Bio-Sand Water Filter

Indian Industry of Micro-Finance

And

It’s Applications on Microenterprise

MBA:699

Advisors:

Dr. Omar Keith Helferich

Nagaraju Boyina

December 2, 2009

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TABLE OF CONTENTS: PAGE No.

Executive Summary………………………………………………………………………………………………. 04

1. Introduction………………………………………………………………………………………………………. 05

1.1Introduction to HydrAid…………………………………………………………………………………… 06

2. Objective………………………………………………………………………………………………………….. 07

3. Methodology………………………………………………………................................................ 08

4. Research analysis…………………………………………………………………………………………….. 09

4.1 Microfinance………………………………………………………………………………………. 09

4.1.1 Formal sector institutions………………………………………………………………………… 10

4.1.2 Informal sector institutions……………………………………………………………………. 11

4.2 SHGs (Self Help Groups)………………………………………………………………………………….. 12

4.2.1 SHGs Linkage with banks………………………………………………………………………….. 13

4.3 Microfinance to Microenterprise……………………………………………………………………… 14

5. Research Findings……………………………………………………………………………………………………. 15

5.1 SHGs…………………………………………………………………………………………………………………… 15

5.1.1 SHG Model………………………………………………………………………………………………… 15

5.1.2 Progress of SHGs………………………………………………………………………………………… 16

5.2 SHG-Bank linkage program………………………………………………………………………………… 17

5.2.1 The SHG-Bank linkage program mainly performed in three models…………… 18

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 5.2.1.1 Impact of SHG-Bank Linkage program………………………………………………… 19

5.3 The Transformation of SPANDANA…………………………………………………………………………. 20

5.3.1 Background…………………………………………………………………………………………………….. 20
5.3.1.1 Success Story of a client (SPANDANA)………………………………………………….. 22

6. Recommendations…………………………………………………………………………………………………….. 24

6.1 Microfinance and SHGs……………………………………………………………………………………….. 24

6.2 Micro Entrepreneur’s……………………………………………………………………………………………25

6.3 SHG-Bank Linkage Program………………………………………………………………………………….25

7. References…………………………………………………………………………………………………………………...27

8. Appendix……………………………………………………………………………………………………………………….28

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 EXECUTIVE SUMMARY

India being the second largest populated country in the world is in need of safe water. With 29

states and 7 union territories Indian culture is hard to learn, as people in each and every state

follow their own cultures and religions. Having many people under the poverty line the Indian

government, Non Governmental Organizations (NGOs) and other organizations are taking many

initiatives to make the poor people sustain the economic stability. Most of the poor people in

India live in rural parts, where the transportation, education, medical, governmental services

are worst; this intern is leading to un-hygienic environment around the rural areas. Most of the

deaths caused in the children are from rural areas.

In recent past years many Self Help Groups (SHGs), NGOs and various other organizations have

improved the living standards of the rural people. Having started many programs of providing

safe water to the people in India, they need to still cover a lot. Bio sand water filter is one good

option to provide safe water to the people in India.

This paper mainly focuses research on Indian industry of microfinance and its implications on

microenterprise. As the microfinance industry in India is developing at rapid pace, introducing

the bio sand filter will be a challenge. As SHGs in India are increasing in number, targeting micro

entrepreneurs will also be a great challenge. The analysis and findings of the microfinance

industry in India are written in this paper which helps the bio sand water to be implemented.

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 1. Introduction

With water defining human, social and economic development and without adequate

supplies and management of fresh and salt-water resources, socio-economic development

simply cannot take place [ CITATION WHO \l 1033 ]. India being one of the largest populated

countries in the world is in need of safe water which can be used for drinking, bathing and for

regular uses. At present, most of the rural areas in India are dependent on the ground water

and the urban areas, on surface water; but most of the water is contaminated with bacteria and

viruses which result in many diseases. Water resources in India are mainly from ground and

rainfall, and in most cases this water is being used for irrigation and domestic use. During

domestic use, the water is being contaminated and major effect are resulting in children

suffering with various diseases such as cholera, Typhoid, Hepatitis etc which in turn is leading to

a lot of deaths in India. Though the Indian government has started many initiatives for providing

the safe water to the people, there is still much ground to be covered. Availability of safe water

is scare for poor and many are suffering from this issue.

