Program Overview|

Slum dwellers require credit access to make purchases, enhance their small businesses and create permanent dwellings. Without microfinance access, slum dwellers are left to borrow from moneylenders at exorbitant rates that perpetuate indebtedness. 

SAATH Microfinance Institute (MFI) provides savings and affordable credit access to over 10,000 slum dwellers, for a variety of purchases. The default rate at SAATH MFI is less than two percent. 

Features of SAATH Microfinance Institute

Compulsory and Voluntary Savings – All MFI members must open a savings account before they can borrow. At minimum, bank members must make a compulsory deposit of INR 100 per month. There is no maximum limit to savings, encouraging voluntary savings.

Joint Liability Group – to access credit, SAATH MFI members must join a Joint Liability Group, made up of friends and neighbors, to ensure timely repayment. The group’s applications and their capacity to pay back are ascertained before sanctioning the loans. Once the loan application is processed completely, the entire group gets access to the loans that they have requisitioned.

Three Loan Types

Consumption Loan – A need-based loan for various purposes such as health, education, social functions (e.g., marriages), household needs and requirements.  

Productive Loan – For business purposes such as bulk purchase of items, working capital, etc. The loan is not given for starting a new business venture.

Asset Creation Loan – For creation of an asset, such as repairing and extension of house, debt redemption. 

History|

Microfinance was started in 1994-1996, worked with two community based organisations (CBO) Ekta Yuvak Mandal in Behrampura and Sakhi Mahila Mandal in Vasna. The MFI was formally established in 2002 with the registration of two cooperatives. At present there are three MFI groups in Saath.

1. Sakhi Savings & Credit Cooperative Society Ltd.

2. Ekta Savings & Credit Cooperative Society Ltd.

3. Sankalp Bachat Mandal (CBO) in Juhapura.

In 2007, these credit cooperatives began a merger process. Government of Gujarat gave SAATH permission to establish microfinance (MFI) activities in 20 wards of Ahmedabad city. With the help of Care India and Access Development services, SAATH is undertaking a 5-year business plan to create a self-sustaining, united microfinance co-operative.

In 2009, MFI expanded to 6 branches across Ahmedabad city.

SAATH MFI’s clients are of low income households, casual labourers, and other economically vulnerable people, who have poor access to credit from formal sources. SAATH MFI works with female and male members of households, at a current ratio of 80:20 female and males respectively. The majority of clients are migrants from Gujarat and other states such as Rajasthan, Uttar Pradesh, Bihar etc.

Most clients are daily wage earners (e.g., rickshaw drivers, hawkers, kite makers, tailors, with daily income INR 100-150); small trade workers (e.g., fruit and vegetable vendors with daily income INR 100-250); or micro-entrepreneurs (e.g., paan vendors, provision store owners, etc. with daily income INR 150-300).

SAATH MFI aims to institutionalize financial inclusion and accessibility. MFI branches operate in 6 Ahmedabad locations: Vasna, Juhapura (Sankalitnagar, Fatehwadi), Behrampura (Sakalmukhi Chawl, Jethalal chawl) and Saraspur. As of December 2009 there are over 12,000 MFI members with a savings portfolio of INR 18 million and loan portfolio INR 19 million. Our default rate is less than 2 percent.

Future Goals |

Currently SAATH MFI operates in six locations of Ahmedabad. SAATH MFI plans to open 2 more branches in other locations of Ahmedabad city with the total outreach increased to 18,000 clients in the next financial year of 2010 -2011.  SAATH MFI is seeking partners and funding for expansion throughout Gujarat and financing to increase the volume of lending to meet current demand.

Leadership |

Coordinator: Divyang Bhatnagar

Mobile: +91 98795 22576

Email: This e-mail address is being protected from spambots, you need JavaScript enabled to view it