GRAMEEN KOOTA

Bangalore
Faculty Guide
Prof. Madhavi Mehta

Presented by
Anand Arup (24004) Shandilya Ankur (24002)
Madhu V (24016) Ralhan Joginder (24049)
OUTLINE
 Backdrop: Need for Micro credit
 Genesis: Grameen Koota
 Methodology and Sources
 The Universal Business Model
 Strategic Issues
 Learning

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BACKDROP
 In a population of 100 crore in India:
 40 crore live below poverty line
 Annual credit usage of the poor:
 6 crore rural households use an average of Rs. 6000 each
 1.5 crore urban households use an average of Rs. 9000
each
Source: Sa-Dhan

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BACKDROP Cont’d…

 The current annual credit usage estimate:

Rs. 50,000 crore
 Supply of credit to the poor
 the total institutional supply barely crosses Rs. 1000 crore
 only 2% of the existing credit usage by poor families.

Source: Sa-Dhan

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BACKDROP Cont’d…

 Sources of Credit:
 Money Lenders, Pawn Brokers, Grocers, etc.,
 Vicious Cycle of Poverty
 Innovations in Developmental Programmes
 Inspirational Success Stories

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GENESIS
 Inspired by the story of Prof. Muhammad Yunus &
Grameen Bank
 “Give us credit” by Alex Counts
 1997 - Contact with Grameen Bank and gathering
more info & literature
 1998 - Training at Grameen Bank, Bangladesh &
submitting project proposal
 1999 - Seed capital funding from Grameen Trust

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GENESIS Cont’d…

 Grameen Koota was established in May 1999 as

a Micro credit program, under T. Muniswamappa
Trust
 A Section 25 Not-for-profit Organization
 Grameen Koota envisages to provide services to:
 the poorest
 women
 without collateral
 using peer pressure and peer support
 in rural and urban areas

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METHODOLOGY & SOURCES
 Understand Grameen Koota using the Universal
Business Model
 Semi structured Interviews with Top Management,
Middle Management and Operational Staff
 Field Visits (Branches)
 Grameen Koota Literature
 Competitor Analysis
 Internet

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MISSION & VISION
 Grameen Koota’s Mission and Vision Statements
address:
 Empowering Women
 Impacting poverty
 Creating livelihood opportunities
 Addressing the issue of equality & social justice
 Reducing vulnerability of the poor
 Providing institutional credit to unorganized sector
M&V

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 CHALLENGE
Caught in the vicious cycle MFI’s outreach
trying to alleviate poverty becomes limited
and stagnates

Earmarked microcredit funds

Loan Portfolio
(for poverty alleviation) not
does not grow
forthcoming, from Banks/
Financial Institutions
A great mismatch in
demand and supply
for the poor – the
Rising poor remain poor
Deficit

Affects interest income

necessary for MFI to cover
its operational costs

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CHALLENGE Cont’d…
MFI’s outreach
increases
Banks / Financial
Institutions support NGO - Loan Portfolio grows
MFI’s
Poor get access to capital and
Reduces the deficit – MFI increase their income
becomes operationally
viable
Rising income translates to better food,
health, education, arrest of migration to
Interest income for MFI
urban areas and rising above the
increases
poverty line, revitalizing rural economy
Breaking the
Vicious Cycle The poor get empowered and start
accessing mainstream financial
services

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UNIVERSAL BUSINESS MODEL
PERFORMANCE
IDENTITY

CULTURE PURPOSE

INFLUENCES

STRUCTURE

DELIVERABLES

PARTICIPANTS

ACTIVITIES
ENABLERS
1. IDENTITY
 A Micro Finance Institution registered under T.
Muniswamappa Trust on 21st June 1995 under
Company’s Act
 An Institution lending money to poor women at
their doorstep

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2. PURPOSE
 To lend money to poor women without collateral
to improve their financial, social and economic
status
 To team up with banks and other financial
institutions to alleviate poverty from rural
Karnataka

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3. STRUCTURE
 Top Management (CEO & COO)
 Middle Management (Functional heads)
 Officer Level (Project Managers)
 Assistant Level (Trainees & others)
 Field Officers (Branch & Kendra Managers)
 Others
Organogram

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4. PARTICIPANTS
 Trustees
 Managers
 Workers
 Clients
 SuppliersList
 Indirect participants

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5. ENABLERS
 Structure
 Dedicated workforce
 Computers and MIS
 Financial resources
 Relationship with members

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6. ACTIVITIES
 Line of business is to supply timely credit,
savings & insurance facilities to the poor.
 Support activities
- Training to members & staff
- Marketing their products
- Providing systems support to operations
 Grameen Koota operates at two levels:
Field level & Head office level

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7. DELIVERABLES
 The efforts result in products, services or both
 Grameen Koota offerings
 Saving Products and services

Kendra loans, voluntary savings, training savings etc.

