Background of Micro Credit and Enterprise Development ProgramTowards the end of 1990s, Sughra Solangi now fully immersed in social welfare works, initiated free-of-service-charge loan for poor women in the agricultural fields. This pioneering endeavor has now expanded to support up-gradation of grocery shops, well repair for cleaner drinking water and goat-raising schemes.
As MRDO was into welfare activities, the credit program was also partially welfare oriented. The amount of loan was given to and was recoverable from mostly individual beneficiaries on easy installments as group formation had not emerged then.
Credit remains a basic need to uplift the living standard of poor people. Thus, MRDO launched its Micro Credit Program (MCED) since its inception in 1993. Its aim is to assist the low-income people especially women of backward communities, in order to increase their income and improve their living standard.
Micro credit enables very poor people to engage in self-employment projects that generate income. It provides microfinance services with special focus on women in order to facilitate them to reduce their susceptibility and fill-in a big vacuum in their life. MRDO began its micro credit program from a small village M. Arab Solangi. It has now expanded widely into two districts, Sukkur and Khairpur. MRDO has disbursed millions to needy villagers mostly female barrowers engaged in three trades, i.e. Enterprises, Livestock and Agriculture Development. The people of both districts appreciate and benefit from such loans, and generate their household incomes and improve their living standard.
This activity serves as the backbone for MRDO’s sustainability and also brings about economic viability for the needy in these two districts.Micro-credit (Small loans)Savings and Resources replication Capacity Building for Enterprise Development Enhance Product development
Micro-credit Saving and Resources Replication
MRDO works for backward people particularly to enhance their funds-raising activities. To bring these communities close together and render financial support on priority basis, it is necessary to offer financial loans for boosting their own businesses or strengthening existent ones. The success testifies the program of micro-credit has proved to be a shot in the arm for the needy villagers.
The Outreach of MRDO’s MCED program includes..
Easy outreach to beneficiaries both existing and new.
Affordable and easily repayable terms for low-income people individually or in groups.
Attractive terms for new entrepreneurs.
Provides access to individuals or groups to reroute their economically disenfranchised resources and increases their economic power and eradicates poverty.
CED enables communities to utilize the local resource at their disposal. They are mobilized and trained to optimize resources, which they previously considered either useless or lacked necessary skills or knowledge to exploit. They are now convinced to save from their day-to-day domestic expenses and develop as many tangible and intangible assets as possible.
Micro Finance Innovation Outreach Program
MRDO initiated this program through Pakistan Poverty Alleviation Fund in 2010 to uplift the living standards of backward rural areas for individuals and/or groups like vocational trainees and disabled persons.
The aim is to improve and increase poor people’s access to a wide range of financial services and products. The program is an integral part of the credit and enterprise development program.
MRDO provides loan facilities to members of CBOs/Groups and individuals of low income families (Poor People) of Pakistan, who engage in small businesses, need to establish or to increase their businesses, but lack easy access to financial institutions to avail such facilities that could strengthen their businesses and uplift their economic conditions. MRDO’s focus remains to service the needy from those areas where its micro credit program exists and they be engaged in their businesses since last two years.
In this sector, MRDO services with loans to those landholders who have small agricultural plots of less then 3 acres. Loan is disbursed for seasonal crops to strengthen poor landholders as well as farmers for purchasing Seeds, Fertilizers and Watering their lands. Technical support is also provided for minimizing input and maximizing output. Recognizing the agro-base and related need of poor farmers of Pakistan, MRDO initiated these loans for them to access inputs like Fertilizers, Seeds, Pesticides, and Renting of land. These loans help sustain the crop till harvest and are recovered upon the harvesting of these.
2.Enterprise (Small Business)
Here, MRDO loans to persons who have small scale business in operation for continuously two years at least. The aim is to help persons whose sources are limited for uplifting and enhancing their existing businesses. After due need assessment, loans for Small Enterprises are given to the group members or local community for a period of one year on predetermined schedules. These are recovered in monthly, quarterly and six monthly installments. The following ventures qualify for such loans: Small shops, Handicrafts, and Sewing machines. These small enterprises flourish and form the base for elimination of poverty from the society.
Livestock is one of the major enterprises in Pakistan particularly in rural areas. MRDO renders livestock loans to rural women for income generation activities at household level. Livestock loans help increase income of economically poor families. The duration of these loans is for one to two years with recovery on yearly and six monthly cycle. These are for Poultry Farms, purchase of Goats, Buffaloes and Cows. Loans are in cash for purchasing above animals or are directly given in the shape of kids and calves. The poor villagers breed them and earn more and more from the resultant profit upon their produces’ sale. MRDO sets the farmers on a path of self reliance by first nurturing them and once firmly established, makes them independent enough to run ventures on their own capital. MRDO’s strategy engenders sustainability and continues to offer technical support from time-to-time.