Microfinance Methodology

Samhita's microfinance methodology has its roots in the Joint Liability Group (JLG) system of the Grameen Bank of Bangladesh (Nobel Peace Prize awardee, 2006). 5 poor women get together to form a group in order to avail of Samhita's microfinance services. They are of similar age and socio-economic status, unrelated to each other, neighbors who know each other well and trust each other in matters of money. A village center begins to operate when there are at least 3 groups, though a center close to another may begin with 2 groups.

A 4-day training covers Samhita's Financial Literacy training and the procedures of the microfinance program. Illiterate members are taught to sign their names. On successfully passing a test, members start attending a fortnightly/monthly center meeting where transactions such as loan proposals and collections occur transparently in the open. Microfinance services currently include microcredit, microinsurance and micropensions.

Samhita has had to innovate and adapt the basic Grameen model significantly to address various challenges unique to its geography - tough forested terrains, very low population density at a third of neighboring states, poor human capital and infrastructure such as road and markets, etc.

Samhita operates complete branches with as few as 1 or 2 staff members, allowing remote communities to be serviced through tiny branches. Branches share some resources including technical staff at unit centers. Disbursements are done solely through online modes: NEFT/IMPS, barring rare exceptional cases when cash disbursement may also be done at the branch office. Products are offered in fortnightly/monthly payment options. Credit Bureau checks are mandatory and conducted prior to appraisal of all loans. 

Samhita exclusively utilizes free and open source technologies since inception in 2007. Through it's technology partner eCubeH Research Labs, Samhita has access to a distributed private cloud facility, and full-featured web and mobile applications for microfinance portfolio activity, together with enterprise applications for general ledger accounting, human resource management and other institutional functions. Information and analytics across many levels is available on demand. Samhita continually experiments with latest technologies to extend reach into remote communities, while simultaneously maintaining high level of controls and cost containment.