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PREFACE

After a relentless efforts and the co-ordination of internal audit staff I could be able to accomplish this book. Hope it would

provide best elements for the new comers to gain sufficient knowledge about the organisation. Further it would initiallyhelpful for the management trainees for capacity building, motivation, through knowledge of the organisation its mission and

vision. The DC/ADC/AC/DO/CO has also been benefitted by it. More emphasis has been given to concise the subject matter

which would be understandable by all.

Sufficient study material has also been amassed and simplified for instant hold of the subject matter by the new

comer.

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INTRODUCTION

Honourable chairman Mr. Khirod Chandra Malick is the founder of Bharat Integrated Social Welfare Agency. While working inthe western Orissa as a Banker visualised the impact of poverty in the western Orissa. This was his turning point where he

had an inner urge to start a philanthropic organisation. Thus BISWA was born with a very well defined mission & vision. It isnow fully committed towards sustainable development of the people with special emphasis on women. During this periodBISWA has expanded to the other states thereby acquiring a status of a prominent national level NGO. At present it hasdecided and planned to create one million employment opportunities by March 2011 and bring down poverty level to 20% bythat time.

Our chairman is a well known social worker and founder of the organisation. At first he had started his career as abanker. He could able to recognise the poverty in Orissa. Looking into the poor financial, social condition of Orissa he felt anurge to start this organisation.

As a chairman of BISWA he looks all round development of the poor and downtrodden people with an emphasis towomen, children and aged. Microfinance, microenterprise, micromarketing, livelihood intervention, natural resource

management, health, education, water & sanitation, social security and capacity building are his noble aim of his profession.With his innovative ideas towards reducing poverty and creating sustainable income source he is recognised and appreciatedby various organisation of national and international level.

The organisation BISWA started from the district of Sambalpur. Todays through it considerable efforts the organisationstands a cross road. With its integrated approach it has emerged as one of the successful organisation in social NGO sector.

Through its holistic approach it has bring development by its tools of microfinance, microenterprises, micro insurance andmicromarketing. Its development programme is for poverty eradication, livelihood promotion, basic health services, water &sanitation, education, social marketing, natural resource management etc.

After a careful study of the organisation and its presence in eleven states of the country and aims at one million employmentopportunities by 31st March 2011.

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SELF HELP GROUP

If we think world as a whole, most of the rural women are illiterate/semi-illiterate, landless and they are economically verypoor, for which they work on daily wages basis for survival. In the year 1998 first time rural women becomes organised intogroups called Self Help Group. The object of SHG is

1. To promote saving and credit activities.2. Discussion of many issues pertaining to their socio-economic educational and health status.3. To promote employment of group member in to production unit.4. Promotion of income generation program in self help group.5. Build confidence among the women group member for better decision making and it will leads to participate and

contribute in general social and political matter in their respective villages including women right.

SHG is group of rural poor who have volunteered to organise themselves into a group for eradication of poverty of themembers. The members are agreed to save regularly.

Generally a self help group is consists of 16 to 20 persons. All members of the groups should belong to family below povertyline. The group should not consist of more than one member of the same family. A person should not be a member of morethan one group.

The groups should be in the form of regular meeting i.e. weekly in democratic manners. They should be allowed freeexchange of views, participation by the members in the decision making process.

The group should able to draw up an agenda for each meeting and take up discussion as per agenda.

The member should have regular saving. They should collect it from all members regularly in the group meeting. The savingcollected will be group corpus fund. The group corpus funds should be used for advance loans to the members.

The member in the groups meeting should take all the loaning decision through decision making process.

The groups should be able to prioritise the loan application, fix repayment schedules, fix appropriate rate of interest for theloan advances. They should be able to monitor the repayment of the loan instalment for time to time.

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The groups should operate a group account preferable in their service area bank branch so as to deposit the balance amountleft with the groups.

The groups should maintain basic record like minute book, attendance register, general ledger, cash book, bank pass bookand individual pass book.