The initiative of providing safe water to the poor people around the world International Aid

has provided the HydrAid Bio sand water filter which purifies the unsafe water by removing the

viruses, bacteria and other elements that cause waterborne diseases. The CMU Clean Water

Initiative (CMUCWI)–collaboration between the CMU College of Business Administration, CMU

Research Corporation, and other NGO, institutional and corporate partners—seeks to develop

and implement a model that will give India a fresh drink of water, every day, for a lifetime. This

research project will look in to the Indian financial sector in the area of microfinance and its

applications on microenterprise with regard to water solutions currently available.

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 1.1 About Hydraid :

India is a largely populated country and water usage is at maximum, but the availability of safe

water for the domestic usage is not available, and this is due to this many diseases are

prevailing in India, especially in rural areas.

With having great implementation success in Ghana and other parts of the world HydrAid has

planned to implement this product in Indian rural areas. Using the collaboration with CMUCWI,

NGOs and many companies wants this product to be a great success in India. In regard to the

product itself, it’s a very simple and effective product that can be placed at any corner of the

room. It’s made of UV resistant plastic and can be easily installed. And it is enclosed with a layer

of sand and gravel. The biological surface layer consumes pathogens to clean the water. When

the water is poured into the top of the HydrAid™ filter through a diffuser plate, it passes

through the biological layer, then down through layers of sand and gravel. As the water reaches

the base of the filter, by gravity, the water flows out of the filter through a plastic pipe, which is

attached on the outside of the filter. In addition, this filter can purify 75gallons/day: and even

the life cycle of this filter is about 10years, so it requires low maintenance [ CITATION Hyd \l 1033 ].

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 2. Objectives of the project

The main object of the Hydraid water filter is to provide safe water to the rural people in India

and also check whether there could be a market-based strategy for filter distribution, by

combining microenterprise and microcredit and by offering to the poor consumers and micro

entrepreneurs.

2.1 Creation of the Indian industry report on microfinance and its applications to

microenterprise.

2.2 The other objective includes providing information about SHGs and NGOs that are

operating rural parts of India. It will also include information about how the SHGs are

operating, their functions.

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 3. Methodology

The methodology followed in this paper is mainly dependent on secondary sources. Much of

the information is being collected from articles, journals, newspapers and other useful

resources. It also includes information from NGOs websites. The micro finance implementation

and its applications are mainly collected from the Indian government websites. Additionally

survey questions will be given to bio sand filtration professionals who have implemented

Hydraid in other countries.

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 4. Research Analysis

With over 1.15 billion people, India is currently the world’s second largest populated country.

With improving technologies, globalization is playing a huge role in any country’s development.

India being a developing country, business has a great impact on its growth. Having various

sectors such as industrial sector, services sector, infrastructure sector etc business is made

easier in India.

India has undergone a paradigm shift owing to its competitive stand in the world. The Indian

economy is on a robust growth trajectory and boasts of a stable annual growth rate, rising

foreign exchange reserves and booming capital markets among others. GDP factor cost at

constant (1999-2000) prices in Q4 of 2008-09 is estimated at Rs. 9, 02,924 crore, as against Rs.

8, 53,785 crore in Q4 of 2007-08, showing a growth rate of 5.8 per cent [ CITATION htt \l 1033 ].

4.1 Microfinance

Microfinance in India started in 1980s with an effort of forming informal groups (Self Help

Groups) to provide credits and savings to the poor. Since then there has been a great evolution

in Indian microfinance sector. With establishment of NABARD (National bank for Agriculture

and Rural development) in 1982, launching the SHG-Bank linkage program in 1992,

establishment of SIDBI (Small Industries Development bank of India) in 2000 and many such

more programs have helped the Indian government and various organizations to develop India.

