Theme - III

Micro Credit Investment Plan Training Module

1) Project Objectives and Core Values and

2) Non-Negotiables

3) What is Micro Credit Investment Plan

4) Why Micro Credit Investment Plan

5) Advantages of SHG Micro Credit Investment Plan

6) Criteria for selection of VO for Micro Credit Investment Plan

7) Criteria for selection of SHG for Micro Credit Investment Plan

8) 7(Seven) Step Process in Micro Credit Investment Plan

9) Criteria for Sanction of CIF

10) CIF – Management Chat

11) Dos and Don’ts for preparation of MCP

12) MCP Training Plan

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 1a) Project Objectives :

1) To organize the Poor house holds into their own institutions

where the members will harness their potential and come out
of poverty.

2) To provide constant facilitation support to the institutions of

the poor,

3) To create and develop a large pool of social capital in these

institutions for providing continuous support and guidance in
their Endeavour to come out of poverty,

4) To build a sensitive support mechanism for these institutions

so that they will work independently beyond the project period.

1.b) Project Core Values:

1. Belief in the power of the poor.

2. Sympathy and empathy towards the disadvantaged and marginalized

members of the society.

3. Honesty and integrity

4. Respect the human dignity and individuality of the poor

5. Facilitate the poor to resolve their problems but not to arbitrate them.

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 2) Non – negotiables :

1) Institutions of the poor shall themselves identify, plan, implement and

monitor all the interventions for poverty removal project staff will
facilitate only,

2) Project should work with the poorest of the poor, most disadvantaged
and marginalized member households,

3) Women from poor households shall be empowered to achieve socio-

economic development,

4) Institutions of the poor shall be facilitated to emerge into self-

managed, self-reliant and sustainable organizations,

5) Bottom up approach instead of top down will alone facilitate direct and
full participation of the poor in their organizations,

6) Poor shall be at the centre stage for all processes of planning and
development which will enable them to develop control and ownership
on their own organizations.

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 3) Why Micro Credit Investment Plan :

1. Poor have a tremendous willingness and potential to help themselves,

2. The organizations of the poor will enable them to unleash their

energies and harness them for their social-economic development,

3. They have inherent skills, experience and local wisdom to access the
opportunities around them for enhancing their livelihoods and coming
out of poverty,

4. The Micro Credit Investment Plan of SHG will give the members a
scope to come out with a family investment plans at household level
and finally aggregate such plans into a Micro Credit Investment Plan,

5. Micro Credit Investment Plan is an opportunity to the poor to access

capital and transform their skills, experiences and local resources into
income generating assets and enhancing their incomes,

6. It is a bottom up planning process where the members have the

freedom to participate directly in identifying various port folios of
opportunities and preparing their own plans,

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 4) What is Micro Credit Plan :

1) Each member of SHG will come up with a family investment

plan and the Micro Credit Investment Plan is an aggregate of
all the family investment plans of all the members.

2) The plan will address members investment needs for income

generation, health, education, consumption, housing and
other social needs if any.

3) The plan is a process orientated document evolved through a

series of dialogues at household level, SHG, VO and MS
levels respectively for accessing investments by the members
of SHG.

4) The plan contains 7 step processes namely

1. Comprehensive profile of SHG,

2. Socio-economic profiles of all the members,

3. Member wise statement of household incomes and

expenditures,

4. Member wise portfolios of opportunities identified by them

along with costs and repayment schedules,

5. Prioritization plan for the members from the poorest of the

poor category,

6. Rotation for the remaining members and terms of the

partnerships of the group

7. Terms of Partnerships between members and SHG,

between SHG and VO and between VO and MS finally.

5) The plan essentially reflects the activities and investment

needs of the members based on their existing skills,
experiences and the opportunities available to them locally
evolved through a 7 step process.

6) Most importantly the MCP is a bottom up plan prepared the

members themselves.

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 5) Advantages of SHG Micro Credit Investment Plan :

1. It will address all types of the investment needs of all the members
of the SHG.

2. It will ensure full and direct participation of all the members in

identifying the activities at household level and finalizing at SHG
level.

3. It will allow all the members to choose the activities based on their
experiences and skills, rather than thrust from above.

4. It is a plan which is collectively prepared by all members where not

only activities are selected by them but also the repayment
schedules and interest rates are decided based on clear
assessment of the members repayment capacity and expected
income levels out of the activities chosen by them.

5. It will also facilitate unity and collective responsibility among the

members and create transparency in the transactions of the group.