BISWA APPROACH

BISWA is a community based organisation in the voluntary sector. It is an organisation working directly with the poor andmarginalised. The organisation is registered under society registration acts XXI of 1860 and FCRA 1976.BISWA is alsoexempted under section 12A and 80G -5(F) of the Indian income tax act. Our BISWA started a humble community basedagency and grown into a leading national level organisation. Without intervention in social development, microfinance andmicro enterprises as many as 3.5 lacs families has been extended credit support for entrepreneurship. The goal of BISWA isto generate 1 million job opportunities by March 2011.BISWA is working at all districts of Orissa. Further it is working 10Indian states i.e. Chhattisgarh, Bihar, Rajasthan, Uttaranchal, Madhya Pradesh, Uttar Pradesh, Nagaland, West Bengal,

Jharkhand and New Delhi. Our development outreaches about 10 million people in the country.

BISWA MISSION

To make real and lasting social, economic, psychological and spiritual impact on individuals, help build strong cohesivecommunities and generate substantial productive employment opportunities by increasing availability of a wider range ofservices.

BISWA VISION

Just and equitable society with greater emphasis on spirituality, compassion and peace of earth.

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BISWA STRUCTURE AND PROGRAMME

BISWA has extended it working in different sector for the well being of poor and downtrodden people.

1. Social development2. Microfinance3. Micro insurance4. Microenterprises5. Micromarketing

6. Civil society network7. Research & innovation

1. SOCIAL DEVELOPMENT

Our holistic organisation BISWA has entered into social development sector to empower community member educationally,socially and economically to live in harmony and peace. Our organisation is socially working in the following sector.

a. Water & Sanitation Programme

Water and sanitation means to provide safe water, sanitation and hygiene to the needy people. Diarrhoea and other waterborne illness thrive where people dont have safe water, adequate sanitation facilities. Every year 2 to 4 million people diefrom diarrhoea and other water related diseases. One quarter of all childhood death is causes by unsafe water, sanitation andhygiene. Ensuring reliable and affordable services can reduce illness and death from diarrhoea and other water bornediseases. Increase economic opportunities for household and communities improve school attendance especially by girls.

BISWA APPROACH

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BISWA is well known identified as the key resource centre for water and sanitation mission in western Orissa. The activitiesincludes individual house hold latrines, extending swajaldhara , ground water harvesting for water autonomy, irrigation etc.

We support the government in reaching rural household to ensure that the govt programmes are bringing the real benefit to

the poor. BISWA is keeping close contact with the govt and with the help of them individual house hold latrines are providedto the needy people. Further our organisation is ensuring swajaldhara, ground water harvesting. Further it is looking after theirrigation facilities of poor villagers for cultivation.

Toilet under subsidy only available to BPL families. Individual toilets are promoted under Rs.2200 TSC subsidy scheme.BISWA has an implementation root chart to water and sanitation mission to achieve the projected goals i.e. construction of 1lacs toilet by March 2010.Further 15 villages have been considered for Nirmala gram through our efforts.During the last quarter 636 nos of SHG have constructed 30223 of toilets in 405 villages under our initiatives. Apart from this2000 of awareness camps have been organised to reach out 100000 number of household. BISWA ensures the release ofsubsidy from Govt. Within one month of completion of toilet construction. To achieve above goals continuous liasioning withthe panchayats, block offices, Dist. administration and RWSS official is required.

b. Health

BISWA is implementing reproductive & child health programme of govt. Of India. By its 150000 people has been benefited byit in Sambalpur district. So many Eye camps are also organised. Further drug distribution centre are also established. Healthcare also been taken through hospital tie-up with insurance cover.Health camps are also been organised in different district to provide health awareness among people.

Rehabilitation & Re- integration

In order to socialise and rehabilitate the leprosy cured patient Hatibadi healths home have been established. Hatibadi healthhome have been transformed in to a resources centre to sustain inmate and enable them to live with dignity.

Education & Shelter

34 innovative schools in Sambalpur, Deograh, Koraput and Kalahandi have been established. It is implementing elementaryeducation based in the state course curriculum. It is also based on water harvesting, agriculture, food preservation, animal

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care, handicraft and herbal health care. It is stressing in the children to join the main stream educational institution to ensurezero drop out.

Prevention Effort

BISWA initiated in prevention in Trafficking of children and women and rehabilitation of people displaced by industrialisation.This apart BISWA have been assisting the govt of Orissa in running a Swadhar Home for destitute women in difficulties,trafficking women. In addition to this 24 hour helpline is provided for those in need of family counselling.