In India Microfinance operates by:

1) MFIs (Micro Financial Institutes)

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2) NABARDs SGHs bank linkage program (partnership with SHGs, Banks and NGOs)

Micro Finance in India provides various services to the people in order to develop their

living standards. Micro finance is mainly helpful to the SHGs where the poor people will have

access to money. Services such as providing loans, Insurance, Financial counseling, savings etc.,

help the poor people in need. One main factor about the micro finance groups in India is: 4 out

of 5 micro finance clients are women. In India, the financial issues in most of the poor families

are taken care by the female members of the family. The financial institutes are mainly

operated as:

Formal/Banks: comprises of all banks such as commercial banks, rural banks and cooperative

banks.

Informal/Non-Banks: comprises of institutions that take care of micro finance as their main

activity.[ CITATION Tow06 \l 1033 ]

4.1.1 Formal sector institutions:

Some of the formal financial institutions are Commercial Banks, Housing Finance Institutions

(HFIs), NABARD, Rural Development Banks (RDBs), Land Development Banks Land Development

Banks and Co-operative Banks (CBs)[ CITATION Piy \l 1033 ]. Most of these banking institutions

serve the needs of commercial sector and provides loans to the middle and upper class people.

They don’t lend money to the lower class people due to the following risks involved:

1. Credit risk

2. Lack of tangible proof for assessment of income

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3. Most of the poor people are from villagers where their income source is agriculture.

The government of India has considered these factors in to account and started initiatives to

strengthen the institutional credit system. The rural branch of the banks are increased a lot and

prescribed certain rules to the rural banks to strengthen the credit system for the poor people.

In regard to these rules, the rural banks have to give loans to the poor people based on their

properties, income sources etc., this helped the poor people to borrow money from the banks.

By having the credit from the banks most of the people either started their own businesses or

invested them in agricultural sector to gain profits and repay the credit to the banks [ CITATION

Piy \l 1033 ].

4.1.2 Informal sector institutions:

The informal financial sources generally include funds available from family sources or local

money lenders. The local money lenders charge high rates, generally ranging from 36% to 60%

interest due to their monopoly in the absence of any other source of credit for non-

conventional needs. Chit Funds and Bishis are other forms of credit system operated by groups

of people for their mutual benefits[ CITATION Piy \l 1033 ].

The NGOs have started educating the poor people by certain programs that made them realize

the monopoly power of the money lenders and the poor people also knew how to save and

utilize the money. NGOs in doing these programs were mainly categorized in to two models:

Group Based Financial Intermediary and the NGO Linked Financial intermediary. Most of the

NGOs like SHARAN in Delhi, FEDERATION OF THRIFT AND CREDIT ASSOCIATION (FTCA) in

Hyderabad or SPARC in Bombay have adopted the first model where they initiate the groups

11
and provide the necessary management support. Others like SEWA in Ahmedabad or BARODA

CITIZEN's COUNCIL in Baroda pertain to the second model [ CITATION Piy \l 1033 ].

These NGOS mainly help the Self Help Groups where each group consists about 10 to 15

members. Where each of these members saves certain amount of money (60cents) and this

money is saved in the local banks. When a person in the group requires money, he/she is

provided the loan from the bank by the NGOs. In some cases the money is directly lending to

the poor people by the NGOS itself. By this way the poor are helped a lot in terms of getting the

money from the bank at lower interest rate. Considering all these the organizations in India that

involved in micro finance are categorized as wholesalers, NGOs supporting SHG federations and

NGOS directly retailing credit borrowers[ CITATION Piy \l 1033 ].

Some of the NGOs supporting SHG federations include SEWA in Ahmadabad, SPARC in Mumbai

etc., there are very few NGOs that provide finance directly to the poor people, and these

include institutions such as SHARE in Hyderabad, ASA in Trichy. Wholesalers include NABARD,

Friends of Women's World Banking in Ahmadabad [ CITATION Piy \l 1033 ].