6. It will also develop inbuilt peer pressure mechanism among the

members through the processes like prioritization plans rotation
plans and terms of partnership.

7. It will also develop hands on experience to all the members of the

group to handle funds in a prudent manner to sanction investment
loans to members.

8. It is a scientific approach which will enable the SHG members to

attract public institution like banks for mobilizing resources for
providing investments to the members.

9. It will also put an end to bad practices like equal distribution of

funds to all members and creates a systematic approach by
prioritizing the needs of the POP and necessary investments in the
first instance and later on covering other members on rotation.

10. MCP enables the group to develop its own corpus and provides
multiple doses of loans to its members for enhancing their incomes
and coming out of poverty.

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 6) Criteria for Selection of VO for Micro Credit Investment Plan:

1. All the POP & Poor are organized into SHGs and the SHGs are
enrolled into Village Organization

2. VO conducts regular monthly VO EC meeting and bimonthly GB

meeting

3. Two members from each SHG will attend monthly VO EC meeting,

all members of SHG attend bimonthly GB meeting

4. VO shall open office either in a rented building / Govt. building in

the village

5. VO engages the services of one trained Community Activist and

pay the remuneration from VO earnings / SHG contribution

6. VO EC received training on VO management

7. Two representatives from VO attend regular MS RGB meeting

every month

8. VO reviews the performance of SHGs through SHG

Maasanivedikas in the VO meeting

9. The travel charges of VO representatives attending MS RGB

meeting shall be met by VO after sanction of MCP

10. The VO records and other properties are in the custody of VO

representatives in the VO office.

11. VO appoints functional committees for SHG Monitoring, Social

Audit (Asset Verification) and Social Action Committees

12. VO members and VO staff attend the trainings conducted by MS.

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 7) Criteria for selection of SHG for preparation of Micro Credit Investment
Plan:

1) SHG formed with members from POP and Poor households only,

2) The group shall conduct weekly meetings regularly,

3) The age of the group shall be atleast one year

4) The group shall have been enrolled as member of the Village

Organization,

5) The group shall be following group management norms and financial

norms in the meetings,

6) The group shall have opened a bank account on its name and doing
regular transactions with the Bank,

7) The group shall have regular weekly meetings and internal lendings,

8) The group shall have good bookkeeping and also a trained

bookkeeper by paying remuneration from group earnings,

9) The group shall have a recovery performance of above 90%,

10) The members of the group shall have clarity on all the group
management norms and transactions,

11) The group shall have undergone group level members training
atleast for three days.

12) The group representatives shall regularly attend VO monthly

meetings along with SHG’s Masanivedikas.

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 8) 7(Seven) Step Process in Micro Credit Investment Plan :

1st Dialogue:

Based on the criteria, the SHG is selected for providing financial

assistance and is requested to prepare Micro Credit investment Plan. All the
members will receive training on 7 step MCP process and go for preparation
of MCP. The SHG members would also like to follow stepwise processes in
the preparation of the plan.

Step – 1:

- SHG Comprehensive Profile:-

- All the members in the SHG meeting will sit together and prepare SHG
profile with the help of Bookkeeper,

- This will help members and the financing agency to know about the
status of the group,

- Following is the profile of SHG:

1. SHG Name :

2. Village Name :

3. No. of Members : SC ST BS OC Total:

4. No. of weekly meetings held :

5. Percentage of members attendance:

6. SHG Bank Account Number & Place:

7. Date of starting of the group :

8. Total savings amount :

9. Total interest earned :

10. Total fines amount collected :

11. Revolving fund received :

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 12. Total group fund :

13. Loans received from other agencies:

Loan Loan Over

S Name of the % of Loan
Amount amount due
No. agency recovery Balance
received repaid if any

14. No. of small loans issued :

15. Total small loans amount in Rs. :

16. No. of big loans sanctioned :

17. Total big loans amount in Rs. :

18. Percentage of recovery at members level:

19. Over dues if any :

20. Whether group has engaged a trained Bookkeeper or not:Yes/No

21. Whether group is enrolled in VO or not: Yes / No

22. Rotation of Leadership in SHG :

23. Whether the group has good Bookkeeping : Yes /No

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 24. Whether the group is adopting group management norms:
Yes/No
25. Group representatives signatures :

1) ..

