2
S'!7('" -!)0 #$' R'"&)*+'*#"
S2. N). A0),*# )- 2)%* N). )- R'"&)*+'*#"
8 Below 8 la-h 8>
; 8+; la-hs >9
C ;+< la-hs 8>
@ < la-hs # a"ove =
T)#%2 1??
From the a"ove ta"le it shows that >9? respondents amount ta-en for
loan 8+; la-h,8>?respondents amount ta-en for loan 8la-h,8>? respondents
amount ta-en ;+< la-h, =? respondents < la-hs # a"ove were if other.
4.3 C$%!# S$)4*1 %0),*# )- L)%* #%<'* 63 #$' G!%0''* F*%*(%2
S'!7('" -!)0 #$' R'"&)*+'*#"
53
LOANS & ADVANCES
16
60
16
8
0
25
50
75
100
N
o
.

o
f

R
e
s
p
o
n
d
e
n
t
s
$elo% 1 l&'# 1-2 l&'#! 2-5 l&'#! 5 l&'#! ( &bove
Amount of loan
$elo% 1 l&'# 1-2 l&'#! 2-5 l&'#! 5 l&'#! ( &bove
54
LOANS & ADVANCES
4.4 T%62' S$)4*1 #3&' )- L)%* #%<'* 63 #$' G!%0''* F*%*(%2 S'!7('"
R'"&)*+'*#"
S2. N). T3&' )- 2)%* N). )- R'"&)*+'*#"
8 .ersonal ;9
; ,ousing loan @@
C 0ducational loan 8>
@ 6ehicle loan 89
5 $thers 89
T)#%2 1??
From the a"ove ta"le it shows that @@? respondents were housing loan,
;9? respondents were personal loan, 89? respondents were vehicle loan, and
8>? respondents were educational loan.
4.4 C$%!# S$)4*1 #3&' )- L)%* #%<'* 63 #$' G!%0''* F*%*(%2 S'!7('"
R'"&)*+'*#"
55
LOANS & ADVANCES
20
10
44
16
10
Per!o)&l *o!i)g lo&) Edc&tio)&l lo&) +e#icle lo&) "t#er!
4.5 T%62' "$)4*1 #$' +)(,0'*#" ",60##'+ #) %7%2 2)%*
56
LOANS & ADVANCES
S2. N). D)(,0'*#" N). )- R'"&)*+'*#"
8 I.! .roof @=
; Grameen Financial
Services statement
=
C Salary 5ertificate C>
@ *ll the a"ove =
T)#%2 1??
From the a"ove ta"le it shows that which document su"mitted to avail
loan out off <9? respondents,@=?respondents ta-en loan for id proof,
C>respondents ta-en loan for salary certificate,=? respondents ta-en for
Grameen Financial Services statement, =? respondents ta-en all the a"ove.
4.5 C$%!# "$)4*1 #$' +)(,0'*#" ",60##'+ #) %7%2 2)%*
57
LOANS & ADVANCES
48
8
8
36
,.- Proo. $&)' !t&teme)t /&l&ry 0erti.ic&te All t#e &bove
58
LOANS & ADVANCES
4.E T%62' "$)4*1 #$' 2'%+ #0' #) 1'# #$' 2)%*
S2. N). T0' A1! SSI LSI I*+7+,%2 IO
8 8 )ee-s C9 89 8< @9
; ; )ee-s ;9 ;< 89 ;9
C C )ee-s ;< C9 C9 ;;
@ @ )ee-s ;< C< @< 8=
T)#%2 T)#%2 1?? 1?? 1?? 1??
From the a"ove ta"le it shows that 2'%+ #0' #) 1'# #$' 2)%* @9? respondents
said 8 )ee-s, ;;? respondents said C wee-s, ;9? respondents said ; wee-s,
8=? respondents said @ wee-s
59
LOANS & ADVANCES
4.E C$%!# "$)4*1 #$' 2'%+ #0' #) 1'# #$' 2)%*
30
10
15
40
20
25
10
20
25
30 30
22
25
35
45
18
0
10
20
30
40
50
60
70
80
90
100
1 1ee'! 2 1ee'! 3 1ee'! 4 1ee'!
Agri //, 2/, ,)divid&l ,"
60
LOANS & ADVANCES
4.F T%62' "$)4*1 #$' !%#' )- *#'!'"# -'%"62' #) !'"&)*+'*#"
S2. N). A0),*# )- *#'!'"# N). )- !'"&)*+'*#"
8 C+< ? <;
; <+89 ? ;=
C 89+8< ? ;9
T)#%2 1??
From the a"ove ta"le it shows that out of <9?, <;? respondents
feasi"le to C+<, ;9? respondents feasi"le to 89+8<, # ;=? respondents feasi"le
to <+89.
61
LOANS & ADVANCES
4.F C$%!# "$)4*1 #$' !%#' )- *#'!'"# -'%"62' #) !'"&)*+'*#"
52
28
20
0
10
20
30
40
50
60
70
80
90
100
N
o
.

