Ots 24 24002-49 2

CHAPTER 1
1.1 Introduction
In recent years, in its wider dimension micro credit known as microfinance have become a much-
favoured intervention for poverty alleviation in the developing countries and least development
countries.
It is amply demonstrated by various studies that rapid and sustainable poverty reduction depends
on interaction of a wide range of policy measures and interventions at macro, meso and micro
levels. The availability of microfinance can play an important role in this direction. One
element of an effective strategy for poverty reduction is to promote the productive use of the
poor’s labour. This can be done by creating opportunities for wage employment, by raising
agricultural productivity among small and marginal farmers, and by increasing opportunities for
self-employment. Microfinance is particularly relevant for increasing the productivity of self-
employment in the informal sector of the economy. In an environment where economic growth
is occurring, microfinance also has the capacity to transmit the benefits of growth more rapidly
and more equitably through the informal sector. It is well documented that for many micro
entrepreneurs, lack of access to financial services is a critical constraint to the establishment or
expansion of viable micro enterprises. Microfinance may also enable small and marginal farmers
to purchase the inputs they need to increase their productivity, as well as financing a range of
activities adding value to agricultural output and in the rural off-farm economy. Access to
savings facilities also plays a key part in enabling the poor to smoothen their consumption
expenditures, and in financing investments, which improve productivity in agriculture and other
economic activities.
In our project “tools and parameters to identify star borrowers”, we would be finding out those
exceptional borrowers who have performed very well during last four cycles financially as well
as socially.
We have tried to see them through their asset generation, income change, savings and change in
their standard of living before and after they have joined Grameen koota. This will help us to
have a leeway about how they will perform in case they are given bigger loan amounts.
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1.2 Micro credit
Micro credit means provision of small credit to the poor people for creating self-employment
with a view of alleviating their poverty and attaining sustainable development. Micro credit is
based on the premise that the poor have skills, which remain unutilised or under-utilised. It is
definitely not the lack of skills, which make poor people poor. All the microfinance institution
believes that the poverty is not created by the poor; the institutions and policies, which surround
them, create it. In order to eliminate poverty the need is to make appropriate changes in the
institutions and policies, and/or create new ones. They believe that charity is not an answer to
poverty. It only helps poverty to continue. It creates dependency and takes away individual's
initiative to break through the wall of poverty. Unleashing of energy and creativity in each
human being is the answer to poverty. Organisations working in the field of supplying micro
credit believe that some of the distinguishing features of micro credit can be summed up as
(a) Micro credit is there to help the poor families so that they can come out of the
vicious cycle of poverty. It is targeted for the poor, particularly poor women.
Reaching the poor is its non-negotiable mission. Reaching sustainability is a
directional goal. It must reach sustainability as soon as possible, so that it can
expand its outreach without fund constraints.
(b) It is offered for creating self-employment for income-generating activities and

housing for the poor, as opposed to consumption.
(c) Most distinctive feature of Micro credit is that it is not based on any collateral or
legally enforceable contracts. It is based on "trust", not on legal procedures and
system.
(d) All loans are to be paid back in instalments (weekly).
(e) In order to obtain loans a borrower must join a group of borrowers.
(f) Loans can be received in a continuous sequence. New loan becomes available to
a borrower if her previous loan is repaid.
(g) Simultaneously more than one loan can be received by a borrower.
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(h) It comes with both obligatory and voluntary savings programmes for the
Borrowers.
Thus we can see that micro credit is targeting the poverty from multiple angles.
1.3 Objective of the present study
The objective of the study is as follows:
• An assessment of performance of member of Grameen Koota in the entrepreneur activity in

terms of income, consumption and savings.
• An assessment of economic benefits accruing to the member of Grameen Koota in terms of

increase in assets base, improvement in standard of livings over the previous loan cycles.
• Social impact of the Grameen Koota Income Generating loans in terms of education, family
planning, community participation and social and political awareness.
1.4 Methodology
An overwhelming majority of Grameen Koota’s member’s falls below the poverty line. Doubly
oppressed by gender and caste hierarchies, impoverished village women suffer the most. Their
restricted access to economic resources and limited participation in the political process render
them particularly vulnerable to the consequences of both human blunders and natural calamities.
The various stages of the development of tools and parameters are shown in chart.
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Week 1 2 3 4 5 6 7
Stages of development
Review of literature X
Field exposure X
Interaction with staff X
Designing of form A X
Area level (SED)workshop X
Designing of form B X
Pilot testing I of form A&B X X
Revision of form A & B X
Translation in Kannada X
Consultation with COO X
Pilot testing II of form A&B X
Meeting with Kendra staff X
Writing Case Studies X
Final Tools and parameters X
Our study is largely based on primary research, which we have conducted during our visit of
various branches, and after attending various Kendra meetings. At many places we have also
taken the help of secondary data to get a clearer picture and wider perspective about the whole
situation. In our attempt to assess the effectiveness of Grameen Koota’s working we have drawn
observation from the personal experience of branch staff and the various other employees
working in the organisation. For our study we have adopted three-pronged strategy. Our study is
based on
(a) Exploratory research
(b) Testing of sample form
(c) Case studies
1.4.1 Exploratory research
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This was the first and the most important step of our process for getting the tools and parameters
to identify star borrowers. We started our study by getting the basic input about the working of
Grameen Koota. We interacted with the management of Grameen Koota and got a quite decent
feedback about the processes in place. Then we visited the area two, which is the most recent
one. There we attended the Kendra meetings and interacted with the branch manager and the
Kendra managers. Attending the meeting in person and interacting with the member helped us in
getting the real picture of how everything is going on at the grass root level and at the place
where it matters the most. We had some informal discussions with the women members, our
imperfect knowledge of regional language was a hindering block but knowing Urdu sufficed for
the lack. This area was a new one so the staff was still grappling with the systems. We also
visited the homes of the members, where we were successful in getting in-depth information
about the individual member. In both group and individual interviews, our objective was to find
out as much as possible the difference in women’s life before and after joining Grameen Koota.
The interviews were very informal and loosely structured. Except this we also saw the process of
group formation. We attended compulsory group training (CGT) where the new members are
given orientation. In CGT the purpose and sanctity of Grameen Koota is told to the new
members. After CGT is over there are re-interviews and then group recognition training is done.
These steps help in judging what is the status of new member’s vis-à-vis Grameen Koota
objective and mission.
We repeated the same process in our visit to area one. Area one is the region from where
Grameen Koota started its operations, hence the system has been streamlined in a far better way
as compared to area two.
Input based on the comparison of both the areas was of tremendous help for us in many ways.
We then discussed the differences with the head office staff and got their point of view also.
After all these discussion and getting more inferences from the Grameen Koota literature and
related one we decided to pin point our study to area one where we would be able to find out the
star borrower based on the last four cycles.
1.4.2 Testing of sample form
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After doing our basic exploratory research we decided to prepare a questionnaire based on the
inputs obtained through our field visits. We prepared a checklist, which was containing the entire
set of all possible questions, which we can encounter for finding a star borrower. We planned to
have a “funnel approach” that is moving from the descriptive grouped question to a selected
specific few. So after zeroing on our working methods we selected the oldest branch of Grameen
Koota, which was Kagglipuira and made it as our survey branch. Our Testing was based on
judgmental sampling. Here around ninety members have completed the fourth loan cycle and
hence we thought them to be fit for our form testing. Our whole process was based on the
understanding that the Kendra manager would do the field test for finding of star borrower. Here
at this branch after consultation we distributed fifteen questionnaires to the Kendra managers and
they were instructed to fill the questionnaire in consultation with the member. We tried to have
this approach so that we can identify which are the questions difficult to answer and those
questions whose answer would not be reliable enough so that we can modify the questionnaire
according to the practical conditions.
1.4.3 Case studies
To get the right picture of what has been the qualitative improvement in the life of the members
during the last four cycles we also decided to prepare case studies of four exceptionally
performing members. This will help us to identify the parameters, which symbolises a star
borrower. These case studies will also help, as the example for the other member to follow if
they want to become a star borrower in the coming future. Thus we visited the house of
individual member and through the interaction with them got to know what they have achieved
during the association with Grameen Koota. These case studies thus helped us in getting the
qualitative or in other words the more important social aspect of the star borrower identification.
1.5 Designing of check list
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Based on the pilot testing and the discussion with the field staff we came to the conclusion that we would
design two checklists. First checklist would be called as form A and it would be done so as to eliminate
those members who do not fulfil the basic criterion required to be a star borrower. Then the screened and
selected members from checklist A would be tested on checklist B. Finally all those who have passed the
cut-off limit would be called as star borrowers.
1.6 Limitation
Due to shortage of time, the coverage of the study area cannot be extended, which hindered
getting a perfect picture. The form requires data extensively and MIS implementation was in the
last phase for the branches. Initial screening of members by form A took time which can be
overcome over a period as the MIS implementation will be complete in coming months. This
was a whole new concept and Kendra Managers are not trained for this project. This was the first
quantitative impact assessment done apart from the case studies done by the research team of
Grameen Koota in the recent past.
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CHAPTER 2
2.1 Grameen Koota
In the year 1995, Smt. Sharadamma established a public charitable institution by the name, T.
Muniswamappa Trust in memory of her father; she wanted the Trust to serve people in and
around Avalahalli (the ancestral village). The objectives of the Trust were the establishing,
running and maintaining of different services like reading rooms, medical dispensaries, micro-
credit institutions, educational institutions, scholarships for poor students and cultural
associations for the benefit of the people in the surrounding villages.
Grameen Koota was visualised in 1997, based on a book “Give us Credit” by Alex Counts,
giving an account of the impact of micro-credit on the lives of the poor in Bangladesh and USA.
Highly inspirational stories of large numbers of people rising above the poverty line through the
use of micro-credit motivated the trustees of T. Muniswamappa Trust to replicate a similar
program for the benefit of the poor in the surrounding villages of Avalahalli. Grameen Koota
started operations from 30th May 1999, as a Grameen Bank Replication Program, with the help
of seed capital funding from Grameen Trust.
The group is the key unit in the Grameen Koota credit programme. Its formation is the first
necessary step to receive credit. This group usually consists of five like-minded people, males
and females, separately. The groups are organised into centres, each with its elected leader and
secretary. No members in a group can get another loan if any member defaults or its performance
and repayment schedules are not well maintained. This process is kind of social collateral in
which group solidarity and group accountability relationship act as deterrence against defaulters.
If we try to summarise the genesis of grameen koota, then the following points would be the
most enumerated ones and can be seen as the main driving force of grameen koota for which it
was conceived
• Empowering women
• Creating livelihood opportunities
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• Reducing vulnerability of the poor
• Impacting poverty
• Addressing the issue of equality and social justice
• Providing institutional credit to the unorganized sector
2.2 Vision of Grameen Koota
The organisation envises building a Micro Finance Institution, which will eventually be
owned, managed and used by poor women.
2.3 Mission of Grameen Koota
 To help poor women in rural areas and urban slums with micro-credit, to work themselves
and thereby their families out of poverty.
 To constantly deliver need based financial services in a cost effective manner and to
become a financially sustainable micro-finance institution for the poor.
2.4 Goals of Grameen Koota