2)

Step – 2:

Member wise Socio-economic Profiles

- All members of SHG will sit together in the SHG meeting and prepare
members socio-economic profile, with the help of Bookkeeper,

- This will help the members and the financing agency to know about the
present socio-economic conditions of the member households,

- The representatives elicit the following information from all the members
through an interactive session and the Bookkeeper will prepare
statements.

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 Member wise Socio-economic Profile:

Family Members Details Land

S Educational Present
Members Name Age Caste Children Adults
No. Status Occupation Wet Dry
Male Female Male Female
1 2 3 4 5 6 7 8 9 10 11 12
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

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 Member wise Socio-economic Profile continued :

House Livestock Poverty Status

Tile roof Sheep Others Not so Not at
Hut Bullocks Cows Buffaloes Poultry POP Poor
/RCC /Goat if any Poor all Poor
13 14 15 16 17 18 19 20 21 22 23 24

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Step – 3 :

Members Individual Income and Expenditure Statements

- All the members of the group will sit together in the group meeting and
prepare members individual income and expenditure statements,

- This statement will give details of members financial problems,

indebtedness and poverty conditions at household level,

- This statement will also reveal the sources of income, and the
expenditure on various household items including expenditure on
alcoholism and other wasteful items and reflects the burden of poverty
carried by women members at household level.

- This statement will also help in ranking the members as the poorest of
the poor / poor and others based on their incomes, expenditure and
indebtedness.

Members Individual Annual Income and Expenditure Statements

S No. Items Details

1 Members’ Name :

2 Husband’s Name :

3 Land extent in Acres :

4 Caste :

5 Age :

6 Family Members Details :

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 Members Individual Annual Income and Expenditure Statements
Continued:

S S
Income Amount Expenditure Amount
No No
Rice (No. of Kgs X Rate
1 Agricultural Income 1
per Kg)
Daal (No. of Kgs X Rate
2 Husband wage income 2
per Kg)
Member’s wage
3 3 Other Commodities
income

Other family members

wage income
4 4 Electricity charges
(No. of persons X No.
of days X Wage rate)

Other sources of
income a. Business :
5 5 Soaps
b. Job :
c. Artisan :

6 Vegetables

7 Arrack

8 Cigarettes/ Beedies

9 Meat

10 Children education

11 Traveling expenditure

12 Health expenditure

13 Clothing expenditure

14 Festival expenditure

15 Agricultural expenditure

16 Others

Total Total:

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 Assessment of Income and Expenditure for Milch animals

S S
Income Amount Expenditure Amount
No No
Milk
1 (Liter per day X Liter 1 Paddy straw
Price)

Cow dung
2 (No. of cart loads X 2 Feed Cost
rate per cert load)

Milk for domestic

consumption Animal health
3 3
(No. of Ltrs. X ltr. expenditure
Price)

4 Calf cost 4 Milk transport cost

Wages
5
(No. of days X wage rate)

Total : Total:

Step – 4 :

2nd Dialogue :

Preparation of Micro – Credit Investment Plan indicating member wise

activities proposed, financial costs and repayment schedules.

After preparing member wise income and expenditure statements, all the
members of the SHG wish finalize micro credit investment plan. For this
purpose the members would first prepare their family Investment plans at
House Hold level by discussing with their family members about the individual
activities, estimated costs members contributions, estimated incomes out of the
proposed assets and the repayment schedules. After finalizing the family

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Investment Plans at Household level, the members will prepare Micro Credit
Plan Indicating the activities and the financial costs in the following manner.

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 Micro Credit Investment Plan
Estimated
monthly
Total income No. of
Expected
Loan from out Esti- Install-
Name of Husband Loan Installment Amount
S Activity Amount Members of the mated ments Re-
the / Father portion
No. proposal required contribution asset to Expen- for repay- marks
Member Name from the
for the be diture ment
Agency
activity created of Loan
through Pri- Inte-
Total
loans ncipal rest
1 2 3 4 5 6 7 8 9 10 11 12 13 14
1

10

11

12

13

14

15

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Step – 5 & 6 :

3rd Dialogue with VO / Financing Bank

After preparing micro credit investment plan in the SHG meeting all the
members will approach the VO and present the plan to the Village Organization
Executive Committee. The Village Organization after scrutinizing the plan if
satisfied will indicate approximately the possible loan amount that can be
funded from CIF. Based on the indications given by the Village Organization, as
the indicated amount is less than the total cost proposed in the plan, the Village
Organization Executive Committee will request the SHG members to prepare
two plans. One plan for prioritization of the members based on the indicated
amount and second plan called ration plan for the coverage of the remaining
members keeping in view the expected recoveries and the balance amount
available after repaying VO Loan including terms of partnerships between
Member and SHG. In case the plan is presented to the bank same approach
will be followed keeping in view the amount of loan indicated by the bank.

