Grama Vidiyal
Encyclopedia
Grama Vidiyal is a microfinance
institution, operating in the Tamil Nadu
area of South India
. Since 1993, Grama Vidiyal, in partnership with Activists for Social Alternatives (ASA), has provided small loans to women without access to formal credit
and who typically have daily incomes of less than INR
80 (USD
2) per day. Grama Vidiyal’s loans outstanding currently exceed Rs.1.157 billion (USD
28.93 million) among its 263,002 women members. Grama Vidiyal is ranked the #4 Microfinance institution in the world and the leading microfinance institution in India in the "2007 MIX global 100 : Ranking of Microfinance Institutions - Composite Ranking"."
founded in 1986 by S. Devaraj, the Chairman and Managing Director. ASA initially concentrated in working with the exploited and deprived to motivate them through education, training, networking, and advocacy. Grama Vidiyal was originally established in 1993 as the microfinance
branch of ASA. In April 1997, Grama Vidiyal officially came into existence when it registered as a separate charitable trust distinct from ASA.
In 2007, Grama Vidiyal transformed from a charitable trust to a regulated Non-Bank Financial Company (NBFC). Its status as an NBFC brings Grama Vidiyal under the purview of government regulation but will permit the firm to take on larger amounts of equity capital. Grama Vidiyal expects continued rapid growth, reaching more than two million clients by expanding to other states of India with an excess of Rs.15 billion (USD 400,000,000) in loans outstanding by 2012.
, co-founder of Sun Microsystems
and former partner in the venture capital firm Kleiner Perkins. Additional investment has come from the Unitus Equity Fund, a $23.6 million fund which invests in emerging microfinance institutions.."
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
institution, operating in the Tamil Nadu
Tamil Nadu
Tamil Nadu is one of the 28 states of India. Its capital and largest city is Chennai. Tamil Nadu lies in the southernmost part of the Indian Peninsula and is bordered by the union territory of Pondicherry, and the states of Kerala, Karnataka, and Andhra Pradesh...
area of South India
South India
South India is the area encompassing India's states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu as well as the union territories of Lakshadweep and Pondicherry, occupying 19.31% of India's area...
. Since 1993, Grama Vidiyal, in partnership with Activists for Social Alternatives (ASA), has provided small loans to women without access to formal credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...
and who typically have daily incomes of less than INR
Indian rupee
The Indian rupee is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India....
80 (USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
2) per day. Grama Vidiyal’s loans outstanding currently exceed Rs.1.157 billion (USD
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
28.93 million) among its 263,002 women members. Grama Vidiyal is ranked the #4 Microfinance institution in the world and the leading microfinance institution in India in the "2007 MIX global 100 : Ranking of Microfinance Institutions - Composite Ranking"."
History
Grama Vidiyal’s parent organisation, Activists for Social Alternatives (ASA) is a public charitable trustCharitable trust
A charitable trust is an irrevocable trust established for charitable purposes, and is a more specific term than "charitable organization".-United States:...
founded in 1986 by S. Devaraj, the Chairman and Managing Director. ASA initially concentrated in working with the exploited and deprived to motivate them through education, training, networking, and advocacy. Grama Vidiyal was originally established in 1993 as the microfinance
Microfinance
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
branch of ASA. In April 1997, Grama Vidiyal officially came into existence when it registered as a separate charitable trust distinct from ASA.
In 2007, Grama Vidiyal transformed from a charitable trust to a regulated Non-Bank Financial Company (NBFC). Its status as an NBFC brings Grama Vidiyal under the purview of government regulation but will permit the firm to take on larger amounts of equity capital. Grama Vidiyal expects continued rapid growth, reaching more than two million clients by expanding to other states of India with an excess of Rs.15 billion (USD 400,000,000) in loans outstanding by 2012.
Loan Products
Grama Vidiyal presently offers a variety of loans to its members.- General Loan: The General Loan currently comprises about 80% of Grama Vidiyal’s total loan portfolio. These are small, collateral free loans offered to women entrepreneurs. The loans are disbursed to women federated in groups of 5 or more, with the other members serving as guarantors. Repayments for the loans are made at weekly centre meetings, facilitated by field managers. General loans range in size from Rs. 5,000 to Rs. 15,000.