 To reach the poorest families
 To reach and empower women
 To build a financially self-sufficient institution
 To ensure a positive, measurable impact on the lives the poor and their families.
 To reach 30,000 poor families by the year 2005
 To break even financially by the year 2004
Grameen koota align its goals with those of the World Micro-Credit Summit Campaign.
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2.5 Area of operation
Grameen Koota operates in Karanataka state which is located in south India. Grameen Koota's
Head office is located in Avalahalli, Bangalore South Taluk and its ten branches are located at
Kaggalipura, Kanakapura, Channapatana, Halagur, Malavalli, Chikkanayakanahalli, Turuvekere,
Chelur, Gubbi, Tiptur, We plan to open ten more branches by the year 2005.
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CHAPTER 3
3.1 Definition of Star borrower
The Definition has three aspects to it, namely the Economic aspect, the Social aspect and the
Financier aspect
3.1.1 Economic Aspect

A member of Grameen Koota who has utilised the Grameen Koota Loan in productive purposes
in such a manner that her assets and income has increased appreciably to become financially
self-sufficient compared to fellow members.
3.1.2 Social Aspect

Empowered woman who has a positive impact on the life of her family
3.1.3 Financier's Aspect
A member of Grameen Koota who has repaid her loan instalments regularly and in time over the
previous loan cycles.
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CHAPTER 4
4.1 Checklist points
In identifying Star borrowers, we propose the following two checklists.
• Checklist A – which enables initial screening of the members based on guidelines set by
Grameen Koota in order to meet the minimum requirements
• Checklist B – this would involve in-depth interviews of the borrowers, wherein GK like
to access her financial and social status based on certain parameters, which were
designed in the field, based on the member’s position in the family and the society.
4.2 Form A
The various elements coming under the form A are as follows:
4.2.1 Four loan cycles
All borrowers start with a basic Grameen Koota Income Generating Loan. Most of the borrowers
will continue with this basic loan, cycle after cycle, without any difficulty, and meet all their
credit needs in the most satisfactory manner. But life does not proceed smoothly for any human
being, let alone the poor women. It is likely that some borrowers will run into serious problems,
and face difficulties, somewhere along the cycles of loans, in repaying the basic loan according
to its repayment schedule. That’s why to identify a star borrower it is important to look at
previous four loan cycles rather than to look at one or two loan cycles. In four loan cycles it is
feasible to study the impact of Grameen Koota loans on the economic, financial, political and
social sphere of member’s life. To consider a member for an individual higher loan, it is essential
to see the behaviour and relationship of member with Grameen Koota over a justifiable period of
time. For Grameen Koota, it is important that it should see the financial and social impact over
this period and identify the exceptional performer who has performed in various walks of life
with the support of previous loans.
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4.2.2 Attendance in the Kendra meeting
Usually the group members who do not attend the Kendra meeting regularly have no respect for
Kendra or the organisation. The absence makes group members to forget the rules and
regulations of the group. The group members who remain absent from the Kendra meetings are
reluctant to pay instalments. Thus, the irregularity in Attendance in a group influences the
repayment. The practice of irregular attendance keeps the loanee isolated from the group
members. It affects adversely mutual relationship among group members and group solidarity. It
weakens group cohesion causing absence of peer pressure. Motivation for unity or group
solidarity does not become effective. Absent member remains ignorant about development
issues. They find no interest in-group activities and become careless about the rules and
regulations of the group. In such circumstances, the group cannot perform the role to solve any
problem.
The other issue is the “repayments through others”. It is also observed that some Kendra
members remain absent from the weekly meetings and pay instalments through others. It
encourages the other group members to follow the practice, which leads to indiscipline in the
group. Those who practise paying through others sometimes create a communication gap among
members. The importance of the Kendra meetings decreases with the declining rate of
attendance.
Thus, attendance is an important indicator for a member regarding group solidarity and
adherence to rules and regulation formulated by Grameen Koota. Grameen Koota is recording all
the attendance on papers as well as on system. The attendance of each and every member can be
traced. Having discussion with Area Manager, the attendance of 90% and above is considered
good for smooth function of Kendra. So, for identifying a Star borrower, the attendance of 98%
is taken which was later reconsidered to be 95% after field-testing of questionnaire/ checklist.
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4.2.3 Loan utilisation
The loan utilisation refers to the way the loanee group member utilises the amount of loan
received from Grameen Koota. Grameen Koota disburses loans to rural poor women for
implementation of income generating activities and thus creation of self-employment. It is found
(source: Causes of default in micro credit, ASA) that before investment the loanee cannot chalk
out a plan to utilise the money in a profitable way. For the lack of planning, the credit amount is
not utilised in productive sector. Some are found to spend a considerable amount to meet
emergency expenditure such as marriage, medical treatment etc. The loanees also spend a
considerable amount to meet the daily family expenses. Hence, the loanees cannot manage to
make payment of instalments. Kendra Manager does the loan utilisation check on first week and
every twelfth week thereafter for every loan issued by Grameen Koota. The loan utilisation is
done with a purpose to ensure that loan is spent on productive purpose rather than household
consumption so that member earnings increases and strives to come out of vicious cycle of
poverty. In the process to identify star borrower, this parameter has been taken to ensure that the
borrower should not have used the loan for other than the stated purpose.
4.2.4 Voluntary savings
Grameen Koota is having a saving product where the members can put their hard-earned savings
with the organisation. This service is termed as voluntary savings. There needs to be a fine
balance between the savings and investment, a critical amount of money needs to be put as a
savings for contingency purposes and the other amount should be utilised in the business. Taking
this point into consideration of Grameen Koota, member must have a minimum amount of
savings with them in her saving account. This shows that the members are having confidence in
the organisation and they are ready to meet any contingencies in the future with the help of
Grameen Koota. It also shows that the member has capability to save apart from her loan
instalments and compulsory savings. During the visit to the Kendra’s it came to our notice that
generally all the members who are in the fourth loan cycle have the tendency to save with the
organisation. We have in consultation with the staff posted at Kendra’s and head office kept the
minimum limit of saving at Rs 50.
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4.2.5 Irregularity in payment
Irregularity of the repayment is the failure to repay in due times a debt/loan extended as per
written or verbal agreement between the debtor and creditor. If member is unable to repay the
instalments on her own the Kendra Manager will ensure the loan repayment from the member
group. The loanee member cannot derive any income at the very moment she invests the amount.
If the family does not possess property or other source of income, there is the tendency of default
in the loan cycle. In the absence of family property or assets, the source of income becomes
limited. The family passes days in hardships. Due to crisis she cannot devote full attention to her
work, as she cannot meet the family needs. To cope up with the situation, she spends from the
loan amount. In consequence she fails to pay the instalments regularly. In identifying the star
borrowers the member should be one who is repaying her instalments in due time as per
agreements with Grameen Koota. Her timely repayments are the indicators of her earnings in the
business activity, compliance with the rules formulated, and creditworthiness of the member to
be considered for higher and individual loans.
4.2.6 Migration
Group members having the tendency to migrate do not give importance to the group activities.
This leads to decrease in the attendance. They remain absent and default on payments. To avoid
such kind of member to be included as star borrower, the parameter of migration is taken in to
consideration. The member client who has history of migrating to other district and state for
continuous three months will not be eligible as a star borrower. It is also found out that the group
members who want to migrate from the place will not take further loan/services from the micro
finance institution. Hence, institution has to look for replacement and this involves further
painful work to identify a new member.
4.2.7 Absence without intimation
There should not be any case where the member has absented herself without intimating her
fellow group members. This indicates that the member believes in and has internalised the rules
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and norms of the organisation and understands her responsibilities as a group member of the
Kendra. Absence without intimation is recorded in Kendra attendance as “A” and can be traced
for every member of Grameen Koota.
4.3 Form B
Form B incorporates the impact of Grameen Koota’ loan on the member and her household. It
tries to measure and quantify the impact on following three heads:
I Economic Impact
i. Increase in income
ii. Savings of member
iii. Increase in Assets
II Social Impact
III Standard of living
4.3.1 Economic impact
The various elements coming under the head economic aspect are as follows:
4.3.1.1 Increase in income
The investment made by the member from Grameen Koota Income Generating Loan during the
past four loan cycles appear to have been extremely productive and have contributed
significantly in improving household income, outputs and consumption. This conclusion is
supported by the case studies as well as by the statements and repayment records of loanee
themselves. The income increase from the entrepreneurial activity signifies the coming out of
member from the vicious cycle of exploitation by the private credit channel. Grameen Koota has
helped the members to become an entrepreneur from a labourer by providing them the timely
credit so that they could work for themselves instead for others, they could retain much of the
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surplus generated by their labour appropriated by others. Many members have significantly
increased their income by shifting out of traditional, low productive activities into high yielding
lines. The increase in the income is one of the most important indicators to assess the impact of
Grameen Koota in past four years. It also shows whether the loans have been used by member
effectively and efficiently compared to others. The increase is being calculated in terms of
percentages with the reference to the income of the household before joining Grameen Koota.
4.3.1.2 Savings of member
The productive use of credit is not sufficient condition for remarkable record of repayment,
especially for the poorest segments of the rural populations. The propensity to save weekly and
repay on time is latent and unique factor of repayment. Grameen Koota has incorporated a
variety of savings products in the system. The members are encouraged to save even before
giving credit during the Compulsory Group Training. The savings of member during a year is an
indication of her repayment capability if she is given a higher and individual loan. For a star
borrower the saving propensity at the household level should be high so as to meet contingencies
and plough back money saved back in the entrepreneur activity and generating assets. . Access
to savings facilities also plays a key part in enabling the poor to smooth their consumption
expenditures, and in financing investments, which improve productivity in agriculture and other
economic activities.
4.3.1.3 Increase in Assets
A noteworthy feature of GK operations is the stress laid on the self-reliance by strengthening

