Lending Methodology

"ADS" shall adopt a hybrid of the Best practices to suit local conditions. It lends to groups of 10- 20 women each and designates the group the ultimate guarantor of each of its members. If one member does not repay, no individual in the group is eligible to receive another loan. The keys to this approach include:

  • Social Collateral :

    The poorest do not have physical assets that can be used as security. Instead, borrowers organize themselves into groups that take collective responsibility for repayment of individual group members.

  • Doorstep Banking :

    Providing financial services in villages enables the rural poor to earn wages for the day and avoid the costs of travel to mainstream banks. The illiterate poor are also unable to complete loan applications, which often require several trips.

  • Customized Products :

    "ADS" designs loans with small, weekly repayments corresponding to wage structures, consumption and income generating loans to prevent emergency "distress sales," and small first loans to inculcate credit discipline and collective responsibility.

  • Focus on Women :

    "ADS" works exclusively with women because they are the most marginalized among the poor and because they tend to invest the majority of their income into the household and for their children.

"ADS" uses improvised Poverty Progress Index (PPI) tool to identify the poor clients .The poverty status of prospective clients would be determined by the Branch Manager through physical verification of houses.

The prospective poor women client form a Center among 10-20members with the same poverty status, Group under goes at least 2 days of Continuous Group training (CGT) in the objectives, rules & regulation of "ADS", with each member passing an oral test in Group Recognition Test (GRT) at the end of CGT. At least 10 clients must pass the GRT before Center (JLG) can be established.

The Branch Manager/ Area Manager would be responsible to conduct the Group Recognition and focus on seating arrangement of the client is according to the name specified in the GRT format while physical verification Score on Housing Index, Asset verification, client signature and their photograph would be verified thoroughly and carefully.