Innovation

BISWA has developed a number of new approaches in the area of education, self help and microenterprise. For exampleJhakarbahali and Hatibadi experiment are well recognised.

Nutrition

Proper nutrition improves children health and the quality of their life for years to come. Two billion people in developmentworld suffer from diet lacking essential vitamins and mineral. The most critical time for addressing childrens nutrition isconception through 24 month of age. We are working to improve the diet of people in the developing world and ensureproper nutrition for young children.

Maternal, Newborn and Child Health

Every year more than a half a million women die and many more suffer complication from child birth. Death and disabilityamong mother greatly effects the health well being of children. Nearly 10 million children die each year from related healthproblem. Many young children die from diarrhoea, pneumonia and malaria. Despite of the fact that we known how to preventor treat this condition. Poor nutrition is an underlying cause for many of this death. Women and children could be saved ifthey have access to existing treatment and prevention strategy. Our BISWA is working to improve access to prevention andcare that can save many of these lives.

HIV/AIDS

HIV/AIDS is a preventable, treatable disease and millions of people are living with it. Many countries have made progress inreducing the number of new HIV infection through comprehensive prevention efforts. A vaccine and other new prevention

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option are urgently needed. Despite the proven effectiveness of existing prevention approach, they have limitation. Thedevelopment of vaccine and other new prevention is critical for successfully fighting the epidemic, especially in developingcountries.

HIV weakens the immune system leading not only to AIDS but also to deadly disease such as tuberculosis. Infectionwith HIV increases the chances of becoming infected with tuberculosis and chances that someone infected with TB willdevelop the active disease. In fact TB is now leading cause of death among people with HIV/AIDS. We cannot effectively fightAIDS without also fighting TB.

INDICATORS OF DIGNIFIED LIFE

1. Good health2. Better hygiene3. Social security4. Sustainable livelihood5. Financial security

6. Healthier environment

Key player of BISWA water and sanitation programme

1. SHG2. BISWA3. Government

Role of BISWA

1. Selection of the villages2. Selection of the potential SHG3. Training need assessment

BISWA & SHG

1. Sarpanch consent letter for availing subsidy2. Ensuring active involvement of the PRI member

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3. Selection of beneficiary

A SUSTAINABLE WATER SANITATION INTERVENTION

1. BISWA ensure the release of subsidy from government within one month of completion of toilet construction2. As per the BISWA administrative structure, the community organiser is continues the sustained hygienic education.3. Any technical problem is mitigated through the civil engineers working in BISWA water and sanitation department.4. Sanitation credit can be in many cases precedes/supplement or follow credit for subsidiary enterprises creation.

IMPACT ECONOMIC INTERVENTION

1. BISWA SHG earn profit from the construction work2. Selected SHG undergo mason training3. Subsidiary enterprises are created like the soap, phenyl and broom making units.

2. MICROFINANCE

Microfinance is a small finance ensuring financial services at affordable interest rates for the poor and the needy at their doorstep. Nearly 40% of India population lives in poverty. In India we find that many are poor because of one simple reason that islack of regular income. So for this 90% of rural poor are deep in debt. At last they turn to money lender who charges 60% to120% interest per annum or even more. In consequence they are pushed to extreme poverty, so microfinance is a burningillustration to make viable to the poor, resulting increasing household income and saving.

So our BISWA facilitates formation of SHG to save, share and built capacity. Small loans for the business are provided andcollected through individual member in SHG.

As a result of such economic development initiatives many small business expand and become viable. As a result,poor families have enough to feed their children and send them to school. The marginalised poor develop their business andmanage to live a decent life. This approach is very powerful in lifting communities from economic poverty, ultimately leadingthe community to be self-reliant and live with dignity.

BISWA APPROACH

Our organisation BISWA has already extended credit worth Rs.3, 92,612,829/- to 31180 SHGs with 499707 members up toSeptember 08.

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BISWA has also promoted a non banking financial company (NBFC) to upscale its credit operation. The NBFC is registeredunder RBI. BISWA is operating its microfinance programme at 65 districts in 11 states of India.