 Loan Products and services
income generation loan, welfare loan, emergency
loans etc.
 Procedure for availing the offerings
 Loan utilisation checks

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8. INFLUENCES
 Influences may constrain what the organization
can accomplish, threaten its very existence, or
open up opportunities which can be exploited
 INPUT Level
- Funding Agencies
- Other MFIs like Sanghamitra, BSS etc
 THROUGHPUT Level
- Safety of field staff
- Information loss

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8. INFLUENCES Cont’d…

 OUTPUT Level
- Catering to diverse set of peoples
- Large untapped market available
- Other MFIs like Sanghamitra, BSS etc
- Rating agencies

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9. CULTURE
 Collective stage (growth stage)
 Still Evolving
 Two distinct noticeable cultures at the head
office and the branch level
 Combination of Democratic and Autocratic
management style
 Consistent support on behalf of management

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CULTURE Cont’d…

 Degree of freedom, independence and

responsibility
 At Head office LOW
 At Branch HIGH
 Informal, cordial and friendly work culture
 Low Perks and benefits compared to Other MFI

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10. PERFORMANCE
 Participant satisfaction opinions during the SED
workshop
 Innovation of cattle insurance
 Portfolio at risk 0.0%
 No. of active loan clients per staff 150
 Return on assets -1.91%
 Break Even at 35,000 members in 2005
Statistics Ratios

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STRATEGIC ISSUES
 H R Policies
 Part of Administration
 MIS
 Geographical Constraint
 Slow exchange of Information
 Competition
 Currently the Best MFI in Karnataka
 Larger MFIs from Andhra Pradesh, Tamil Nadu planning
to expand into Karnataka

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LEARNINGS
 Full Fledged Pro-active HR System
 Impact Assessment
 Improvised MIS
 MFIs, A Panacea for the Poor…?

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STATISTICS
 As on 30th June 2004
- 86 Staff (20 HO & 66 BO)
- 12 Branches
- 12,092 members
- 15,359 Income Generating loans
- Total loans issued Rs 78,143,320
- Loans outstanding Rs 23,452,432
Back

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MISSION & VISION
 MISSION
- 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.
 VISION
“We envision building a Micro Finance Institution, which
will eventually be owned, managed and used by poor
women.”

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SUPPLIERS
 Grameen Trust,
Bangladesh
 FWWB, Ahmedabad
 Deutsche Bank, Mumbai
 ICICI Bank, Mumbai
 HDFC, Bangalore
 Canara Bank, Bangalore
 ING Vysya Bank,
Bangalore
 UTI Bank, Bangalore
 SIDBI, Bangalore
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 Deutsche Bank, USA
 CGAP-World Bank, USA
 India Development
Service, USA
 Grameen Foundation,
USA
 Grameen Foundation,
Australia
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 SUPPLIERS
Organisation Sanctioned Amt. Availed Amt. Repaid Balance as of Purpose
Amt. in Rs in Rs in Rs 31/03/04 in Rs
Canara Bank 2,000,000 2,000,000 2,000,000 0 Onlending
FWWB,
15,000,000 13,000,000 4,077,500 8,922,500 Onlending
Ahmedabad
Grameen
3,648,256 3,648,256 143,912 3,504,344 Onlending
Trust,
Bangladesh
Grameen
Operating
Trust, 352,544 352,544 43,173 309,371
Expense
Bangladesh
HDFC Ltd.,
9,990,000 4,190,000 1,051,790 3,138,210 Onlending
Bangalore
UTI Bank,
12,500,000 10,550,000 0 10,550,000 Onlending
Bangalore

Deutsche
2,500,000 2,500,000 0 2,500,000 Leveraging
Bank, Mumbai

SIDBI 4,000,000 2,000,000 0 2,000,000 Onlending

Total 49,990,800 38,240,800 7,316,375 30,924,425

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