INDIAS LARGEST MICROFINANCE ORGANISATION

a. Critically examine the strategies and principles adopted by SHARE Microfinance Ltd.
since its inception to grow its outreach and loan portfolio.
Suggested answer
SHARE, one of the largest microfinance institutions in India, started its operations for the
poor in 1989 as a not-for-profit society. The microfinance firm had taken over from where no
national banks would provide their services. Its strategies and principles were significant
economic empowerment of the marginalized sections in society, particularly poor rural
women across India.
Grameen model
SHARE had adapted Grameen methodology in its operations by focusing on loaning to
groups of women. The women had formed themselves into groups of five members each with
the general criteria that they had to be of the same age group, of the same area, and known to
one another. Family members or relatives could not be part of the same group. The principle
behind such homogeneous group was to strengthen crisis coping mechanisms, diversify
income or earning sources and build assets. The focus on women was to ensure that the
benefits of increased income reach to the general welfare of the family, particularly children.
Awareness program
Members of each group receive seven days of training on various aspects of the operating
model, during which they learn their own signature to have an identity for themselves. Eight
groups come together at a centre for weekly meetings. Field staff members facilitate weekly
group meetings, in which members undertake the responsibility of approving loans and
disbursement, and ensuring repayments. Members go through additional social development
programs that cover topics ranging from childrens education to health, nutrition and
sanitation. Such strategy expected to have an immediate impact on a wide range of poverty
reduction objectives such as income, health, nutrition and education and improvement of the
status of women.
Re-payment of loan
The loans were given at a simple interest and had to repay in 50 weekly installments. There is
no collateral to back these loans and repayment is ensured using social/peer pressure, as the
group is responsible for collecting the loans. To ensure that the loan is utilized only for the
intended purpose, the money is given in a staggered manner to the group members and
subject to satisfactory assessment by the field credit officers.Through its no-tolerance and
joint liabilityapproach and other business development services, SHARE reached out to help
these women change their mental attitude, thereby contributing to the growth of sustainable
communities.
Other Facilities
SML also concentrated on providing savings products to its members though SHARE India
MACS. This facility might help them achieving childrens education, getting health care and

minimizing absence from work. Introduction of Computers and MIS systems reduced the
workloads and increased the operational efficiency. The firm also designed programs (vehicle
loans, mess facility, TV sets in offices) to meet the needs of the staff and hence able to retain
them as clients. Hence, the participants had been increased that helped the company to attain
sustainability.
Growth indicators
The operation of SHARE was very cost-effective, because initial investment was recycled
and reused. The operating costs had decreased with the scale of outreach. SHARE had
transformed itself from a society to a limited company which could result in lending to clients
that are more profitable and thus enabling them to reduce poverty. SHAREs members per
staff ratio and operating self-sufficiency had increased between 1999 and 2005 while cost per
unit of money lent had reduced, showing higher level of productivity per staff member.
Increased loans repayment against the total loans disbursed indicating that the quality of
SHAREs portfolio had not diminished with its rapid growth. Also increased financial selfsufficiency in the same period had been signaling towards positive trend regarding the
financial impact after transformation.
Conclusion
The consistent effort of the field staffs to reach and to demonstrate a positive impact on the
poorest community helped the members being motivated, confident, self-reliant and
disciplined which was the core principal of the institution. Through Capacity Building
workshops and training program, SHARE provided effective business function such as
strategy, operations and accounting process among the poor. The poorest could definitely
benefit from this microfinance in terms of increased incomes and reduced vulnerability.