Formation of Groups (Samity)

Formation of samity is the 1st step in microcredit operation. Padakhep forms homogeneous groups with the beneficiaries. A group consists of 15-30 members generally, with an average number of 20 in each group. The purpose of samity is to build discipline, unity and solidarity among its members. Weekly meeting, group savings, fund generation, realization of credit installment, process of new credit proposal, decision making etc. are its regular activities. These activities are encouraging the poor people especially the rural women towards development, their leadership capacity and enhancing their participation in social functions.

Micro savings

Savings mobilisation by the samity members involved in microcredit is mandatory and is considered as an important and integral part of microfinance operation. Regularity in savings indicates existence of better discipline in the group and its credit activities. Group members can use savings to overcome the odds or unfavorable conditions by using the money saved. By savings program, they can also enhance their capital and become better off. Padakhep has given utmost priority to savings of the members.

Savings products include:

Regular savings: Regular savings is the prerequisite to be a member of Padakhep microcredit program. For creating own capital, Padakhep accumulates the small savings of individuals. Under this facility, members of Padakhep save particular amount per week by using Pass-Book in scheduled group meetings which are deposited to banks through field workers. They get their interest as per bank rate.
Voluntary savings: Padakhep has initiated voluntary savings along with the regular savings. In this case, members are allowed to deposit higher amounts along with regular savings and always enjoy the right to withdraw the savings with interest in their crisis period.
Special voluntary savings program (SVSP): Padakhep looks after its members through this special savings program which was introduced to support member's family further. This program is of two kinds: (1) monthly and (2) one time. The member of the program can save their money either in monthly or in one time savings program. The interest rate is 8% in monthly SVSP and 13.8-15% in one time savings program. SVSP includes the provision of withdrawing the deposited amount with proper interest rate after a certain period. The members also have the right to collect only their service charge and met their family expenses in crisis period.

Micro Insurance/Member Welfare-Fund

Padakhep looks after its beneficiaries through 'Member Welfare Fund' since 2000. Before disbursement of the main credit, 1% of the loan amount is realized cash as premium and deposited in the member welfare fund. This money will not be refunded during the beneficiary's lifetime. Beneficiaries whose crops, homesteads and credit-supported small trades are affected or damaged due to natural or man-made disasters are assisted through the welfare fund thus generated. In case of death, beneficiaries are exempted from loan after adjustment with their welfare funds (savings). If their husbands or the sons implement the IGA on behalf of the beneficiaries, the former are also exempted from the loan after adjustment with welfare fund in case of their death.

Microcredit

Padakhep started microcredit service with the aim to create self employment which reduces their dependency on the moneylenders and also promotes women's empowerment. Padakhep develop groups with the beneficiary members. Members have to wait for only 7 days after their registration to get the first loan. Commonly, weekly or monthly installment process is followed for repayment and the first installment process is given in the 2nd week of the loan i.e. borrower gets two weeks grace period. The service charge is calculated flat on the principal of the loan. Loan size of Padakhep ranges from Tk. 2000/- to Tk. 40000/- as per requirement. Padakhep provides collateral free loan to the poor in both rural and urban areas in a simple, efficient and affordable manner. The borrowers use these loans to engage in various income generating activities to improve their socio-economic status. They repay the loan installments from a portion of profit. A small part of the profit is also used to buy necessary things for the family. A large number of borrowers are becoming self-reliant gradually through operation of the IGAs.