4.2 SHGs (Self Help Groups):

SHG is group of about 10 to 15 poor people from village who come together addressing a

common problem. In many cases, the SHG members are women. They collect small amounts of

money (about 60 cents) on a regular basis and use this money to make small interest baring

loans to their members. As the group gains faith in the bank’s the members are issued loans

more frequently. In most of the cases, SHPI (Self Help promoting Institution) help these SHGs to

function effectively. The SHPI educates the SHG members to sustain financial stability. With

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 increasing population in the rural areas in India, each state has many SHGs which are

functioning for the welfare of its members. As the number of SHGs is increasing rapidly, the MFI

(Micro Financial Institutions) are also growing at a brisk rate. [ CITATION NAB06 \l 1033 ]

4.2.1 SHGs Linkage with banks:

In 1992 the initial SHG-Bank linkage program has been started to develop the number of SHGs

in the country. With promising results from the initial program the Reserve Bank of India (RBI)

issued instructions to the banks in 1996 to cover the SHG financing as a mainstream

activity[ CITATION NAB06 \l 1033 ] . SHPI takes care of lending money from the banks to the SHGs.

This browed money is utilized for growing the economic standard of the members in the group.

In India on an average the poor people make about $3 to $4 per day which is very low to lead

their families. Most of the people will be in need of excess money to run their families. The

poor families in many states of India are run by the women. The SHG bank Linkage programs

are mainly performed in three models:

1) Model 1- SHGs formed and Financed by banks

2) Model 2- SHGs formed by formal agencies but directly financed by the banks

3) Model 3- SHGs financed by banks through NGOs and other agencies as financial intermediaries [

CITATION NAB06 \l 1033 ].

Function of each model is entirely different from one another but the ultimate output is helping

the poor people to sustain the economic stability.

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4.3 Microfinance to Microenterprise:

As the members of SHGs attained experience of using the money they turned out to become

micro entrepreneurs, but attaining money was a big issue. By SHGs-bank linkage programs the

older members of the SHG groups are benefited in attaining the bank loans to start their own

business.

5. Research Findings

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Microfinance in India is playing a vital role in the development country’s economy and also

developing the living standard of the poor people from rural areas. In most cases microfinance

targets SHGs in order to develop the poor by providing the financial support and educating

them.

5.1 SHGs

A typical SHG group comprises of about 10 to 15 members who save the money and use the

saved interest money for the welfare of the group members. India is classified in to 29 states

and 7 union territories, where each state is divided in to several districts and mandals. For

example: if we consider Andhra Pradesh state it is divided in to 23 districts and about 794

mandals. Each mandal is divided in to several villages. So Villages are governed at mandal level

then at district level. (From Appendix figure 1) one village organization consists of 15-20 SHGs,

moving to the higher level each mandal samakhya(MS) consists of 20-40 village organizations

(6,000 – 10,000 members) and the district samakhya consists of all MS (about 2-5 lakh

members).

So targeting SHG group is a great option to promote the bio sand water filter. Moving from top

of the hierarchy the product can be targeted at any level.

5.1.1 SHG Model:

At initial stages, SHG is a group consisting of 10-15 members, where each member contribute a

little amount of money to the group which is saved in the bank and when a member of the

group is in need, money is lended from the bank. But with development of micro finance

15
institutions and NGOs the SHG members are taken care by various sources to overcome their

economic instability. NGOs directly help the SHG member or they would help the SHG groups in

getting the money from the bank. NGOs in some cases take care of educating the SHGs. Even

the rural banks (at district level) take care of funding the SHGs with some terms and conditions.

SHGs bank linkage is very important as they are the primary sources for the poor families in

lending the money at lower interest rates[ CITATION Tow06 \l 1033 ].

5.1.2 Progress of SHGs:

The conceptual thinking behind forming the SHGs is to collectively help each other to overcome

the financial problems. Over the years the SHGs have grown in number and now they are

dominant in micro financing field. NABARD has played a key role in development of SHGs and in

linkage with the banks. Micro enterprises are one area that the SHGs are made to target at in

overcoming their financial problems. The development of SHGs can be seen in three levels:

1) At the first level households use microfinance to meet survival requirements where

small savings and loans serve as a buffer in the event of an emergency or to smoothen

consumption or even service previous debt to give them more liquidity during lean

times [ CITATION NAB06 \l 1033 ].