o
f

r
e
s
p
o
n
d
e
n
t
s

3-5 3 5-10 3 10-15 3
Amount of interest
3-5 3 5-10 3 10-15 3
62
LOANS & ADVANCES
4.D T%62' "$)4*1 *"#%220'*#" !'5,!'+ #) &%3 #$' 2)%*
S2. N). N). )- *"#%220'*#" N). )- R'"&)*+'*#"
8 89+;9 >
; ;9+C9 C>
C C9+@9 @9
@ @9 # a"ove 8=
T)#%2 1??
From the a"ove ta"le it shows that out of <9?, @9? respondents
required paying the loan C9+@9, C>? respondents were ;9+C9, 8=?respondents
were @9 # a"ove, >? respondents were 89+;9.
63
LOANS & ADVANCES
4.D C$%!# "$)4*1 *"#%220'*#" !'5,!'+ #) &%3 #$' 2)%*
6
36 40
18
0
10
20
30
40
50
60
70
80
90
100
N
o
.

o
f

r
e
s
p
o
n
d
e
n
t
s

20-"ct 20-30 30-40 40 ( &bove
No. of installments
20-"ct 20-30 30-40 40 ( &bove
64
LOANS & ADVANCES
4.G T%62' "$)4*1 .*+" )- +'&)"# #$)"' !'"&)*+'*#" $%7' 0%+'
S2. N). .*+" )- +'&)"#" N). )- R'"&)*+'*#"
8 Fi%ed deposit ;@
; 2etail @
C Savings deposit <=
@ Bul- deposit 8@
5*S* deposit ;@
T)#%2 1??
From the a"ove ta"le it shows that <=? respondents have made for
saving deposit, ;@? respondents have made for fi%ed deposit, 8@? respondents
have made for "ul- deposit, and @? respondents have made for retail Grameen
Financial Services.
4.G C$%!# "$)4*1 .*+" )- +'&)"# #$)"' !'"&)*+'*#" $%7' 0%+'
65
LOANS & ADVANCES
24
4
58
14
24
0
25
50
75
100
N
o
.

o
f

R
e
s
p
o
n
d
e
n
t
s
4i5ed depo!it 6et&il /&vi)g!
depo!it
$l' depo!it 0A/A depo!it
Kinds of deposits
4i5ed depo!it 6et&il /&vi)g! depo!it $l' depo!it 0A/A depo!it
4.1? T%62' "$)4*1 &,!&)"' )- +'&)"# 0%+' 63 R'"&)*+'*#"
66
LOANS & ADVANCES
S2. N). P,!&)"' )- +'&)"# I* &'!('*#%1'
8 0ducation 8=
; Business ;9
C ,ealth @;
@ $ther .lease Specify ;9
T)#%2 1??
From the a"ove ta"le it shows that @;? respondents were health, ;9?
respondents were "usiness, ;9? respondents were other, 8=? respondent(s
education.
4.1? C$%!# "$)4*1 &,!&)"' )- +'&)"# 0%+' 63 R'"&)*+'*#"
67
LOANS & ADVANCES
18
20
20
42
Edc&tio) 4rie)d! 6el&tive! "t#er!
68
LOANS & ADVANCES
4.11 T%62' "$)4*1 #$' %0),*# )- +'&)"# 0%+' 63 R'"&)*+'*#"
S2. N). A0),*# )- +'&)"# N). )- R'"&)*+'*#"
8 2s.8999+8<999 =
; 2s.8<999+;<999 >>
C 2s.;<999+<9999 ;9
@ 2s.<9999+899999 >
T)#%2 1??
69
LOANS & ADVANCES
From the a"ove ta"le it shows out of <9?, >>? respondents were
8<999+;<999, ;9? respondents were ;<999+<9999, =? respondents were
89999+8<999 respondents were <9999+899999.
4.11 C$%!# "$)4*1 #$' %0),*# )- +'&)"# 0%+' 63 R'"&)*+'*#"
70
LOANS & ADVANCES
8
66
20
6
0
10
20
30
40
50
60
70
80
90
100
N
o
.

o
f

r
e
s
p
o
n
d
e
n
t
s

6!.1000-15000 6!.15000-250006!.25000-50000 6!.50000-
100000
Amount of deposit
6!.1000-15000 6!.15000-25000 6!.25000-50000 6!.50000-100000
4.12 T%62' "$)4*1 #$%# #$' 5,%2#3 )- "'!7('" 4$2' #%<*1 % 2)%*
S2. N). 8,%2#3 )- "'!7(' N). )- R'"&)*+'*#"
8 Better return on investment @@
71
LOANS & ADVANCES
; ,igh rate of interest earnings 8>
C Best services ;9
@ *ccurate services ;9
T)#%2 1??
From the a"ove ta"le it shows ;9? respondents were "est services, @@?
respondents were "etter return on investment, ;9? respondents were accurate
services, 8>? respondent(s high rate of interest earnings.
72
LOANS & ADVANCES
4.12 C$%!# "$)4*1 #$%# #$' 5,%2#3 )- "'!7('" 4$2' #%<*1 % 2)%*
44
16
20 20
0
25
50
75
100
N
o
.

