Introducing ASSEFA

ASSEFA is a voluntary organisation that has worked in the field of rural development in India for over 25 years. ASSEFA’s development strategy is community based and it works in an integrated approach taking the village as one unit.

Its aim is to help the rural village to become self sufficient and to be self reliant in managing its affairs with the least assistance from outside. One aspect of this process is credit management.

ASSEFA’s savings and credit programme is primarily operated by the Sarva Jana Seva Kosh(KOSH)or the People’s Welfare Bank which was set up in 1989 by ASSEFA.

The KOSH carries out its work through its Branches set up in village clusters, usually about 20 villages each. Its work with the poor beneficiaries is facilitated through the Village Councils known as Gram Sabhas which are considered grass roots level people’s organisations for the purpose of the credit scheme.

The Gram Sabha which comprises all beneficiaries as its members, handles all activity at village level which includes the administering of loans and projects and monitoring of such. The Gram Sabha includes a special women’s club which is called the Mahila Mandal.

ASSEFA’s projects are implemented in areas covering a majority of poor households. Projects are implemented in 29 areas and each covers a fixed number of villages in a geographically defined area.

The target group of the programme is poor communities who are in need of credit but have no access to the formal banking system due to their poverty. All residents in the target area are included in the target group and automatically become members of the Gram Sabha or Mahila Mandal when the credit system is implemented in the village.

At village level, the credit programme is run on a mechanism called the Village Fund which is made up of the savings and deposits of the beneficiaries.

The target groups are familair with the concept of the Village Fund in that it existed traditionally in the village where a percentage of all sales made in the village was collected in a common fund. At that time, the money so collected was used for social expenses such as functions and the building of community halls.

ASSEFA has borrowed this traditional concept, revamped and developed it with the aim of promoting economic progress. The fund will primarily assist in developing the village economy which in turn would help sustain the fund.

Although all residents of the project village are members of the credit programme, not all can claim loans as a right of being a mere member. Every prospective loanee must fit into the criteria, both personally and with regard to their proposed projects, specified by the laws relating to the KOSH.

To be eligible to apply for a loan, a beneficiary must be literate to the level of being able to sign his/her name. The beneficiary must have saved with the KOSH for at least one year and the minimum level of savings required for different types of loans is determined periodically by the KOSH.

The beneficiary must have undertaken and successfully completed a period of training conducted by the KOSH. This includes an introduction of the scheme and its objectives, procedures, management techniques and accounting systems.

The environmental effects of the proposed projects are also analysed and must be positive. The project must also be compatiblewith the long term development plans made for the village.

Once the beneficiaries meet these specifications, the KOSH provides them with professional training on economic activities and disburses loans according to the rules and procedures governing the scheme.