propensity to save and increase in their asset/capital base. Most of the members have increased
the capital base over a period of various loan cycles if we compare their asset base before joining
GK and present time. But some of them have done remarkably well compared to fellow members
who are needed to be identified as star borrowers. The asset provides a member being a sense of
belongingness and represents a symbol of her hard work. It is the most important parameter in
identifying the star borrower as it also represents her acumen in investing her saving for
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unexpected bad times and secure their future. The member who has assets pays instalments
regularly even in the lean period of income without facing any difficulties. Some informal
information on the utilisation of increased incomes is obtained by the course of field visits,
which shows that a high proportion of additional income is saved and used in increase in assets.
According to members and Kendra Manager, the earnings are used for buying utensils, clothes
for children, school books, cows, buffalo, goats, a new door for house, construction and
improvements in house, buy jewellery, vehicle such as bicycle and pulling cart, radio and
television. We have considered amount spent in the marriage as “Social assets” because in few
cases members have spent their great deal of savings in marrying their daughters and sons.
Marriage is still one of the top priorities which have to be incurred to be socially acceptable in
the society. It is apparent that an expenditure of marriage can impose a crushing burden on a poor
family. So, the members do not invest their savings in fixed asset rather are inclined to invest in
social asset like marriage. Few members put their saving in bank account or keep with them as
cash. There have been members who are investing savings in chit funds informally run within the
village or neighbours. For identifying star borrower the following heads to gauge the increase in
assets have been taken:
i. Land
ii. Animal
iii. Jewellery
iv. Movable Asset
v. Cash
vi. Amount spent in Marriage
vii. Other Savings (like chit fund)
4.3.2 Social Impact

i. A better breakdown position
ii. A clearer perception on the part of the woman of her own individuality and her own
interests
iii. A clearer perception on her part as well as on her family of her contribution to the joint
welfare of the household
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Amartya K. Sen defines breakdown position as the outcome when two people who ordinarily
cooperate suddenly fail to do so; it has also been called “the status quo position”. Ideally the
income generating activity reduces the woman’s vulnerability in the event of breakdown. As a
member of Grameen Koota, she attends the weekly meetings and sometimes the SED
workshop that compels her to develop a better understanding of her welfare as distinct from
that of her family and the interdependence between the two. Her self-confidence grows as
total strangers demonstrate their faith in her by lending her money. Her involvement in a
business venture/entrepreneur gives her and her household a quantifiable idea of her
contribution to the family’s economic fortune. This increased self-confidence is accompanied
by an improvement in the attitude of men since their wives join the Grameen Koota.
4.3.2.1 Breakdown Position
Grameen Koota grants women access to resources previously out of reach and places cash
directly in their hands. The Kendra Managers carefully assess the economic viability of a
proposed project before it gives out a loan to keep the possibility of losses and shocks to the
borrower’s self-confidence to a minimum. They regularly visit the homes of the borrowers to
ascertain that the money is being used by member for stated purpose. An independent source
of income assures a female member that she is no longer as financially dependent on her
husband and contributes to her self-confidence and sense of individuality. A woman who
contributes to a family income is no longer viewed as economic burden.
4.3.2.2Perception of own individuality
The condition of women particularly in the region where Grameen Koota is working is really
pathetic. Women in these areas feel helpless because of their retrograde position. Grameen
Koota tries to overcome this by discussing with the women issues of importance to them and
their families in workshops and at weekly meetings. The organisation feels that the lack of
institutional education should not serve as an obstacle in women’s attempt to forge a better
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life for herself and her family. The organisation tries to give the members information about
their nutritional and health care needs and women’s issue of dowry and contraception. Thus
their command of this knowledge tends to have a mixed effect on their relations with male
kin.
Most members cannot afford the costly allopathic medicines but they have the good
knowledge of home made medicines. Grameen Koota encourages the members to use
indigenous remedies that have been successfully tried and tested. The support of Grameen
Koota instils in the women a sense of confidence as they take care of their family. Member’s
husband too tends to trust their treatment more and also the respect for the wife increases in
the mind of husband in the area of nutrition and hygiene.
Women also appreciate the opportunity to, for the first time to mange their own funds. It
installs in them the feeling of responsibility and service for the society, community, family
and for themselves. Thus this puts in them a growing sense of the self and of confidence in
one’s ability to deal with money and with outsiders-despite all social conditioning to the
contrary.
4.3.2.3 Perception of contribution
The first priority for women in the region where Grameen Koota is operating is food for
family, and then she spends rest on her husband and on school fees, clothes, gifts for married
daughters and grand children’s. She considers buying for herself a sari and other personal
items only after she has fulfilled other obligations such as returning favours to neighbours and
relatives. So for the members most important thing is to have a “perception of contribution”
feeling that she has became economically independent from her in-laws and other people who
considers her worthless, good for nothing scrounger. It is true that Grameen Koota member
earn less than what they might have been earning if working as wage labourer but the societal
condition is such that women would prefer to stay indoors and hence Grameen Koota is the
best option. One of the important reasons for strife within household is that her relative’s feels
excluded from the credit process. But Grameen Koota keeps a point of this by inviting the
male members for attending orientation meeting. In the meeting the members and their
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husband have an opportunity to ask questions about the bank and its philosophy, making the
whole process more transparent and open.
Thus may be the organisation is disbursing very meagre amount as loan, but then also it can’t
be described as insignificant. In the midst of such dire need, every bit of income helps. Well-
established centres encourage their members to undertake collective ventures, which yield
greater returns and might make a greater impact on familial relations.
Grameen credit gives high priority on building social capital. It is promoted through
formation of groups and centres, developing leadership quality through election of Kendra
leaders, electing board members. To develop a social agenda owned by the borrowers, it
undertakes a process of intensive discussion among the borrowers, and encourages them to
take these decisions seriously and implement them. The Kendra meetings and activities
provide a vehicle for the participation of individuals in the functioning of Grameen Koota.
The member plays an important role in MFI and this role is likely to enhance with their
increased capacity for organisation and management. The members are encouraged to believe
that the Grameen Koota is their own organisation and its success depends upon the behaviour
of the member. Furthermore, six persons on the Board of Governors of the Grameen Koota
represent them. This gives them an opportunity through representative to make their views
known at the highest policy-making organ of the GK. Apart from Kendra meetings, the area
SED workshops provide another occasion for exchange of views and come out to see the
world beyond their village boundaries.
It is very difficult to quantify the social impact on the member and her household by any
mathematical tool. For the sake of simplicity and convenience of the field staff, a three point
metric scale has been used under the following heads:
i. Education of the children