Total SHG formed - 31180Total Member enrolled 499705Total Federation Formed- 233Nu of Loan Disbursed - 29090Amt of Loan Disbursed 3,92,16,12,829Nu of Loan Outstanding- 20682Amt of Outstanding - 1,304,179,148

3. MICROINSURANCE

Micro insurance is protection of poor people and their families against specific perils like death, illness, weather catastrophesetc. In principle micro insurance work like any typical insurance business. That it is a group insurance that can coverthousand of customer under one contract. Micro insurance require an intermediary between the customer and insurancecompany. Preferable this intermediary is a non government organisation (NGO) or microfinance institution. Poor people oftenlive in an area prone to flooding or work in factories under very hazardous condition. The fact that they have little money to

respond to those risks makes them even more vulnerable. For these poor micro insurance is a form of risk managementsaving and credit may help people cope with minor and foreseeable financial hardship, such as education cost. Microinsurance serves to cover expensive and infrequent risk such as hospitalisation, death or disability.

It is estimated that only eight million out of the world 2.5 billion poor are now covered by some form of microinsurance. Most remain without access to this critical financial service. In India and china where organisations are estimatedto serve nearly 30 million insurance clients each. The percentage of poor lives insured hovers below 3%. According to thestudy the rural poor not only want insurance to be affordable, but also to protect against high frequency risk such serious illhealth, accident, harvest failure and fire.

Micro insurance like regular insurance may be offered for a wide variety of risks. These includes both health risk (illness,injury or death) our property risk (damage or loss).A wide variety of micro insurance product exist to address these risksincluding crop insurance, livestock/cattle insurance, insurance for theft or fire, health insurance, term life insurance, deathinsurance, disability insurance, insurance for natural disaster etc.

BISWA APPROACH

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Poor households are especially vulnerable to risk during natural calamities. Small emergencies our regular occurrences ofillness and accidents. Microfinance institution like our BISWA has played an active role in protecting them against suchsituation by providing credit support for increasing income earning opportunities. As one of the development intervention andsocial securitys measure BISWA cover its client in three major micro insurance schemes.

1. For life with LIC (Janashree Bima Jojana) & TATA Aig2. For health with (Oriental Health Insurance)3. For asset with (Oriental Insurance Company)

So far as on September 2008 life of 95,411 members have been insured under JBY (LIC) and TATA Aig health of 1,89,257 andasset of 92,339 members are also insured under ICICI Lombard and Oriental Insurance Company.

4. MICROENTERPRISES

In accordance with the provision of micro small and medium enterprises development (MSMED) Act 2006. In manufacturingsector investment in plant & machinery does not exceed five lacs rupees in case of service sector investment in equipmentdoes not exceed ten lacs rupee is called microenterprises.

Microenterprises plays a critical role in the economic development of any economy. During the last few years, NGO havebegun to play a significant role in facilitating the poor to increase their income level through micro enterprises. Selfemployment through microenterprises can play a considerable role in poverty alleviation for the millions of poor on ourcountry.

This programme is being to train the middle our higher level functionaries of different NGO, So that they canunderstand the concept of microenterprise development. The programme is being organised to take the learning back to thecommunity level to generate employment and fight poverty.

Objectives

The principle objectives of the programme on promotion and development of microenterprises are

1. To understand the concept of livelihood, entrepreneurship and microenterprise.

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2. To understand the relevance of marketing in promoting micro enterprise.3. To impart the knowledge among the participant about the various tools used for livelihood analysis, identification of

business ideas, business planning and feasibility analysis.4. To sensitize the participant on the need to analyse the business environment for proper use of the concept and tools.5. Examine the structural characteristics of SHG that are emerging in the rural credit market.6. To analyse the operating system in SHG for mobilisation saving, delivery of credit to the needy, recovery of loan over

dues and linking process with banks.7. To explore the effectiveness SHG in indentifying nurturing entrepreneurial talent among the poor and providing escorts

services in micro enterprises development.

BISWA APPROACH

Aims at creating entrepreneurial attitude reducing income poverty and generating opportunities for self employment. Underthis programme BISWA has already optimised resource support to more than 1 lakh skilled entrepreneurs in Orissa alone.BISWA is to promotion of the microenterprises development institute (BMEDI) a resource centre for development of micro

enterprises. Numerous vocational training programmes including various artisans development programme have beenconducted by BISWA with the joint effort of partners including the government. Besides promoting agro and forest basedmicroenterprises three common facilities centre for the artisan have also been established.