2) At the second level, subsistence needs are met through microfinance, where a

household begins to utilize microfinance to meet working capital requirements in

traditional activities [ CITATION NAB06 \l 1033 ].

3) At the third level as households reach a stage where they can assume a higher degree of

risk, microfinance would be used to invest in setting up an enterprise or facilitating entry

16
 into employment in one way or the other in order that the household becomes

sustainable [ CITATION NAB06 \l 1033 ].

Looking at the three levels the microfinance is helping the poor people to live in a better

way. As the time is increasing the members of SHG are trained to manage the finance in a

better way.

For example: if we consider the SHGs in Andhra Pradesh, as the SHGs got older the people

are trained such that they were made as successful entrepreneurs. Many SHGs were

provided money to start their own business individually or as a group. Most SHG groups

started producing local spicy products such as papads, achars etc,. SHPIs have helped the

SHGs a lot in training as to become good entrepreneurs and they also play a major role in

providing the financial support to start a business for the SHGs [ CITATION Tow06 \l 1033 ].

5.2 SHG-Bank linkage program:

SHGs are the group of members formed informally to overcome the financial crisis among the

group. NABARD has started SHG-Bank linkage program in 1992 to overcome the gap between

the banks and SHGs. This linkage made banks to trust the rural people and lend them credit

with low interest rates. This program passed through several stages, in initial stages (1992-

1995) a pilot project was tested and after its successful results, in 1996 the expansion of the

SHG-Bank linkage program took place. The SHG-Bank linkage program covers about 570

districts in the country. The SHG-Bank Linkage Program has been acclaimed as the fastest

growing and highly cost effective microfinance initiative in the world which has enabled millions

of poor families to find access to the financial services offered by the formal financial system

17
[ CITATION NAB06 \l 1033 ] . Several surveys have proved that this program was beneficial to both

the parities.

5.2.1 The SHG-Bank linkage program mainly performed in three models:

1) SHGs formed and financed by banks:

In this model the SHGs are formed by the banks and they are financed directly by the banks.

This type of model is most commonly practiced at present. About 20% of the SHGs are financed

by this model.

2) SHGs formed by formal agencies (other than banks like NGOs) but financed directly by

banks:

In this model SHGs are formed by the NGOs and other organizations that take care of the

SHGs. About 70% of SHGs come under this model and in model the SHGs are completely

taken care by the NGOs where the SHPIs, NGOs take the responsibilities of educating and

training the rural people. The money is directly lended to the people from the banks.

3) SHGs financed by banks through NGOs and other agencies with financial intermediaries:

In this model, the SHGs are financed by the banks through NGOs with financial intermediaries.

When large amount of money is lended to the SHGs some financial intermediaries like NBFC

(Non-Banking Finance Companies) play the role of intermediary between the SHGs and the

banks. About 5% of the SHGs are financed by this model [ CITATION NAB06 \l 1033 ].

The achievements under the SHG-Bank Linkage Program have been uneven in different regions

of the country. As at March 2004, the share of different regions in the program was:

Northern 5%

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East/northeastern 16%

Central 12%

Western 5%

Southern 62% [ CITATION NAB06 \l 1033 ]

This share has increased a lot in recent times due to the effective work of NABARD and the

SHPIs. The SHG-Bank linkage is strong in the southern region especially in Andhra Pradesh. Due

to the linkage of SHGs with the banks many of the poor people are getting finance to solve their

problems.

5.2.1.1 Impact of SHG-Bank Linkage program

It has reduced the number of informal money lenders and other non-institutional sources.

It has helped the poor family children to take good education and solved many financial

problems.

It reduced the poverty of people by increasing the incomes.

It has empowered women by enhancing their contribution to household income, increasing the

value of their assets and generally by giving them better control over decisions that affect lives [

CITATION NAB06 \l 1033 ].