ii. Family Planning
iii. Member’s participation in discussions on problems at Kendra meeting
iv. Member’s participation in social and political activities like electoral/functions etc.
21
v. Insurance
vi. Any other Debt Amount
4.3.2.4 Education of the children
Education forms the core issue when we talk about the social upliftment. It stands ahead of
many other social parameters especially when we are talking about female literacy because
if a woman is taught how to read and write, in turn we are making a whole family literate.
With their superior resources, such as credit resources, technical staffs, physical assets,
Grameen Koota have become a new life giver for the ultra poor and needy people in the
villages. The desire to get credit for individual economic development and improvement
leads a villager to join a loan group. Here in Grameen Koota it is preferred that in addition
of improving their economic condition; the members should also work in improving their
condition socially. We have considered star borrowers, as those members who have paid
adequate attention towards making themselves and their family members be their children
or husband literate. These star borrowers are aware of the fact that education is such an
excellent tool in their hand that can change their destiny for the times to come.
4.3.2.5 Family planning
There is unanimity among all the researcher of the world that contraceptive use, knowledge
of contraceptive methods and their sources, and the desire for no more children were higher
among the population who have joined one or other microfinance organisation. It is general
trend that population-education components and other socio-economic improvement efforts
for the beneficiaries increase their level of demand for contraceptive. Access to family
planning and contraceptive services has altered social and economic roles of women. Large
family and uneven high growth rate also affects the health of women adversely, which make
them physically as well mentally ill in the long run. Family planning has provided health
benefits such as smaller family size and longer interval between the birth of children;
increased opportunities for preconception counselling and screening. Here in identifying the
22
star borrowers we have taken this issue as one of the most important one for our
consideration. For us star borrower would be those, which have taken adequate care of
restricting their family to the level of sustainability. These star borrowers should have
worked in developing social system that provides information, clinical services, and
contraceptives to help individuals or couples in determining the number and spacing of
children they want to have. These members should have done some conscious effort in
regulating the number and spacing of births through artificial and natural methods of
contraception.
4.3.2.6 Member’s participation in discussions on problems at Kendra meeting
Grameen Koota is providing a mechanism of drawing poor women out of their traditional
female confinement within the households. The members are participating in the Kendra
meetings and this is giving them a way of expressing their opinion about how they think of
various issues. Grameen Koota wants to provide them with a changed social organisational
set up capable of producing opportunities for female self–employment and female self-
generating activities. We think star borrowers are that who’s Relationships with
organisation is built around a framework of collective participation based on genuine
partnership. We think this will lead in making a substantial contribution to the success of
their enterprises.
4.3.2.7 Member’s participation in social and political activities likes electoral/functions
It is important for any person to be aware of his rights and duties. This can vary in diverse
fields. Here in Grameen Koota it is preferred that the member after joining organisation
should have became more aware with what’s happening in and around her working
periphery. “Conscientization efforts” play a very important role for this. The term,
“Conscientization efforts” conveys the social mobilisation components of the core credit
programme. Although, now-a-days, increasing emphasis is put on social components, these
23
remain essentially subsidiary to the main objective of raising incomes and self-employment
through provision of credit. There can be many activities, which indicate their awareness
like taking part in electoral process, showing their presence in other village level activities,
promoting social reforms etc. We have considered star borrower as those, which have been
able to transform their individual-weakness into collective power and prestige after joining
Grameen Koota and completing their four loan cycles. Infact they should have been able to
change condition in the positive direction to such an extent that, the rural poor can now use
the name of GK as a local word, displaying proudly their association with the organisation.
4.3.2.8 Insurance
Insurance is another product which can be very handy for the poor and ultra poor of the
villages. Grameen Koota is consciously trying to help its member by providing them with
the insurance specifically life and cattle insurance so that it can be beneficial for the
member in time of some calamity or wrongdoing. Insurance for Grameen Koota is a way by
which member should have a financial protection against the losses. Member as a Star
borrower must be aware of the fruits of getting insured. They should have supported and
actively taken part in the service of insurance offered by Grameen Koota. We have further
tried to analyse this issue by taking separately cattle insurance and life insurance, as star
borrower must be able to visualise these two services in their holistic form.
4.3.2.9 Any other Debt Amount
Whether member is still taking debt even after joining Grameen Koota is an important
point, which should be taken into consideration while deciding about the star borrowers.
Grameen Koota is working on the policy that its member should be debt free and away
from the clutches of traditional money lending institutions like moneylenders. Star
borrower should be able to raise themselves to such an extent that they can withstand any
24
resistance from the local interest clamouring traders who have always been the bane of
contention for the poor people of village.
4.3.3 Standard of living
In principle standard of living denotes measure of the level of existence that a particular
member enjoy and also the measure of the availability of necessities and luxuries to that
particular member. It also includes the level of material well being of an individual and
simultaneously the amount of goods and services that people can afford to buy with their
income. During our assignment of designing tools and parameters to identify star
borrowers we have taken this perspective in greater length, as this for us is an important
parameter. To give this parameter due importance we have divided it into five heads and
have dealt with it separately. These heads are:
1) Electricity connection
2) Water supply
3) Basic sanitation facilities
4) Method of cooking food
5) Some basic luxuries of life like T.V., Radio etc
We have chosen these sub heads for determining the standard of living for the members as
we think that in the changing facets of time these are basic amenities, which determine how
well a person is placed in her life. Transformation in the life of member can be easily
visualised by the change in the living of the member and its family. Grameen Koota always
wants that its member should improve their standard of living appreciably because it’s
ultimately the life of the member and its family that should be improved positively with
association of Grameen Koota. Member and her family should have electricity connection
and adequate water supply because these determine the economic well being of the member
and their family. It is necessary in our thinking that the star borrower should have
continuous water supply and electricity connection in their house. This also determines
25
what is the overall quality of the life that the concerned population experience. We while
finding star borrowers are pretty sure that they will be having high standard of living. Basic
sanitation facilities and way the member is cooking food in their household is another
crucial indicator determining the standard of living. These factors directly affect the life and
health of member and their family. We want that star borrower should have basic sanitation
facility in their household and simultaneously it would be considered positive if the
member is using gas for cooking purpose because it will do a lot of good for the health of
member as compared to the use of chimney or stove. Television and radio are some of the
things in the life which we think a star borrower should be able to afford because after
going through four loan cycles of Grameen Koota the able member should get at least some
sort of financial stability which can be gauged by the presence of television, radio etc in her
household.
4.4 Weight age
We have assigned different weightage to different heads because we think they vary
differently in relation among themselves when finding star borrowers. First of all we have
divided our basic parameters in three parts financial, social and a combination of both. In
financial head we have put increase in income, annual savings and increase in assets with
total weightage of 65%. In social head we have put increase in social status with a
weightage of 20% and the third one as increase in standard of living with the weightage of
15%.
The reason for giving highest i.e. 65 points to financial parameters is that after going
through literature review, doing the pilot testing and meeting various people working in this
field, we got the inference that financial parameter are the drivers of whole exercise. We
think that they constitute the basic things, bare minimum required for a business to go. We
also feels that these are the points on which we can get truly reliable, measurable and valid
answer and so we would be able to get a clearer and true picture
26
Second in the order is social status because only financial one will not give us the complete
picture. The reason for allocating 20 points to this head is that these are difficult to measure
and considering the understanding of Kendra Manager and members it is difficult to assess.
We need to see through these social factors also, finally these are the points on which the
individual should improve and this is what is also required by the organisation
The third head we have taken is increase in standard of living. According to us this is also
an important parameter but we have given it least weightage i.e. 15 points, because we
think if the member is coming good on financial and social head then this would be
adequately visible in her standard of living.
4.4.1Financial parameter
In this we have given the maximum weightage to increase in assets as this was the single
most important point which came out of the pilot tests. A person, to whom the loan is given,
gives utmost importance in building up of their assets. Second in the order is increase in
income because if the borrower has adequately and correctly utilised the loan then it should
be necessary reflected through his income change. Sometimes but in fewer cases the
individual we have seen is also interested in increasing her saving and that’s why we have
incorporated the point of savings in our parameter list.
4.4.2 Social parameter:
As we have mentioned above that social status is also very much important. So we have
tried to judge it by the ratings given to various heads like education, health, insurance etc
before and after joining of Grameen Koota. This will help us in gauging, how socially a
borrower has improved.
27
4.4.3 Increase in status of living
This factor is taken so as to get the assessment of the borrower that how she has fared in
lasts four loan cycles. This will give us practical insight about the real improvement
happened in her life.
Finally all these weightage and the cut-off scores are decided after going through pilot tests
and taking into consideration the prevalent ground conditions of Grameen Koota’s
operating area. The cut-off score for the Star borrower is considered to be 45
4.4.4 Increase in Income (multiplying factor 5) 25