Its strategy:-

1. In order to developed local institute through promotion of SHG2. Skill development of artisans3. Formation of network among artisans4. Market for minority community5. Strengthens of small and microenterprises among minority community.6. Establish of common facility services support centre7. Promotion of handicraft, handlooms and cottage industries.

5. MICROMARKETING

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Developing large scale microenterprises both in urban and rural areas and linking them with market forms to be one of thekey strategies in poverty reduction programme. It is not only help poor to enhance their livelihood income but also bringseconomic and social support in their lives. Micromarketing is interrelated with microenterprise. Without micromarketing theexistence of microenterprise is stop ahead.

Objectives1. Improve the competitiveness of SHG products in the local, regional, and national/international market.2. Achieve economies of scale through collective action for increase production and marketing.3. Diversify in to higher value products that are linked with export global market.

BISWA APPROACH

Marketing of SHG product has possible with a chain of marketing outlet named Laxmipriya. About 2000 SHGs linked withLaxmipriya outlet. They are selling variety of items like tailor made garments, handicraft and handloom, brass and metal,

dhokra, process food material, leaf plate/cups etc. Individual brand by the name Laxmipriya for BISWA agro food product.Odissi for BISWA household product and Shilpika for BISWA artisans product have been developed and registered undertrade mark to promote micromarketing in local, national and international level.

6. BISWA NETWORK

In order to work at grass root level BISWA network has been developed. Further it is promoting position relation betweengovernment and the NGO for development activities.

The main aim of the network is to develop capacity, management abilities and good governance among the partners.To achieve this goal BISWA is also planning to set up a centre for civil society studies that will work towards strengtheninglocal democracy, panchayatraj institution, good governance for pro-poor development issues and democratic accountability.

The centre is also work towards documentation, participation, information, dissemination of best practices in social sectordevelopment, microfinance and microenterprises.

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7. BISWA REASEARCH AND INNOVATIVE CENTRE

The BISWA research and innovative centre (BRIC) is working to promote research, knowledge based and innovativedevelopment issue. A newly formed research advisory council is guiding the BRIC to develop itself as an advanced centre ofexcellence on human development research innovation and extension.

8. MILLENNIUM DEVELOPMENT GOALS

The millennium development goals are eight to be achieved by 2015 that respond to the world main developmentchallenges. The MDGs are drawn from the action and targets contained in the millennium declaration that was adopted by189 nations and signed by 147 heads of step and government during the UN Millennium Summit in Sept 2008.

The eight MDGs are stated below

1. Eradicate extreme poverty and hunger2. Achieve universal primary education3. Promote gender equality and empower women4. Reduce child mortality5. Improve maternal health6. Combat HIV/AIDS, malaria and other diseases7. Ensure environmental sustainability8. Develop a global partnership for development

BISWA APPROACH

By 2011 BISWA has targeted 10 million job opportunities to the people all over India. Further 1 lakh household latrines in tobe launched by the end of March 2011.Further so many innovative schools have been established to provide primaryeducation to the children.

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Bird Eye View

General Body

Governing Body

Secretary Chairman (Chief Functionary)

ManagerAdministration

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Director Operation

Manager,PRO

ManagerInternalAudit

Deputy General Manager

Manager,RDC

ChiefManagerRiskManagement

Assistant General Manager

ChiefManagerState

ChiefManagerZone Chief Manager Audit & Account

Chief ManagerOffice

Administration

ChiefManager IT

Manager HR

Manager/DeputyManagerDistrict

Manager/Deputy ManagerDistrict

ManagerFinance

ManagerAccounts

DeputyManager

ManagerSystem

DeputyManager

AssistantManagerDistrict

AssistantManagerDistrict

DeputyManager

DeputyManager

AssistantManager

DeputyManager

AssistantManager

AreaManager Area Manager

AssistantManager

AssistantManager

AssistantManager

CommunityOrganiser

CommunityOrganiser

SINGLE WINDOW SERVICE

Community OrganizerThe Community Organizer is the first line Person in the BISWA structureFollowed by Area Coordinator, Assistant District Coordinator, District Coordinator, Zonal Coordinator , Head Office Structure.