As per the indications given by the VO / Bank the SHG members will
conduct their meeting again where all members will participate and both
prioritization plan and rotation plans are prepared in detail. Then the SHG
members will approach the VO/ Bank and present their prioritization plans and
rotation plans along with terms of partnership agreed between SHG and its
members. In the meeting they will also finalize the terms of partnerships
between SHG and the VO.

(5) Prioritization Plan:

SNo. 1 2 3 4 5 6 7 8 9
1
2
3
4
5
6
7
8

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(6) Rotation Plan :-

SNo. 1 2 3 4 5 6 7 8 9
9
10
12
13
14
15

Step – 7 :

(A) Terms of partnership between members and SHG.

1. All members shall attend the weekly meeting of the group regularly.

2. Members shall repay the loans in the agreed installments as per the
micro credit plan both principal and interest.

3. All the assets purchased out of loans shall be got insured by the
members.

4. Assets purchased out of loans shall be shown for verification by the

non – loanees Committee appointed by SHG.

5. The non – loanee members committee at the time of verification of the

Assets shall find whether the value of the Assets purchased is
proportionate to the loan amount taken by the members.

6. The loanee members shall purchase the assets within 15 days after
receipt of the loan amount. Incase, they fail to purchase the assets

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 with in 15 days, the loan amounts shall be returned to SHG without
fail.

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(B) Terms of partnership between SHG and VO.

1. The SHG representatives shall attend VO meeting regularly along

with SHG Masanivedikas.

2. The SHG should repay the loan installments as per the agreed terms
to the VO in the VO meeting.

3. The SHG shall ensure that the loan amounts are utilized by the
members for activate as per MCP.

4. The SHG shall ensure to the VO that all the livestock assets were got
insured.

5. The SHG members shall show the assets to the VO asset Verification
Committee during their visit.

6. The SHG shall utilize the services of activists and para-professionals

of VOs and MS for improving the quality of their assets.

7. The VO Executive Committee after sanctioning the MCP will record in

the minute’s book. Incase the VO has sufficient funds, it will release
the loan amount by cheque to the SHG in the meeting. If there are no
sufficient funds / no funds, the VO will take the MCP to the MS-RGB
meeting. In that meeting, the VO representatives and the SHG
members present the MCP to MS-RGB. After scrutiny of the plan if the
MS-RGB is satisfied, the MS will release the funds to the VO byway of
cheque. It is always desirable that whenever the VO presents the
MCP to MS-RGB the VO representatives should also bring the
members of the SHG concerned for presentation and confirmation of
the MCP along with terms of partnership earlier agreed between SHG
its members and also between VO and SHG.

If the MS-RGB is satisfied with the MCP it will release the funds to the
VO subject to agreeing on the terms of partnership between the VO
and the MS.

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(C) Terms of partnership between VO and MS.

1 The VO representatives shall regularly attend MS-RGB meeting along

with VO Maasanivedikas,

2 VO members and staff including SHG bookkeepers shall attend the

trainings conducted by MS without fail,

3 VO shall ensure that the SHG members shall utilize the loans for
various activities as per the agreed MCP only.

4 VO shall repay loan installments and interest to the MS in the RGB

meeting regularly.

5 VO shall ensure that the assets purchased by the SHG members are
shown to MS Asset Verification Committee during their visit.

6 The MS verification Committee shall verify and report to the MS

whether the value of assets purchased is proportionate to loan
amounts taken by the members.

7 The VO shall ensure that all the livestock assets purchased by the
SHG members are got insured.

8 The VO shall ensure that the SHG members utilize the services of the
MS staff, for improving the quality of the programme.

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 9) Criteria for Sanction of CIF

VO and SHG present In the MS RGB

MCP in the MS RGB meeting the VO is
meeting and evolves ToP Mandal selected for MCP
between VO and MS in Samakhya preparation based
the meeting. It is called on certain criteria
Fourth dialogue for VO

SHG presents micro

credit plan in the VO EC
meeting along with ToP
In the VO EC
between SHG and
meeting SHG is
members in the second
selected for
dialogue and presents Village
preparation of
MCP with prioritization Organization
MCP, based on
plan, rotation plan, and
certain criteria for
ToP between SHG and
SHG
members and evolves
ToP between SHG and
Vo in the third dialogue

All members bring their In the SHG meeting

family investment plans the members will to
and finalize SHG Micro discuss and decide
Credit investment plan to finalize at
SHG
in the SHG meeting and household level
evolve ToP between and come up with
members and SHG. It is family investment
the first dialogue plans.

