Critically examine the strategies and principles adopted by SHARE Microfinance Ltd.

since its inception to grow its outreach and loan portfolio. Suggested answer SHARE, one of the largest microfinance institutions in India, started its operations for the poor in 1989 as a not-for-profit society. The microfinance firm had taken over from where no national banks would provide their services. Its strategies and principles were significant economic empowerment of the marginalized sections in society, particularly poor rural women across India. Grameen model SHARE had adapted Grameen methodology in its operations by focusing on loaning to groups of women. The women had formed themselves into groups of five members each with the general criteria that they had to be of the same age group, of the same area, and known to one another. Family members or relatives could not be part of the same group. The principle behind such homogeneous group was to strengthen crisis coping mechanisms, diversify income or earning sources and build assets. The focus on women was to ensure that the benefits of increased income reach to the general welfare of the family, particularly children. Awareness program Members of each group receive seven days of training on various aspects of the operating model, during which they learn their own signature to have an identity for themselves. Eight groups come together at a centre for weekly meetings. Field staff members facilitate weekly group meetings, in which members undertake the responsibility of approving loans and disbursement, and ensuring repayments. Members go through additional social development programs that cover topics ranging from childrens education to health, nutrition and sanitation. Such strategy expected to have an immediate impact on a wide range of poverty reduction objectives such as income, health, nutrition and education and improvement of the status of women. Re-payment of loan The loans were given at a simple interest and had to repay in 50 weekly installments. There is no collateral to back these loans and repayment is ensured using social/peer pressure, as the group is responsible for collecting the loans. To ensure that the loan is utilized only for the intended purpose, the money is given in a staggered manner to the group members and subject to satisfactory assessment by the field credit officers.Through its no-tolerance and joint liabilityapproach and other business development services, SHARE reached out to help these women change their mental attitude, thereby contributing to the growth of sustainable communities. Other Facilities SML also concentrated on providing savings products to its members though SHARE India MACS. This facility might help them achieving childrens education, getting health care and minimizing absence from work. Introduction of Computers and MIS systems reduced the

workloads and increased the operational efficiency. The firm also designed programs (vehicle loans, mess facility, TV sets in offices) to meet the needs of the staff and hence able to retain them as clients. Hence, the participants had been increased that helped the company to attain sustainability. Growth indicators The operation of SHARE was very cost-effective, because initial investment was recycled and reused. The operating costs had decreased with the scale of outreach. SHARE had transformed itself from a society to a limited company which could result in lending to clients that are more profitable and thus enabling them to reduce poverty. SHAREs members per staff ratio and operating self-sufficiency had increased between 1999 and 2005 while cost per unit of money lent had reduced, showing higher level of productivity per staff member. Increased loans repayment against the total loans disbursed indicating that the quality of SHAREs portfolio had not diminished with its rapid growth. Also increased financial selfsufficiency in the same period had been signaling towards positive trend regarding the financial impact after transformation. Conclusion The consistent effort of the field staffs to reach and to demonstrate a positive impact on the poorest community helped the members being motivated, confident, self-reliant and disciplined which was the core principal of the institution. Through Capacity Building workshops and training program, SHARE provided effective business function such as strategy, operations and accounting process among the poor. The poorest could definitely benefit from this microfinance in terms of increased incomes and reduced vulnerability.