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Role of Community Organizer (CO)

Community Mobilization.

Promotion of Self Help Groups.

Each Self Help Group should consist minimum of 16 and maximum of 20 members.

The CO should ensure addressing the total need of 25 SHGs consisting of 400 to 500 families.

Responsibilities of CO

Maintain close contact with all the house holds served by him/her.

Conduct weekly meeting of the SHGs.

Ensure to maintain the Meeting/Savings/Loan ledgers of the group along with the group pass book, monthlyreceipt/payment register and individual pass books.

Ensure to discuss individual savings and loan of each member in the weekly meetings.

Conduct concept meeting on Federation Promotion.

Ensure 100% literacy of all the group members and their family members.

Ensure Zero IMR/MMR among the families of the groups under him/her. Ensuring 100% institutionalization of the child delivery among the families.

Ensuring Zero Child labor among the groups .

Ensure Zero drop out among the children of the group members.

Ensuring 100% social security coverage of all the group members through different insurance scheme implementedby BISWA.

Creating awareness among the group members as to the need of Micro Insurance and how to lodge claims.

Marketing linkage of the products manufactured by the SHGs .

Identify the people with disability, HIV, mentally challenged and ensure to inform their details to the AC/ADC/DC .

Ensure installation of Individual House Hold Toilets in each house hold with water connection.

Ensure to organize health/eye camps as directed by the AC/ADC/DC.

Ensure to create awareness among the group members as to HIV/AIDS/Safe Sex/Small family norms/nationalintegration/bio-fertilizer/optimal use of water/environment protection/participation in PR activities/Right toInformation/Reproductive & Child Health/Iodine Salt/different schemes and program of Local Bodies/Govt./BISWA.

Identification of problem with senior citizen & information to AC/DC/ADC.

Ensure proper implementation of all the program/projects of BISWA which is being implemented in the geographicalarea and target group served by him/her.

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Generate loan application as a resolution of the group based on the need of the group.

Assist the Asst. District Coordinator in processing the loan application.

Assist the Area Coordinator to have 100% on time loan collection in respect of his/her groups.

Attend the meetings when called for by AC/ADC/DC/ZC/Head Office.

Interface with the PRI/other community based institutions.

Preparation of Micro Plan in the PRA method of the geographical area covered under him/her. Prepare and submit monthly report/MIS as per the format provided by the AC/ADC/DC/ZC/Head Office.

Area Coordinator

Motivating/Guiding /Training and Follow up of the three number of Community Organizers working under him/her.

Organizing training program, imparting training to the organizers , group members, federation leaders .

Loan Collection from the SHGs.

Deposit of the Loan collection in the bank account of the organization and submission of the deposit slip/loan collectionamount to the ADC.

Ensure proper maintenance of group records, tracking of the loan disbursed , savings of the group savings and

maintaining the quality of the groups.

Responsibilities of the AC

Attending the group meetings along with the CO and motivating the groups for Federation Promotion.

Registration of the Federations .

Conduct the Federation meetings.

Maintain the Federation Registers properly.

Process Documentation of the activities happening at the group level.

Local Area Planning in respect of the geographical area and target group covered by him/her.

Attending the review meeting conducted by ADC/DC/ZC/Head Office as and when required.

Ensuring 100% ON TIME LOAN COLLECTION.

Ensuring to provide loan to all the 75 groups with the three community organizers working under him/her. Ensuring creation of employment opportunity among all the groups under him/her.

Ensuring to achieve the Mission/Vision/Goal/Objective of BISWA through real, lasting and sustainable implementationof the work entrusted to the Community Organizer.

To Meet all the compliances of ADC/Dc/ZC/Head Office .

Provide the pre printed MIS format to the COs and ensure to collect the MIS on time, check it and submit it to the ADC.

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Desk Officer at ADC Office

Each ADC office will be provided with one Desk Officer

Duties of the Desk Officer:

The Desk Officer should ensure proper opening, closing, cleanness , maintenance of the office and the office furniture.