0) increase in income less than 10% or decrease in income
1) increase in income between 10% to 20%
2) increase in income between 21 %over 50%
3) increase in income between 51% and 75%
5) increase in income over 100%
In course of 4 loan cycles (approx. 5 years), it is expected from the member to double her
income at her household income considering the inflation and devaluation of rupee. It is
considered that the value of Indian rupee becomes half in 5 five years considering the
purchasing power i.e. what one could purchase five years back will cost you double in
present time. So, the poor member who is doubling her income in period of 4 loan cycles will
get the maximum score of 25 in the category of increase in income. If the member has
increased her income by just 10% or decreased her income, considering the purpose of loans
in 4 loan cycles the very purpose of providing timely and doorstep credit is defeated. So, she
will get the minimum score of zero in that case. In between zero to twenty five the scale has
been divided in five intervals.
28
4.4.5 Annual Savings at the household level (Multiplying Factor 2) 8
0) No Saving or Deficit
1) Less Rs2,000 saving
2) Between Rs.2,000 to Rs5,000 saving
4) Over Rs10,000 saving
As the star borrowers will be considered for individual and higher loan, it is essential that the
member should have ability and capability to save by curbing the unnecessary household
expenses. Annual savings at household shows the money is saved for future contingent
expenditure. Considering the situation of the various households and assessing poverty, we
arrived at the conclusion that if a member is saving Rs. 10,000 or over she will get the
maximum points i.e.8. At the other extreme if the member’s savings are negative (deficit) or
no savings then she will get the minimum points i.e. zero. The scale has been divided in 4
intervals.
4.4.6Increase in assets 32
i. Land/House (Multiplying Factor 1.50)
ii. Animal (Multiplying Factor 0.66)
iii. Jewellery (Multiplying Factor 0.66)
iv. Movable Asset (Multiplying Factor 0.66)
v. Cash (Multiplying Factor 1.50)
vi. Amount spent in Marriage (Multiplying Factor 1.50)
vii. Other Savings (like chit fund) (Multiplying Factor 1.50)
Increase in assets is the indicators of her intelligence in terms of putting her savings to
generate further income, get her own shelter, social assets (marriage), and other savings.
The scale of land/house, cash, amount spent in marriage and other cash savings (like chit
fund) has maximum ceiling of Rs.25, 000 by looking at the current scenario of amount
spent on these heads. The scale of Animal, Jewellery and Movable assets has maximum
ceiling of Rs.10, 000 by looking at the current scenario of amount spent on these heads.
29
That’s why the weightage of land/house, cash, amount spent in marriage and other cash
savings (like chit fund) has been made 2.25 times that of Animal, Jewellery and Movable
assets heads approximately as much as the upper heads. Even some of members have put up
higher amounts in one particular heads shows either the member is not poor and can be
linked to formal banks or she is not hedging the amounts in different heads.
4.4.7Increase in social status 20

i. Education of the children (Multiplying Factor 1.66)
ii. Family Planning (Multiplying Factor 1.66)
iii. Member’s participates in discussions on problems at Kendra meeting
(Multiplying Factor 1.66)
v. Insurance (Multiplying Factor 1.66)
vi. Any other Debt Amount (Multiplying Factor 1.66)
All the elements under the head “increase in the social status” are considered equal. The
scale of the all the elements has been divided in two intervals making it three points scale.
Thus the maximum possible change in scale ticked is 12. The member who gets these 12
points will get the maximum score of 20 by multiplying it by 1.66.
4.4.8Increase in Standard of living 15

i. Electricity (Multiplying Factor 1.50)
ii. Water Supply (Multiplying Factor 1.50)
iii. Toilet (Multiplying Factor 1.50)
iv. Cooking (Multiplying Factor 1.50)
v. Radio/TV (Multiplying Factor 1.50)
Again, as like increase in social status, all the elements under the head of “increase in the
Standard of living” are considered equal. The scale of all the elements has been divided in
two intervals making it three points scale. Thus the maximum possible change in scale
30
ticked is 10. The member who gets these 10 points will get the maximum score of 20 by
multiplying it by 1.50.
Total 100
31
Annexure-1
To be filled by Kendra Manager
Form No. A (Checklist A)
1. Kendra name and no.

2. Group no.
3. Name of the member
4. Area no.
Check Points
1. Whether a minimum of 4 loan cycles have been completed by Member (Name mentioned
above) Yes / No
2. Whether the attendance of member in Kendra meetings is more than 95.00%
Yes /
No
3. Has the member anytime used the loan for other than the stated purpose
Yes /
No
4. Whether the average voluntary savings of the member has ever been less than Rs 50 after
completion of first year. (Purpose: Do members save in Voluntary savings after obtaining
loan from Grameen Koota) Yes / No
5. Is there any case of irregularity in the loan repayment in past loan cycles (Exception:
Case of natural calamity for the whole Kendra) Yes / No
6. Whether the member or her husband has a previous history of migrating to other districts
or states for employment for more than 3 months in previous loan cycles.
Yes /
No
7. Is there any case where the member has absented herself without intimating her fellow
group members Yes / No
Result:
If the answer of Question no. 1 and 2 is YES and answer to Question no. 3 to 7 is NO, the
member is recommended for form B.
Member is recommended for form B: Recommended / Not recommended
32
Remarks:
Signature:
Name of Kendra Manager:
Date:
Annexure-2
To be filled by Kendra Manager
Form B
1. Kendra name and no.

2. Group no.
3. Name of the member
4. Area no.
5. Activity in which Member is involved
Unit of Analysis: Individual/Household

1. No. of members in family
2. Family profile:
S No. Member Name Age Occupation Annual Earnings

(Rs.)
1.
2.
3.
4.
5.
6.
7.
8.
9.
Any other source of income (If yes, please
specify earnings)
i. Total Household Income
ii. Household Income before joining Grameen Koota (from MBDF) Rs._________
iii. Increase in Income: Rs.__________
3. Household Expenditure (Annually)
S No. Particular Expenditure (Rs.)

1. Food
2. Housing
3. Clothing
4. Sanitation
33
5. Education
6. Religious/social functions
7. Others
Total household
Expenditure
34
4. Assets Increase in last loan cycles (Increase in Capital Base):
Please Tick the appropriate option
viii. Land/ House
0) Not invested
1) Less Rs5,000 invested
2) Between Rs.5,000 to Rs10,000 invested
3) Between Rs.10000 to Rs25000 invested
4) over Rs25000 invested
ix. Animal
0) Not invested
4) Over Rs10,000 invested,
x. Jewellery
0) Not invested
4) Over Rs10,000 invested,
xi. Movable Asset

0) Not invested
1) Bicycle/Pulling Cart
2) Moped
3) Old Scooter/Motorcycle/Auto
4) New Scooter/Motorcycle/Auto
xii. Cash/Bank
0) Not invested
4) over Rs25000 invested
xiii. Amount spent in Marriage

0) Not invested
4) Over Rs25000 invested
35
xiv. Other Savings (like chit fund)
0) Not invested
4) Over Rs25000 invested
5. Social Indicators:
Please, Fill the boxes 1, 2 or 3 appropriately
S Indicators Before Presently

No. joining GK
1. Education of the children (3-all going to school, 2-
atleast one but not all going to school, 1-none going
to school)
2. Family Planning (3-Having less than two children, 2-
Having three or four children ,1-Having more than
four children)
3. Member’s participates in discussions on problems at
Kendra meeting (3-Regularly, 2-Occasionally,
1-Never)
4. Member’s participation in social and political
activities like electoral/functions etc. (3-cast vote
regularly, 2- cast vote occasionally, 1- do not cast
vote)
5. Insurance (3- Taken both Member’s life and cattle
insurance, 2- Taken any of Member’s life or cattle
insurance, 1- None of Member’s life and cattle
insurance)
6. Any other Debt (3-No Debt, 2-Debt Amount less than
Rs.10,000, 1-Debt Amount more than Rs.10,000
Total
Change in Member’s Social Status {plus (+) change in indicator represents increase in
social status, Negative (-) change in indicator represents decrease in social status}
Change in member social status
36
6. Standard of living:
Please, Fill the boxes 1, 2 or 3 appropriately
S. Indicators Before Presently

No. joining GK
1. Electricity (3-yes, 2-Shared,1-No)
2. Water Supply (3-Own,2- Nearby community
Tap/Well,1-Fetching from nearby village)
3. Toilet (3-pit, 2-Flush,1-Open Area)
4. Cooking (3-Gas, 2-Kerosin Oil, 1-Wood/others)
5. Radio/ T.V.(3-TV, 2-Radio, 1-None)
Total
Change in Member’s Standard of living {plus (+) change in indicator represents

increase in social status, Negative (-) change in indicator represents decrease in
social status}
Change in Member’s Standard of living

Remarks:
Signature:
Name of Kendra Manager:

Date:
________________________________________________________________________
To be filled by Branch Manager To be filled by Area Manager
Remarks: Remarks:
Signature: Signature:
Name of Branch Manager: Name of Area Manager:

Date: Date:
37
Annexure-3
Confidential
Calculation Sheet for STAR BORROWER
To be filled by Operation Manager
1) Kendra name and no.