Members finalize family Members discuss

investment plan, at Members family investments
household level at household level

10)

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 11) CIF – Management

Interest rate Repayemtn period

Mandal
MS Samakhya MS 100 – 120 Monthly
Installments
6%

VO VO

VO Village VO 50 – 60 Monthly
Organization Installments
9%

SHG SHG

SHG Self Help SHG

Group 20 – 24 monthly
Installments
12%

Members Members

(Members)

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 12) Dos and Don’ts for preparation of MCP

Dos:

1) In the MS, VO and SHG meetings the 7 step MCP process shall be
discussed before going for preparation of MCP.

2) SHG members shall discuss and finalize family investment plan at

household level before going for preparation of MCP in SHG
meeting,

3) SHG members only prepare the plan and the staff like Bookkeeper /
CA / CV will document the plan as finalized by SHG members,

4) All members of the SHG shall be fully aware of all the details of the
MCP like proposed activities financial costs, repayment schedule
and TOPs,

5) All members of the SHG shall attend the VO-EC, meeting and
present all the details of MCP,

6) in the MS-RGB meeting two representatives of VO and two

representatives will attend and present all the details of MCP,

7) MCP shall reflect all the felt needs members either income
generating schemes, education, health and social needs,

8) SHG members shall utilize the loans for activities proposed and
agreed in MCP only.

Don’ts:

1.) MCPs shall not be prepared without training to the staff and the community on
the 7 step MCP process,
2.) MCPs shall not be prepared in the SHG meeting without first finalizing family
investment plans by all the members at the household level.
3.) Staff like CCs/ MBKs / APMs / CVs etc., shall not prepare the MCPs but only
by the Community Members.
4.) Staff shall not bring the MCPs for VO-EC meetings / MS-RGB meetings but
only by the Community Members,
5.) SHG members shall not distribute the money equally it shall be released to
the members as per the plan only.
6.) Loan amounts sanctioned under MCP shall not be diverted for other purposes
utilization shall always be as per the MCP.

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 13) MCP Training Plan

S Training
Subject Duration Methodology Participants Trainer
No. Members
Charts
Interactive Community Brown Sheets
Project Objectives, core Community
1 ½ Day Lecture members / Markers
values and non-negotiables Note Books Trainer
method Staff
Pens etc.,
Why Micro Credit Charts
investment Plan Interactive Community Brown Sheets
Community
2 ½ Day lecture members / Markers
What is Micro Credit Note Books Trainer
method Staff
Investment Plan Pens etc.,
Advantages of Micro Credit
investment Plan Charts
Interactive Community Brown Sheets
Criteria for selected for VO Community
3 ½ Day lecture members / Markers
for MCP Trainer
method Staff Note Books
Criteria for selection of SHG Pens etc.,
for preparation of MCP
Interactive
Lecture Charts
7 Step process in Micro method and Community Brown Sheets
Community
4 Credit investment Plans. 1 Day Small group members / Markers
Note Books Trainer
First 4 Steps discussion, Staff
and Pens etc.,
presentations

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 S Training
Subject Duration Methodology Participants Trainer
No. Members
Interactive
Lecture
method small
Prioritization plan rotation
5 1 Day group “ “ “
and terms of partnership
discussion,
and
presentation
Charts
Groups formation for field
Interactive Community Brown Sheets
placement, items of work to Community
6 ½ Day Lecture members / Markers
be attended in the field at Trainer
method Staff Note Books
SHG level, VO level.
Pens etc.,
Charts
Visit members households, Discussion
Community Brown Sheets
SHGs and VOs preparation with SHG / VO Community
7 3 Days members / Markers
of MCP following 7 step and attend Trainer
Staff Note Books
process in the field. their meetings
Pens etc.,
Returning from the field to
for the presentation of
Small group
training centre 7 Step Charts
presentation
MCPs by the participants Community Brown Sheets
through role Community
8 1 Day members / Markers
play technique Trainer
Dos & Don’ts in the Staff Note Books
and
preparation of MCPs Pens etc.,
discussion.
Participants Action Plan for
follow up after training.

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