Assist the ADC in conducting the meetings, training program, Manage the office in the absence of the ADC, provideinformation to the DC/ZC/Head Office when called for .

Role of Desk Officer at ADC officeMaintain the following Registers/Files at the ADC Office:

1. Visitors Register2. Attendance Register3. Dead Stock Register

4. Loan collection register5. Sundry/Suspense Deposit Register6. Outward Mail Register7. Inward Mail Register8. Petty cash register9. Movement register10.Leave register11. Review Meeting Register12.Program Register13. Acquaintance Register14.Charges Register15..House Rent16.Stationery Register17.Bank Account Register18.Money Receipt Stock & Issue Register19.Telephone Register20.Loan application received & disposal register21.Letter received/sent file

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22.Group details register/file23.Baseline survey file.24.All the registers relating to Federations

Duties of Desk Officer at ADC Office

Ensure to advise the DC/ZC/HO bank deposit made at the ADC office level.

Ensure to deposit any amount of cash deposit received at the ADC office level in the bank account of the Organization.

Ensure to maintain the DCB of all the 225 SHGs under the ADC properly.

Ensure to collect/check the monthly returns from the CO.

Ensure to provide the printed copies of the Monthly return to be submitted by the COs in the next month.

Ensure to submit the hard copy of the return submitted by the COs to DC office.

Ensure to remain alert and advise DC/ADC/ZC/HO immediately in case of any fraud .

Attend meeting when called for at DC/ZC/HO level.

Assistant District Coordinator

Ensure to achieve the Mission, Vision, Goal and Objective of BISWA

To Ensure overall development of the geographical area under his/her control.

To maintain his office properly .

To ensure guide, motivate, train, empower and follow up the three Area Coordinators and Nine Community Organizersworking under him/her.

Responsibilities of ADC

Review and appraise the work done by the AC and CO.

Ensuring to prepare the micro plan of the geographical area through the Community Organizers and consolidate it.

Ensuring process documentation of the work done in the area under his/her control.

Ensure promotion of three federations , one each under each of the AC.

Ensure registration of the Federations , conducting the meetings and empowering the Federation Members .

Operational of the federations.

Conducting regular meeting of the federations at ADC office.

Collect the loan applications of the groups through the Area Coordinators.

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Ensure to process the loan applications properly by meticulous verification of the savings done by the groups, propermaintenance of the group records, past repayment record of the groups.

Preparation of the list of loan applications for presentation in the loan committee.

Attending the Loan Committee.

Disburse the loans sanctioned by the loan committee after ensuring proper loan documentation.

Ensuring on time loan collection by the AC. Ensuring on time loan collection in case of any default by the AC/Group.

Ensuring maintenance of DCB and providing printed MIS format to the Community Organizers through the AC.

Checking of the MIS submitted by the COs after due checking by the ACs.

District CoordinatorThe District Coordinator is responsible for the functioning of the District

He is responsible for the activities of the all the staff member of the District.

He is responsible for achievement of the Mission/Vision/Goal/Objective of BISWA.

He will represent BISWA in all the forums/meetings/committees at the District level.

He is responsible for building the image of the organization at the District Level. He should ensure registration of the organization at the DLCC and ensure attendance of all the DLCC meetings.

He should ensure to maintain excellent relationship with all the district/sub-division/block level officials.

He should ensure to maintain good relationship with the police authorities in the district level.

He should ensure to maintain good relationship with all the NGOs/VOs/CBOs/Donor Agencies operating in the district.

He should ensure to work out micro plan for the over all development of the district.

He should ensure to review the working of all the ADCs working under him.

He should visit all the ADC office at least once in a month and ensure smooth functioning.

He should arrange to hold the loan committee at his office once in a week or as per requirement based on the loanapplications of the district.

He should ensure 100% on time repayment of the loans and ensure 100% performing standard portfolio.

He should ensure to achieve the budget of the district. He should ensure implementation of all the social development projects/micro enterprise projects of the district

through the respective ADCs.

He should ensure to submit the monthly report from all the ADC offices submitted by the CO;s to the Head Office.

He should ensure to present the district properly at the Head Office.

He should motivate/guide/train all the staff of the district and ensure to be one of the best leader.

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He should ensure maintenance of all the book of accounts properly at the district office level.