2) Group no.
3) Name of the member
4) Area no.
Complete the calculations as follows:
Change in income (2-iii)

Increase in income = ----------------------------------------------------------------------X 100
Household Income before joining GK (from MBDF)(2-ii)
=________ %
A) Increase in Income (Tick the point appropriately as per above Calculation):

Annual Savings at the household level =
Total annual Household Income (2-i) - Annual household expenditure (3)
B) Annual Savings at the household level (Tick the point appropriately as per above
Calculation):
38
SCORE SHEET
S. No. Parameter Scale Multiplicati Points Maximum

Ticked on Factor Obtained points
A Increase in Income 5.00 25.00
(Between 0 to 5)
B Annual Savings at the 2.00 8.00
household level
(Between 0 to 4)
4-I Land/House 1.50 6.00
(Between 0 to 4)
Ii Animal 0.66 2.66
(Between 0 to 4)
Iii Jewellery 0.66 2.66
(Between 0 to 4)
Iv Movable Asset 0.66 2.66
(Between 0 to 4)
V Cash 1.50 6.00
(Between 0 to 4)
Vi Amount spent in 1.50 6.00
Marriage
(Between 0 to 4)
Vii Other Savings (like chit 1.50 6.00
fund)
(Between 0 to 4)
5 Increase in social status 1.66 20.00
(Between 0 to 12)
6 Increase in Standard of 1.50 15.00
living
(Between 0 to 10)
Total Points 100.00
Result:
If the score of the member borrower is equal or greater then 45.00 then she is considered as star
borrower.
Member is considered as Star borrower YES or NO
Remarks for the member:
Signature:
Name of Operation Manager:
Date:
39
Annexure-4
Weightage
Increase in Income (multiplying factor 5) 25
Annual Savings at the household level (Multiplying Factor 2) 8

Increase in assets 32
i. Land/House (Multiplying Factor 1.50)
ii. Animal (Multiplying Factor 0.66)
iii. Jewellery (Multiplying Factor 0.66)
iv. Movable Asset (Multiplying Factor 0.66)
v. Cash (Multiplying Factor 1.50)
vi. Amount spent in Marriage (Multiplying Factor 1.50)
vii. Other Savings (like chit fund) (Multiplying Factor 1.50)
Increase in social status 20

i. Education of the children (Multiplying Factor 1.66)
ii. Family Planning (Multiplying Factor 1.66)
iii. Member’s participates in discussions on problems at Kendra meeting
v. Insurance (Multiplying Factor 1.66)
vi. Any other Debt Amount (Multiplying Factor 1.66)
Increase in Standard of living 15

i. Electricity (Multiplying Factor 1.50)
ii. Water Supply (Multiplying Factor 1.50)
iii. Toilet (Multiplying Factor 1.50)
iv. Cooking (Multiplying Factor 1.50)
v. Radio/TV (Multiplying Factor 1.50)
Total 100
40
Annexure 5
Case study-1
Kendra: Avalahalli
Branch: Kaggalipura
Name: Nazimunisa (45-48)
Husband Name: Riaz Khan (36-38)
Daughter: Shameem Taj (18-19)
Member’s father and mother had a total of 8 children, 4 of whom passed away at a young
age. Currently, there are two sons and two daughters. Father had 2.5 acres of land, which he
used for agriculture. He grew ragi. Mother was a daily wage labourer, working with stones.
After their first daughter got married, Naz was married at age 14. Her husband’s age at
marriage was 18. After marriage, Riaz spent many years doing various types of work in
different places. After marriage, Nazimunisa’s trade was making incense, having hired 100
workers. They gave Rs100 advance to workers, and paid them Rs.10 for 1,000 incense sticks
made. They put Rs.3, 000 into their business, earning 1 lakh in return after 3 – 4 years. At the
same time, her husband ran a small ration shop, investing Rs50, 000 into the business.
Although business was good, losses occurred later occurred in 1997 due to the young
workers they had hired. He hired workers to help him in his store, paying each Rs1, 200 per
month. The deposit for the ration shop increased this year. She invested Rs50, 000 into the
ration shop, from which 1 lakh earned was put back into the ration shop.
She and her family used this money to purchase an auto rickshaw. Hired workers were
driving the auto. They put money into chit funds, with 40 members putting Rs.100 each per
month (total of Rs.4, 000 per month), but they lost the money that they had put into the chit
fund when two members of the CF, who had already taken their share of the chit, passed
away. As mentioned before, losses occurred in the ration shop, due to the young workers
who were hired. In order to pay off the CF, they sold her agarbathi business, the auto
rickshaw, and his ration shop. There was Rs.70, 000 remaining to be paid off, though.
41
Under the backdrop of such conditions she joined Grameen Koota in 1998. Using her first
loan of Rs.4, 000, she bought a sewing machine to start her own tailoring business at home.
Her business did very well. For one dress, she was charging Rs.60 – 70. With the money
earned, she put it back into her home and used it for her daughter’s education (9 th standard).
After household expenses and paying off her GK loan, she was left with an extra Rs. 300 –
400 per month. During this year, she took a GFL of Rs.300 for household consumption
purposes. Her husband was in Mumbai around three months before she joined GK to run a
small pan shop and was sending home Rs.2, 000 per month. She was also participating in chit
funds at this time. She used the Rs.2, 000 from her husband and the new CF money to slowly
pay off the remaining Rs.70, 000 from the previous CF.
Sometime in 2000, her husband moved back to Avalahalli after having worked in UAE,
Mumbai, she took her second Gk loan in 2000. She put this into her husband’s clothing store.
He bought clothing at wholesale prices and sold them in his store at a discount rate.
During this time, Nazimunisa’s elder sister’s son was married off. They estimate that they
spent Rs.27, 000 – Rs.28, 000 on his wedding. He moved to another house in Avalahalli.
During this year, she took a supplementary loan of Rs2, 000 for the clothing store and two
separate GFL of Rs.500 and Rs.600 (total of Rs.1, 100) to pay for electricity bills.
But in 2001 Nazimunisa could not take a GK loan. Her previous loan cycle concluded at the
end of the calendar year and due to absences in her Group, she was unable to take her third
GK loan until the beginning of the next year. Instead, she took a Supplementary Loan of
Rs.2, 000 for her husband’s cloth business. Additionally, she took three GFLs of Rs.1, 800,
Rs2, 500, and Rs.2, 200 (for a total of Rs6, 500). Later in 2002 she used her third GK loan of
Rs. 8,000 and once again used it for her husband’s clothing store. With the money earned
from the clothing store, they bought jewellery for their daughter, a fan for their home, and a
mixer grinder for their kitchen.
42
However, they decided to close the store due to the falling price of clothes, which would
make their business less profitable. They took back the Rs.10, 000 deposit paid on the
clothing store, sold off the remaining clothes in stock, and used the money to put an advance
on a small vegetable store in Avalahalli. They only had Rs.700 remaining at this time. They
used the Rs.700 to purchase a stock of vegetables for the store. However, due to their
inexperience, they only earned Rs.300 from sales, as most of the vegetables spoiled quickly.
The fourth GK loan of Rs.12, 000 was used to invest in the vegetable store. They bought a
refrigerator and stock for the store, including milk. Member took a GFL of Rs.2, 000 (the GF
total was Rs.14, 000) to replaced the roof of the store (as it would leak when it rained and
would spoil the produce). As the area developed, the real estate prices also increased. The
rent for the store increased to a total of Rs.25, 000 – they had to pay an extra Rs.15, 000
advance. This year, they paid Rs.22, 000 for their daughter’s studies towards a B.B.M.
(Bachelor’s in Business Management). The fifth GK loan for Rs.12, 000 was used to invest
in their vegetable shop. Admission fees for their daughter’s college education amounted to
about Rs.22, 000 for her first year of BBM (Bachelor in Business Management). With the
fees for the practical site visits, the total amount paid for her first year of college was
approximately Rs.30, 000.
This gives us ample leeway about how Nazimunisa has prospered since joining Grameen
Koota. The member as we saw above is progressive one and hence she is also having some
exciting and positive future plans for the time to come. These can be enumerated as:
Plans for the future: Her Daughter wants to complete her BBM and pursue further studies
(MBA). She is looking forward to build a house nearby their current residence, but there is a
land dispute being settled at present with the Bangalore development authority. She knows
that Grameen Koota cannot provide her directly with a loan large enough to build a house,
but would be interested in a housing loan. Her Husband wants to open a larger provision
store near where his vegetable store currently is, as the residential area has much potential for
development.
43
Household Assets
Item Value
Fan Rs.1,000 – Rs.1,500
TV Rs.10,000 – Rs.16,000
Wireless Phone Rs.12,000
Mixie Rs.1,200 – Rs.1,800
Stereo System Rs.2,500 – Rs.3,000
TV/Stereo Stand Rs.3,000
Bureau Rs.2,000 – Rs.3,000
Gas Stove Rs.1,200 – Rs.1,500
Sewing Machine Rs.4,000 – Rs.4,500
Cot Rs.1,500
Total Value: Rs.38, 400 – Rs.47, 800
1. Fan (value approx. Rs.1,000 – Rs.1,500)