5.3 Expanding Financial Services Access for the poor:

The Transformation of SPANDANA

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In India each state has a large number of NGOs and MFI that are in function. For example in

Andhra Pradesh we have a lot of NGOs that care of the poor people. NGOs such as APMAS in

Hyderabad, SPANDANA, ARISE in Godavari and many more are fighting for the welfare of the

poor.

Let’s consider SPANDANA as an example and see how it functions:

5.3.1 Background

Spandana started its operations in 1998 as a NGO, incorporated as a society with focus on

microfinance. Spandana started its operations like many other NGOs, focusing on microfinance

and other operations. The main aim of Spandana was to help the poor people both in rural and

urban areas. Two years of its growth in the society, Spandana started to focus on micro finance

as a major function, leaving all other functions and they turned out to be an MFI (Micro

Financial Institute)[ CITATION MSS05 \l 1033 ].

At initial stages Spandana was funded by various organizations such as RMK (Rashtriya Mahila

Kosh), FWWB (Friends of Women’s World Banking India) etc, which led the organization to take

responsibilities of SHGs and individuals. It even started several programs similar to Grameen

Model (model followed in Bangladesh for the development of poor people) which succeeded a

lot and brought good fame for the organization. Many of the Spandana promoters trusted in

the organization and agreed to do a long term micro finance because:

1) It allowed the institution to start small, with minimal capital.

2) There was no need to service investors.

3) On attaining long term sustainability there was a chance of growing the organization

apart from micro financing [ CITATION MSS05 \l 1033 ].

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At present scenario (Till August 2009), operational highlights of Spandana are:

Presence in states 10
Number of branches 1,136
Number of centers 109,581
Number of groups 336,181
Number of clients 3,127,784
Number of active borrowers 2,913,615
Loan outstanding 2,333crore RS
Total staff 7,874

The stats (figure above) show how big the organization grew in 10 years to help the poor. Most

of its operations are carried out in Andhra Pradesh. With great success, Spandana started its

own program that is similar to Grameen model followed in Bangladesh. In this model around

four ten member groups were held a meeting at a center to discuss their problems and to find

the solutions. This was even practiced in urban areas also.

(As on July 31 2009) Having tied up with about 31 big banks like HSBC, BANK OF INDIA, ICICI

BANK etc, Spandana offered many loan products to the poor people to improve their life style.

Some of the loan products are:

General loans: Meant for daily wage women labourers for Income generation and consumption

purpose with a loan size of between Rs. 2,000 and Rs. 20,000.

Small Business Loan: Meant for small business people with daily cash flow with a loan size of

between Rs. 4,000 and Rs. 20,000.

Micro Enterprise Loan : Meant for salaried people with a loan size of between Rs. 25,000 and

Rs. 200,000.

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Agricultural Family Loan: Meant for small and marginal farmers with a loan size of between

Rs. 5,000 and Rs. 30,000.

Dairy Loan: Meant for milk collection agents and milk producers with a loan size of between

Rs. 10,000 and Rs. 100,000.

Farm Equipment Loan: Meant mainly to cater to the needs of Small and Marginal Farmers

with a loan size between Rs.50, 000 and Rs.350, 000 [ CITATION SPA09 \l 1033 ].

By analyzing the loan products, we can know how well the organization is targeting the poor

families in growing. The organization is providing great financial assistance to both urban and

rural areas.

5.3.1.1 Success Story of a client (SPANDANA)

There were poor people who gained a lot from this organization, one such successful story of a

woman Ramalatha is as follows:

“It was a difficult time for me (Ramalatha) to get the loan from the money lenders as I had no

worthwhile assets to place as collateral .This disabled me from providing education to my

children. Really it was the moment where I was in the need of money to support my family. I

came to know about the micro lending institution by name Spandana which was just started in

our place (Kachiguda, Hyderabad). I have availed the opportunity by joining as a member in the

group and had taken a loan of Rs 8000/- and started a petty shop, which could fetch me

earnings of Rs.500/- per day. Subsequently I have got a loan amount of Rs.10000/- and

Rs.15000/-. Thus I could say about the words of success which helped me eventually to inherit

22
my property with a refrigerator, color T.V. and a two storied building at my place” [ CITATION

SPA09 \l 1033 ].