- Seasonal Loan: Grama Vidiyal provides Seasonal Loans to members who already have a General Loan outstanding and have a history of regular and prompt repayment and regular centre meeting attendance. These loans are offered at times of school admissions and festivals. Seasonal Loans of Rs. 1,000 to Rs. 2,000 are offered. The Seasonal Loan business is a small part of Grama Vidiyal’s operations, comprising only 7 to 10% of Grama Vidiyal's outstanding loan portfolio.
- Business Loan: The Business Loan is an individual loan and does not require the guarantee of other group members, but does require a more extensive application in which the business concept, cashflows, and profitability of the business activity is considered detail. A two year or one year loan will be offered depending upon client’s repayment capacity. Business Loans range in size from Rs. 30,000 to Rs. 70,000. These loans currently make up 7 to 10% of the outstanding loan portfolio.
- Housing Loan: Through client surveys, Grama Vidiyal has realized the need for housing loans. Most clients build additions or new houses on a piece by piece basis, at times when they have extra money. The housing loan will enable members to build or add to their house at one time and pay back the loan over time. Grama Vidiyal plans to make the Housing Loan available by 2008. Loans will be offered in sizes of Rs. 70,000 to Rs. 90,000. Tenure for the loan will be 3 to 5 years.
Other Services
- Insurance: Grama Vidiyal is among the largest microinsurance providers in India and received the Finalist Award in Shimmer Category Insurance from INGING GroupThe ING Group is a global financial institution offering retail banking, direct banking, commercial banking, investment banking, asset management, and insurance services. ING is the Dutch member of the Inter-Alpha Group of Banks, a cooperative consortium of 11 prominent European banks...
and PlaNet FinancePlaNet FinancePlaNet Finance is an international non-profit organization with the mission to alleviate poverty through the development of microfinance, therefore increasing the unbanked and underbanked's access to financial services....
. It was also studied by ILOInternational Labour OrganizationThe International Labour Organization is a specialized agency of the United Nations that deals with labour issues pertaining to international labour standards. Its headquarters are in Geneva, Switzerland. Its secretariat — the people who are employed by it throughout the world — is known as the...
for a case study – "Micro insurance and Microfinance Institutions". Grama Vidiyal has been implementing microinsuranceMicroinsuranceMicroinsurance is a term increasingly used to refer to insurance characterized by low premium and low caps or low coverage limits, sold as part of atypical risk-pooling and marketing arrangements, and designed to service low-income people and businesses not served by typical social or commercial...
since 1993. The sum assured is Rs. 20,000 (USD 500) to the family of the deceased member, on the death of the member due to any cause. Grama Vidiyal currently works with Bajaj AllianzAllianzSE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
in delivering the insurance. Previous partners include LIC, ICICI Lombard, Max New York, AMP Sanmar and TATA-AIG. For the last three years alone the number of lives covered using insurance is 363,751 and the number of the families enlightened with the claim benefit worth Rs. 10,360,000
- Networking and Federation: In conjunction with the Activists for Social Alternatives (ASA), Grama Vidiyal takes on a variety of initiatives, including: lobbying and advocacy, women empowerment, poor and DalitDalitDalit is a designation for a group of people traditionally regarded as Untouchable. Dalits are a mixed population, consisting of numerous castes from all over South Asia; they speak a variety of languages and practice a multitude of religions...
empowerment, and education for poor children.
Investors
Grama Vidiyal currently pursues equity investments from a variety of institutions and organizations. Some of the most prominent investors include Vinod KhoslaVinod Khosla
Vinod Khosla is an Indian-born American venture capitalist and an influential personality in Silicon Valley....
, co-founder of Sun Microsystems
Sun Microsystems
Sun Microsystems, Inc. was a company that sold :computers, computer components, :computer software, and :information technology services. Sun was founded on February 24, 1982...
and former partner in the venture capital firm Kleiner Perkins. Additional investment has come from the Unitus Equity Fund, a $23.6 million fund which invests in emerging microfinance institutions.."
External links
- http://www.grameenfoundation.org
- http://www.asadev.com
- http://www.mixmarket.org
- http://www.sa-dhan.net
- http://www.unitus.com
- Grama Vidiyal Microfinance News