2. TV: JVC Flat Screen approx. 29” (received/taken as payment-in kind from relatives in UAE,
as brother owed husband Rs.10,000)
3. Wireless Phone with caller ID and speakerphone (Tata Indicom) (value approx. Rs.12,000)
4. Mixie (value approx. Rs.1,200 – Rs. 1,800)
5. Stereo system: Panasonic, with radio, tape deck, and speakers (value approx. Rs. 2,500 –
Rs.3,000)
6. TV/Stereo stand: (approx. value Rs.3,000)
7. Bureau: (approx. value Rs.2,000 – Rs.3,000)
8. Gas Stove w/one cylinder: (approx. value: Rs.1,200 – Rs.1,500)
9. Sewing Machine: (approx. value Rs.4,000 – Rs.4,500)
10. Cot: (approx. value Rs.1,500)
Annexure 5
Case study –2
44
This case study is about another progressive member of Grameen Koota “Sabeera”. We have
tried to follow the life cycle approach. In this approach, we try to give description about
member and her life on a yearly basis. According to us this is a good approach to follow
because by this we can easily compare the change in the member’s life annually based on
different parameters required for a good and comfortable life.
Family Details:
Village: Avalahalli
Branch: Kaggalipura
Member’s Name: Sabeera (55)
Husband Name: Sayed Nazeer (65)
Sabeera’s parents had 3 sons and 2 daughters. All of her brothers and sisters are married. She
is the youngest one, so all family members looked after her well. While in 8 th standard (at age
12), she was married. She wanted to pursue further studies, but was not able to. After her
parents passed away, elder brothers looked after her. After 6 months of marriage, she and her
husband moved to Avalahalli from Shikharipura – she has lived in Avalahalli ever since, for
the past 40 years. Just after marriage, her brothers put together Rs1, 000 and bought her a
small hut in her name near Banashankari. For near about 20-24 years, she lived in a rented
house (hut) in Avalahalli. Her husband couldn’t pay for the rent, as he was an alcoholic. She
was forced to do coolie work (stone, mud, cement) and pawned her jewellery (earrings) off to
pay for the rent (Rs.20/month). Later she sold the hut in Banashankari in 1988 for Rs.6, 000
– she used half of it (Rs.3, 000) to purchase a site and the other half to build the small house
she currently lives in Avalahalli.
1975
After two years of marriage, her first son, Mukthyar, was born.
1977
After four years of marriage, her second son, Babu, was born.
45
1979 - 1983
Her husband was an alcoholic and couldn’t support the family, even though he was a stone
worker. Whatever wages he made, he never has to his wife and children – he only spent it on
himself and his drinking habits. Her husband’s employer took advantage of him, as he was
uneducated as well as an alcoholic, by informing her that her husband had taken a loan of
Rs.10, 000 for his stone work, but had used it for drinks instead. The employer took the
member, her two sons (age 2 and 4), her mother-in-law, and her husband to Magadi to do
stone work and pay off the “loan.” They were in Magadi for almost five years, during which
her third son, Ashuque, was born. Sabeera during these five years helped to pay off the loan
by cooking for 20 stone workers everyday. They went through very difficult times, as the
entire family (member, husband, and 3 sons) would wait to eat the leftovers after the 20
workers finished their meals. They did not have to pay rent during this time, as they stayed in
lodgings owned by the employer. Her mother-in-law made a living by making vadas and
bondas at home and selling them in the neighbourhood. She gave all of her earnings to
Sabeera and her family.
1983
After five years, the employer suddenly left Magadi. At the same time, her husband would
also disappear from Magadi for extended periods, presumably to work elsewhere and
continue his drinking habit. He would come and go as he pleased, never supporting his
family. As times became increasingly difficult, Sabeera and her children were forced to go to
temples to receive food. Sometimes, they would go into the fields and handpick greens just to
have something to eat. After struggling for one year with her mother-in-law and children,
Sabeera returned to Avalahalli. Soon after moving back to Avalahalli, Sabeera had her fourth
son, who died only after a few days. Their health was very poor at this time, due to
malnutrition – which she believes caused her son’s death. She did coolie work (carrying
stone) while her mother-in-law, made vadas and bondas at home and sold them in the
neighbourhood. Her mother-in-law was making Rs.20/day. Member’s elder brothers took
care of her, visiting her once a week and bringing food for her and her family.
46
1984 -1986
Sabeera gave birth to two girls, two years apart.
1987
Her three sons were going to work at a factory at age 12, 10, and 8. Although Sabeera wanted
to send her children to school, her husband didn’t allow her to, as he wanted their children to
go to work and earn money instead. He did not see the use of education.
1988
Member had her uterus removed when her youngest daughter was 2 years old.
During this year, she sold the hut/site at Banashankari for Rs.6, 000 and bought her current
site in Avalahalli for Rs.3, 000. As she couldn’t afford to pay workers to build the house, so
she helped to build the house herself. She built a house for Rs3, 000 (15 x 25), with a roof
made of small, hand-made, earthen tiles.
1992
In 1992, member replaced old roof with a metal sheet (estimated value at Rs2, 000), in
preparation for her first son’s wedding.
1993
Sabeera’s first two sons were earning Rs.50/day each; her third son was earning Rs.25/day.
They did odd jobs, such as building homes, working with mud and cement. Sabeera used this
income (Rs.125/day) for household/daily expenses. As previously, her mother-in-law had her
own small business operating from home, making Rs.50/day. Sabeera was doing coolie work,
earning about Rs.15/day.
In 1993, member put her earnings into an Rs30, 000 Chit Fund, in order to pay for her first
son’s wedding. As she was the last one to take the chit, she was able to take the maximum
Rs.30, 000. In addition to the wedding, she also purchased Rs.3, 000 worth of jewellery for
her daughter-in-law, but did not take any dowry from her family. Her daughter-in-law came
from a very poor family – her mother had left the family while she was young, her father was
47
an alcoholic, she was responsible for taking care of her younger brother and sister – she made
a living making incense. After marriage, her daughter-in-law continued to roll incense sticks
in Sabeera’s home, but Sabeera insisted that she not continue with this work after she became
pregnant in 1994. Her daughter-in-law was making about 2,500 incense sticks, earning
Rs.8/1,000 sticks. Her income was approximately Rs.20/day.
As in the past, Sabeera’s elder brothers used to visit almost weekly to help with the
household expenses. They would bring rations/food items and sometimes cash. It is estimated
that from her three brothers, approximately Rs.300/monthly was given to her household.
1994
As in 1993, her first two sons were earning Rs.50/day each; her third son was earning
Rs.25/day they did odd jobs, such as building homes, working with mud and cement. Sabeera
used this income (Rs.125/day) for household/daily expenses. Sabeera also continued her
coolie work and her mother-in-law continued with her small business. As their family had
expanded over the years (3 sons, 2 daughters, mother-in-law, daughter-in-law, member, and
sometimes husband), the household expenses also increased. The extra Rs.200-300 leftover
monthly was put into Chit Funds in Avalahalli.
1995
Sabeera’s first son had his first daughter. Although times were difficult, she still was able to
take Rs10, 000 from a chit fund and use the money to purchase a site next to her house for
her eldest daughter.
1996
She participated in a Rs35, 000 chit fund and Rs. 20,000 chit fund. During 1996, she finished
the Rs35, 000 chit fund and used the money to purchase more land at the same site she
bought the previous year for her daughter (15 x 20)
1997
48
On New Year’s Day, Sabeera’s first son had his second daughter. She married her second son
to her elder sister’s daughter, without asking for any dowry or having a grand wedding. She
completed the Rs20, 000 chit fund and used the money for her son’s wedding. She
participated in a Rs35, 000 chit fund again this year, but because her eldest daughter’s
wedding was in 15 days, she took the chit early and only received Rs30, 000 (Rs5, 000 loss).
She used Rs10, 000 of the chit for her daughter’s wedding in May and used the Rs.20, 000 to
build a house at the site purchased in1996 for her daughter.
1998
As she was in charge of the finances for the family (each son gave her his earnings, which
were used for the household/daily expenses of the entire family), the second daughter-in-law
wished to move out of the house with her second son and take their share of the earnings.
However, the second son refused to move out, as he wanted to stay with his family until his
younger brother and youngest sister were married. The second daughter-in-law brought a
case against the member, citing falsely that she had given Sabeera Rs1 lakh in dowry and
wanted it back. The Muslim community tribunal decided that Sabeera should pay her second
daughter-in-law Rs50, 000 as a fine, but she never did. In July, her first son had his third son.
During this time, there was hardly any rice in the home. She took loans from the provision
stores just to have money for 2 bread, sugar, tea and milk to give to her first daughter-in-law
after delivery. Sabeera’s elder brothers took care of her and her family during the next few
years, as times were difficult. She estimated that each of her brothers gave approximately
Rs.50/week (total of Rs.600/month) to support her family this year and later increased their
support to Rs.100/week (total Rs.1, 200/month).
1999
Sabeera’s first daughter gave birth to her first daughter. The second daughter-in-law filed a
complaint with the police, citing that the member had tried to kill her over the dowry, pouring
kerosene over her. The Muslim community vouched for Sabeera in court, saying that she had
never even asked for a dowry. The police knew that she had done no wrong, so the inspector
asked for her to make sure that her sons were out of town/out of sight to avoid being arrested
until bail was posted. Sabeera took Rs.30, 000 from a chit fund and a loan (Rs.20, 000 from
49
chit fund and Rs10, 000 from loan) for bail for 6 people (member and her children). The case
against Sabeera and her family ran for three years, costing an additional (bus charges, lawyer
fees, etc.) Rs.50, 000, translating to about Rs16, 667 per year for the next three years. The
total cost for this affair was Rs.80, 000. For three years, Sabeera’s daughter-in-law remained
with her mother.
As her sons were out of town at this time (in unknown locations, to avoid being arrested),
there was no income being generated for their family at this time. People in the community
(friends, family), seeing how difficult times were, provided loans totalling Rs.50, 000 to
Sabeera [she repaid the loans after the court case was closed in 2001, after her sons returned
to Avalahalli and were working].
2000
Her three sons moved back to Avalahalli, as the bail had been posted the previous year. They
continued the coolie work (stone) they had been doing before. Her first son was earning
Rs.50/day, her second son was earning Rs.60/day, and her third son wasn’t earning any
money as he had just begun working. [Total earning was Rs.110/day for there family]. Her
first granddaughter joined school this year. A total of Rs.1, 500 was spent on fees, books, and
uniform. Tuition cost Rs.20/month for 8 months.
Sabeera joined Grameen Koota in October. She was doing coolie work, earning Rs15/day,
thus making her total earning as Rs.75/week, Rs.300/month. Sabeera took a GK loan of Rs.4,
000 for her sons’ stone business. Using the money, her sons purchased the granite blocks
from the quarry (they paid others to take the blocks and transport the blocks for them) and
did the stone work themselves. With the Rs.4, 000 investment, they earned Rs.200/day each
with Rs.600/day total for the three sons [at end of 2000, three sons earned Rs.3, 000/week].
Sabeera discontinued working to oversee the finances of her sons’ business. As she was the
only educated member of her family (her husband had not allowed her children to attend
school, she ensured that her sons’ business was running smoothly and that her sons were not
taken advantage of by others).
50
Using the income earned, member put the money into chit funds and the following year took
the full chit to pay off the Rs.50, 000 loan from 1999.
2001
Although case was still running, daughter-in-law moved back in with Sabeera and family,
citing that she had problems with her mother and wanted to be with her husband (her second
son).
During this year, Sabeera’s mother-in-law, who had been looking after her for so many years
as her own daughter, passed away in October. Mother-in-law had saved Rs.50, 000, which
came to Sabeera after her death. Rs.15, 000 of this was used for the after death ceremonies.
The remaining Rs35, 000 was used to pay off the Rs.50, 000 loan from 1999.
In April, she took a GFL of Rs500 to pay for the cable bill, in July, she took another GFL of
Rs500 for rations/food items, in September she took a GFL of Rs.500 for rations/food items,
and in December she took a last GFL of Rs.700 for rations/food items. Sabeera took a SPL of
Rs.2, 000 in June and GK loan in December of Rs.6, 000, both for the family stone business.
Sons were earning Rs.600/day total for all of 2001 (as in the last two months of 2000).
Her 2 grandchildren attended school this year. Including tuition costs, the family spent Rs.3,
320 for their education.
Whatever extra income left over, she used to pay off the remaining Rs.15, 000 of the
Rs50,000 loan and also participated in an Rs.50, 000 chit fund.
2002
She took the Rs.50, 000 from the chit fund to purchase more land adjacent to her current
site/home (20 x 30).
In 2002, member had another operation (which costed about Rs.5, 000), due to excessive
bleeding for five years (with the stress and pressures of the past years, with the court case,
51
hard labour, poor nutrition). She was admitted to a local hospital for 20 days. She was able to
pay for the operation and the doctor’s expenses (Rs.5, 000) by participating in an Rs10, 000
chit fund.
The case against her family ended this year -- after going to court, her second daughter-in-
law admitted to lying, citing that her parents (Sabeera’s eldest sister) had forced her to file
the complaint. In fact, the daughter-in-law had poured kerosene over herself in order to file
the complaint – Sabeera had never done such a thing.
During this year, her second daughter-in-law was pregnant, but had a stillborn child.
She did not take a GK loan this year, but she took a GFL loan three times: in February she
took a GFL of Rs.700 for the electricity bill, then a GFL of in September of Rs.1, 000 for
rations/food items, in December she took a GFL of Rs.1, 500 for the electricity bill.
Her sons were doing well this year, earning approximately Rs.300/each/day, or a total of
Rs.900/day.
During this year, Sabeera participated in two more Rs.50, 000 chit funds, for a total of Rs.1
lakh at the end of the year. She used Rs.75, 000 of the Rs.1 lakh to purchase more land near
her daughter’s home to construct extra three houses the following year. The remaining Rs25,
000 was used to purchase a Colour TV (Aiwa, Rs.10, 000), a TVS two-wheeler (Rs.6, 000), 2
cots (Rs.7, 000), radio/tape recorder, and speakers (Rs.2, 000).
Her three grandchildren attended school this year. Including tuition (which increased to about
Rs.25/month/child), the total cost for their education was Rs.5, 100.
Due to the Rs8, 000 investment in the family stone business at the end of 2001, her sons were
earning about Rs.300/day.
2003
52
Sabeera took a GK loan of Rs.10, 000 in February for the family stone business and also a
GFL of Rs.500 for medical bills. She took another GFL of Rs.1, 500 in May for rations/food
items, a third GFL of Rs.1, 800 in August for the electricity bill, and a fourth GFL of Rs.
1,500 in October again for the electricity bill. She participated in two more chit funds this
year, Rs. 50,000 each. Because she took both chits early, she took only Rs.35, 000 from each
(for a total of Rs.70, 000) – she lost Rs.30, 000 in total from the two chits. She used Rs.45,
000 to build three more houses on her daughter’s extended site and took a Rs.20, 000 loan
from the granite supplier to finish the house. However, the supplier did not ask the money
back, as he was very wealthy and wanted to help their family. She used the remaining Rs.25,
000 from the two chits for her second daughter’s wedding (Rs.10, 000) and to purchase
jewellery for her (Rs15, 000)
2004
Sabeera has taken a loan of Rs.14, 000 this year in April for the family stone business. She
also withdrew Rs.2, 000 of her accumulated of voluntary savings of Rs.2, 029. She invested
this money for her family stone business again. Her three sons are now earning Rs.400/day
each in the family stone business (Rs1, 200/day).
Future plans of “Sabeera”