SPANDANA is not only the organization that has grown a lot; there are hundreds of such

organizations. This example clearly shows how the MFIs, NGOs are playing a vital role in the

development of the poor people.

6. Recommendations

Basing on the research analysis and findings the following recommendations were made.

6.1 Microfinance and SHGs

As the microfinance is playing a dominant role in the functioning of SHGs and in development

of the country’s economy, its implication applications to microenterprise can easily be studied.

SHGs are one area where the Bio sand filter can be targeted at. With increasing number of SHGs

23
in India targeting the end users as SHGs a very good option. One main reason is, members of

the SHGs are from rural areas and mostly are from poor financial background. Even these

members are not educated and they don’t stay in a very hygienic place. So by targeting these

people will help them in improving their health standards. In rural parts of India the usage of

impure water is more which is leading to lots deaths due to various diseases. To overcome all

these factors and provide clean and safe water, it is recommended that the SHGs are to be

targeted.

Educating these people can be made with the help of SHPIs (Self Help Promotion Institutes),

from the findings and analysis of SHG the role of SHPIs can be understood and their importance

can be understood. SHG member are trained to manage the financial, social aspects by the

SHPIs. So while promoting the Bio sand water filter to the SHGs, SHPIs play a key role in making

them educated. Even dealing the local people is much easier for them. SPHI like MYDRA,

PRADAN, MAVIM, DRDA etc can help in promoting the product.

6.2 Micro Entrepreneur’s:

From the research findings the micro-entrepreneurship can be targeted at various levels. At

initial stage of the product implementation, micro-entrepreneur can be made from any one of

the SHPIs. This is mainly due to:

1) SHPIs can handle the SHG group members very well, they can educate them.

24
 2) As each SHPI deals with many SHGs in the state it would be easier for them to make the

product successful.

3) When the product reaches the end user we need a person who can take care of the

product installation and financial aspects. This can be done by SHPIs easily because they

meet the SHG members more frequently (bi-weekly meetings of SHG groups).

The other source of micro-entrepreneur would be VOs or MSs, because 1VO=150 to 200SHG

members and 1MS=20 to 40 VOs=6,000 to 10,000 members. So depending on the area and

requirements the VO or MS can be targeted as micro-entrepreneur.

As the product sales increases (In second phase of product) one of the SHG members can be

targeted as a micro-entrepreneur. With the individual interest and an effort to become an

entrepreneur can also be encouraged to become an entrepreneur.

6.3 SHG-Bank Linkage Program:

The research findings and analysis show how this program evolved and how beneficial is for the

poor families in India. As the Bio sand filter can be targeted at SHGs, this SHG-Bank linkage

program can help for the business development. The product can be delivered to the SHG

members by various sources, but the members of SHG are very poor people they are in need of

money. So by helping them to get a loan from the bank through SHPIs and NGOs they can

utilize this Bio sand water filter.

25
 7. References

Bibliography
(n.d.). Retrieved from http://en.wikipedia.org/wiki/Microfinance

(n.d.). Retrieved AUGUST 2009, from SPANDANA:

http://www.spandanaindia.com/updateofoperations.htm

26
(n.d.). Retrieved from Hydraid: http://www.hydraid.org/problem/

(n.d.). Retrieved from world bank: rural.nic.in/world_bank/AP_presentattion.PPT

AbayaAstam. Hyderabad: Rural development of Andhra Pradesh.

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http://www.indiainbusiness.nic.in/whyindia.htm

Appendix

Figure-1

Zilla Samakhya (All MSs

in the district) 2-5 lakh
members
27
 Mandal Samakhya
(20-40 VOs = 1 MS)
6,000 – 10,000 members

Village organization
(15-20 SHGs = 1 VO)
150 – 250 members

Self help groups

(10 to 15 members = 1 SHG

(Source: rural.nic.in/world_bank/AP_presentattion.PPT )

28