NGOs+and+Microcredit

> > Ð To promote Information collaborations and Constructive communication between NGOs, to develop effective partnership with each other. > Ð Networking for the access, sharing and dissemination of information > Collaboration and Partnerships between NGOs themselves and with other organizations. > Ð Electronic Networking to strengthen community organizations by boosting its knowledge base and its ability to share information and experiences with strategic allies and other partners in relevant field. Ð Capacity building of grassroot level NGOs, social workers through free online resources and information on a single platform. Ð To serve non-profit organisations, charities, grassroots and community groups, educational and research institutions. Ð Sharing of ideas among NGOs and development agents. Ð Avail free, easy and instant access to information. Ð Help NGOs in their fund-raising efforts. Ð Provide more options before Funding Agencies to select the right choice of organisation to support and work with. > with the expectation that the loan will be repaid in the future. The goal of a microfinance institution is to become self-sustaining so that it can use the interest from loans to cover its costs, and therefore not need to rely on outside funding. > > Swayam Krishi Sangam (SKS) is a microfinance institution that operates in rural India, designed based on the Grameen Bank model. This organization was founded in 1998 with the establishment of a woman’s banking center in the Medak District in the State of Andhra Pradesh, a region considered to be one of the poorest in India. > > Before the presence of a microfinance institution, there was no way for certain segments of the population to finance the skills and/or resources necessary to pull themselves out of an impoverished existence. Now that such institutions have been established, it opens up the possibilities for a blanket weaver to purchase more wool and thereby aspire to a family-supporting level of income, and it allows for countless other possibilities that are not feasible without a reserve of capital. > > Overall, microfinance has shown significant results in alleviating poverty within the rural areas where it has been established. While it still has a way to go in achieving selfsufficiency and in expanding its outreach and impact, it has made a difference in the lives of many individuals. YASHFEEN AND SHILPIS DISCUSSION ON MICRO FINANCE
 * NGOs**
 * Gurvisha: Given below are the main objectives of NGOs in INdia:-
 * Shilpi: One of the most interesting discussions centered on the idea of microfinance, which has the promise of being a financially self-sustaining method for helping the poor. Rather than involving direct grants or subsidies to the poor, microfinance gives the poor much-needed access to capital
 * Kari: It will be interesting to see how microfinance passes the test of longevity because I think it has a lot of potential for democratizing economic growth. Thus far feedback has been almost universally positive, so I thought I'd mention an article in the Economic & Political Weekly (it's a big PDF, but I'll try to find a way of linking it) that expressed skepticism. Using empirical evidence, the authors assert that microcredit brings about only "marginal" improvement in the beneficiaries' income. In addition, they claim that the Grameen Bank perpetuates "debt cycles" by paying off loans with fresh loans from moneylenders. Another criticism is that micro-credit is limited to a restorative mechanism - that is, it brings the impoverished up to a certain standard of living and self-sufficiency but then prevents them from further ascent. Because microfinance is such an evolving phenomenon, it's difficult to draw any conclusions regarding the validity of such criticisms, but do these problems seem at all apparent in India? And how do micro-credit programs compare with the state-led poverty alleviation schemes?
 * Matt: it seems as if microcredit could raise everyone to a new level economic standing but they might still be in relative poverty. I am a fan of microcredit because it is trying something, and brings people out of the most destitute forms of poverty, but there could be hidden problems, especially if the companies funding the microcredit do not have the best intentions.
 * Christina: I agree with both Matt and Kari that since microlending is such a new phenomenon, that its long-term affects are still questionable, but the observable ones do offer some insight about how the system can be adjusted to promote more sustained economic growth and relief versus the "marginal" improvement you mentioned Kari. I was just browsing through some articles (because that's what I do naturally--research articles about microfinance and poverty relief), and I came across this statement from Roy Jacobowitz, who is the senior vice president for resource development and communications at Acción International, a Boston-based group that has established and supported the creation of a network of microlending banks. Jacobowitz stated that, "Microfinance boosts the very best parts of capitalism, because it boosts people’s ability to make their own choices and to work their way out of poverty." While this kind of by-your-bootstraps self-improvement is celebrated by the capitalist nation-state, it seems like a limited process for many that are existing well below the poverty line. I mean, I don't really know what I'm talking about here, but it seems that microlending + other programs that aid people in the microfinance process could promote the kind of sustained economic relief needed.
 * Microfinancing**

One of the most interesting discussions centered on the idea of microfinance, which has the promise of being a financially self-sustaining method for helping the poor. Rather than involving direct grants or subsidies to the poor, microfinance gives the poor much-needed access to capital with the expectation that the loan will be repaid in the future. The goal of a microfinance institution is to become self-sustaining so that it can use the interest from loans to cover its costs, and therefore not need to rely on outside funding. Before the presence of a microfinance institution, there was no way for certain segments of the population to finance the skills and/or resources necessary to pull themselves out of an impoverished existence. Now that such institutions have been established, it opens up the possibilities for a blanket weaver to purchase more wool and thereby aspire to a family-supporting level of income, and it allows for countless other possibilities that are not feasible without a reserve of capital. A. Reduction of Vulnerability of poor households B. Increased Consumption per head C. Reduced Income related Poverty · There are a variety of problems and shortcomings associated with the microcredit and microenterprise cluster models of poverty alleviation. One is the problem of using the loans effectively. · A second problem is that microcredit loans don’t reach the poorest of the poor. Instead they tend to reach the moderately poor members of society. · A third problem is the danger of borrowers becoming dependent on microcredit, rather than using it as a means to escape poverty. · Fourth, successes in poverty reduction may not hold up over time. Clustering brings with it a different set of problems. Microcredit has some merit within certain narrowly defined limits. It can be a great help to poor people with good math skills, and some predisposition for entrepreneurship. Such programs are especially helpful for the moderately poor, and for enterprises located near roads and crossroads. Successful microentrepreneurs also need to be able to choose good, money making investments, and be able to pursue them without undercutting from other microentrepreneurs or cheap imports. Finally, if the enterprises are going to be encouraged to cluster they must not be of a kind that is likely to produce large negative externalities. With all of these restraints and qualifications, it should be obvious that microcredit programs are not going to be solving all of the world’s poverty problems. If our grandchildren go to museums to see what poverty was like, it is not going to be as a result of the spectacular success of expanded microcredit initiatives. The problem of poverty is too multi-faceted. It just can’t be addressed by a single solution. Microcredit will never have significant impact on the world-wide phenomenon of poverty.
 * Introduction**
 * Benefits**
 * Drawbacks**
 * Analysis and Conclusions**