For the future, Sabeera only wants for her grandchildren to be well educated, unlike her own
children. But as the costs of education are rising every year, she hopes that Grameen Koota
will be able to help her and her family in this regard in the future. Apart from this, she is
looking forward for her third son to get married in the next month. As none of her
properties/houses are registered under her name, she is looking to formally register all of her
properties/assets in order to be able to pass them onto her children/grandchildren in the
future. She hopes to use her fifth Grameen Koota loan to build a house on the site near her
current home.
Thus we can see by the above two case studies that the member have done really well in
there life. Grameen Koota’s intervention has proved for them to be a blessing in disguise and
53
these are the member which we think are applicable to be called as star borrower. So by the
help of case studies we have tried to capture the qualitative aspect of the whole project.
54
REFERENCES
1. Ahmed, Salehuddin; “State of the Micro credit Program in Bangladesh”, Dhaka:

Palli Karma Sahayak Foundation: 2000.
2. http://www.rmk.nic.in/chap1.htm
3. http://www.nabard.org/roles/mcid/section1.htm
4. http://www.grameen-info.org/bank/bcycle.html
5. www.basixindia.com
6. http://www.grameen-info.org/mcredit/
7. www.sksindia.com
8. www.myrada.org/micro_finance.htm
55

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CHAPTER 1

(b) It is offered for creating self-employment for income-generating activities and

(d) All loans are to be paid back in instalments (weekly).

(e) In order to obtain loans a borrower must join a group of borrowers.

(g) Simultaneously more than one loan can be received by a borrower.

1.3 Objective of the present study

The objective of the study is as follows:

• An assessment of performance of member of Grameen Koota in the entrepreneur activity in

• An assessment of economic benefits accruing to the member of Grameen Koota in terms of

(a) Exploratory research

(b) Testing of sample form

(c) Case studies

1.4.1 Exploratory research

1.4.2 Testing of sample form

1.4.3 Case studies

1.5 Designing of check list

2.1 Grameen Koota

• Creating livelihood opportunities

• Addressing the issue of equality and social justice

• Providing institutional credit to the unorganized sector

2.2 Vision of Grameen Koota

2.3 Mission of Grameen Koota

2.4 Goals of Grameen Koota

3.1 Definition of Star borrower

3.1.1 Economic Aspect

3.1.2 Social Aspect

3.1.3 Financier's Aspect

In identifying Star borrowers, we propose the following two checklists.

4.2.1 Four loan cycles

4.2.4 Voluntary savings

4.2.7 Absence without intimation

4.3.1 Economic impact

4.3.1.1 Increase in income

4.3.1.2 Savings of member

4.3.1.3 Increase in Assets

A noteworthy feature of GK operations is the stress laid on the self-reliance by strengthening

4.3.2 Social Impact

4.3.2.1 Breakdown Position

4.3.2.2Perception of own individuality

4.3.2.3 Perception of contribution

i. Education of the children

4.3.2.4 Education of the children

4.3.2.5 Family planning

4.3.2.6 Member’s participation in discussions on problems at Kendra meeting

4.3.2.7 Member’s participation in social and political activities likes electoral/functions

4.3.2.9 Any other Debt Amount

4.3.3 Standard of living

4.4 Weight age

4.4.2 Social parameter:

4.4.4 Increase in Income (multiplying factor 5) 25

4.4.7Increase in social status 20

4.4.8Increase in Standard of living 15

1. Kendra name and no.

Member is recommended for form B: Recommended / Not recommended

1. Kendra name and no.

Unit of Analysis: Individual/Household

S No. Member Name Age Occupation Annual Earnings

iii. Increase in Income: Rs.__________

3. Household Expenditure (Annually)

S No. Particular Expenditure (Rs.)

xi. Movable Asset

xiii. Amount spent in Marriage