o
f

R
e
s
p
o
n
d
e
n
t
s
$etter retr)
o) i)ve!tme)t
*ig# r&te o.
i)tere!t
e&r)i)g!
$e!t !ervice! Accr&te
!ervice!
Quality of service
$etter retr) o) i)ve!tme)t *ig# r&te o. i)tere!t e&r)i)g! $e!t !ervice! Accr&te !ervice!
73
LOANS & ADVANCES
CHAPTER-V
FINDINGS / CONCLUSIONS SUGGESSIONS
V.1 FINDINGS:-
8. It was found that @9? respondents followed the age group of C8+@9
;. It(s found that ;=? are govt. employed.
C. 3aority of the respondents that is >9? have ta-en loan a"ove 8+; la-h.
@. @@? num"ers of respondents are preferred for the housing loan.
<. @=? of the respondents while providing the loan proposals the "orrower
have to provide I! proof.
>. @9? of the respondents will ta-e 8 wee- of the lead time to get the loan.
A. @;? of the respondents said that C+<? interest is feasi"le them to pay
the loan.
=. @9? of the respondents said that C9+@9 installments are required to pay
the loan.
G. <=? of the respondents have saving deposits in Grameen Financial
Services.
89. It is found that @;? respondents deposits upon health purpose.
74
LOANS & ADVANCES
88. >>? of the respondents deposit to amount in a Grameen Financial
Services.
8;. It is found that >9? of respondents need "est services.
5.2 SUGGESTIONS:-
8. .roperly # get the account audited "y qualified auditors.
;. To provide *T3 facilities to the customer.
C. To provide more # more facilities to education loan schemes.
@. To provide online Grameen Financial Servicesing.
<. The Grameen Financial Services should open its "ranches in
2ural # Br"an areas # all over the 5ity.
>. .rovide more deposit schemes.
75
LOANS & ADVANCES
5.3 CONCLUSION:
The Grameen Financial Services has good system of loan proposals,
which helps to sanction the loan. The time ta-en "y the Grameen Financial
Services to sanction the loan is satisfactory.
The loans are sometimes reected also, it is "een ta-en into
consideration, the manager ahs to maintain the record of the reected
application.
The Grameen Financial Services is providing loan to the vehicles loan,
educational loan, and personal loan are sanctioned more in num"ers.
The Grameen Financial Services is very good at providing the services
and gives high rates of interest and the accurate services.

76
LOANS & ADVANCES
BIBLIOGRAPHY
www.gfs"l.org
Grameen Financial Services 2ecords.
www.m"nV-"sla"Wsancharnet.in
77
LOANS & ADVANCES
78
LOANS & ADVANCES
8UESTIONNAIRE
4ame : LLLLLLLLLLLLLLLL.
8. *ge
aE 8= J C9 "E C8+ @9
"E @8+ <9 dE *"ove
;. Se%
aE 3ale "E Female
C. $ccupation
aE Govt. 0mployee "E .vt. 0mployee
cE *griculturist dE if others Specify
@. ,ow much amount of loan you have ta-en from Grameen Financial
Services .vt. Ltd.
aE Below 8 la-h "E 8+; la-hs
cE ;+< la-hs dE < la-hs # a"ove
<. )hich -ind loan you have ta-en from Grameen Financial Services .vt. Ltd.
aE .ersonal Loan "E ,ousing Loan
cE 0ducation Loan dE 6ehicle Loan
eE If others, specifyLLLLLLLLLLLLL
>. )hat are the documents to you su"mitted to aval the loanN
cE I.! .roof "E Grameen
Financial Services Statement
dE Salary 5ertificate dE *ll the *"ove
A. )hat is the lead time to get the loanN
aE 8 )ee- "E ; )ee-
cE C )ee- dE @ )ee-
=. )hether interest rate is feasi"le for youN
79
LOANS & ADVANCES
aE C + <? "E < + 89?
cE 89 + 8<?
G. 4um"er of installment required paying the loanN
"E 89 + ;9 "E ;9 + C9
cE C9 + @9 dE @9 # *"ove
89. 4ame of the present deposit you have madeN
aE Fi%ed !eposit "E 2etail !eposit
cE Saving !eposit dE Bul- !eposit
eE 5*S* !eposit
88. )hat is .urpose of depositN
aE 0ducation "E Business
"E ,ealth dE $thers please specify
8;. ,ow much amount did you deposit
aE 2s. 89999 + 8<999 "E 8<999 + ;<999
cE 2s. ;<999 + <9999 dE 2s. <9999 + 899999
8C. )hat quality would you loo- ta-ing loanN
aE Better return on Investment
"E ,igh rate of Interest earnings
cE Best Service dE *ccurate Service
*ny Suggestions
LLLLLLLLLLLLLLLLLLLLLLLLLLL
LLLLLLLLLLLLLLLLLLLLLLLLLLL
80
LOANS & ADVANCES
LLLLLLLLLLLLLLLLLLLLLLLLLLL
81