He should ensure balancing of all the loan accounts monthly by cross checking it with the monthly returns submittedby the COs.

He should ensure to submit all the reports/returns/data to Head Office/Zonal Office as required.

He should ensure to maintain the bank account and advise ZO/HO on a day to day basis the balance outstanding in

different bank accounts.

REGISTERS MAINTAINED AS PER SINGLE WINDOW SERVICE.

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SL.NO. PARTICULARS ANNEXURE1 Visitors Register I2 Attendance Register II

3 Dead Stock Register III4 Loan Collection Register IV5 Sundry/Suspense Deposit Register V6 Outward Mail Register VI7 Inward Mail Register VII8 Petty Cash Register VIII9 Movement Register IX10 Leave Register X11 Review Meeting Register XI12 Program Register XII

13 Acquaintance Register XIII14 Charges Register XIV15 House Rent Register XV16 Stationary Register XVI17 Bank Account Register XVII18 Money Receipt Stock & Issue

RegisterXVIII

19 Telephone Register XIX20 Loan Application received &

Disposal RegisterXX

21 Letter Received/Sent File XXI22 Group Details Register/File XXII23 Base line Survey File XXIII24 All The Register Relating to

FederationsXXIV

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MIS-45 VISIT REGISTER Annexure-I

Format of Visitor Register

Sl.No Date of Visit Name of Officials Designation Officers/Dept. Purpose of Visit

Comments Signature

Rules

1. Staff & Visitors from outside coming to the ADC/District office must sign the visitor register.2. Staff who maintain or prepared the visitor register must signed visitor register.

ATTENDANCE REGISTER

Annexure-II

As per the printed format provided by Head Office.

Rules

1. Attendance register must be maintain by the Desk Officer.

2. Attendance register must contain the signature of Desk Officer who prepared it.

3. After 9:30 a.m no staff is allowed to sign the attendance register .

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4. At the close of the month attendance register must be checked by the concern authority.

5. If any staff is on leave must be disclosed in the attendance register.

MIS-50 ASSET REGISTER

Annexure-III

SL.No Date Of Purchase

Description ofAsset

H.OApprovalnotice No.

Amount(Rs) Name of SupplierwithAddress

Location ofUse

Sign ofManager(District)

Remarks

Rules1. All asset at concern office must be recorded in the concern office asset register.2. All asset must be serially number with earmarked BISWA.

3. If any asset is purchase then purchase price must be recorded in asset register and Xerox copy of bill must bepreserved for verification.

4. All asset at concern office must be properly maintain.5. Desk officer will maintain the asset register and put his signature at the end of the month.6. Desk officer will be liable for any shortage of asset.

LOAN COLLECTION REGISTER

Annexure-IV

Name of District- Name of ADC-

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Sl.no Nameof SHG

SHGCode

LoanCode

Name ofOrganiser

Name OfAC

Duedate

FieldCollection Date

MR.No CollectionDetails

Othercollections

LIC,LPC,TATAAIG,Health,Assets,Stationary

& Others.

TotalCollection

BankDepositdate

NameOf Bank

AmountDeposited

Pri Int

SUSPENSE ACCOUNT LOAN REGISTER

Annexure-V

SL.No Date Particular Date of Adjustment

L/F Debit Amount CreditAmount

BalanceAmount

OUTWARD MAIL REGISTER

Annexure-VIFormat of Outward Mail Register

Rules1. If any important mail is received then a copy of such mail must be maintained.2. All the outgoing Mail must be recorded chronological order.

INWARD MAIL REGISTER

Annexure-VII

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Sl.No.

Date ofMail

Letter No Person to Whom it Sent withAddress

Purpose Mode Of Mail Signature


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Format of Inward Mail Register

Rules1. If any important mail is received then a copy of such mail must be maintained.2. All the incoming mail must be recorded chronological order.

PETTY CASH REGISTER

Annexure-VIII

Sl.No. Date Particular Of Expenses Vr.No/M.R.No. Amount

Rules1. Petty Cash register will be Maintained by Desk Officer on daily Basis.2. Bills/Supporting vouchers with serial number must be kept in a file.

FIELD STAFF MOVEMENT REGISTER

Annexure-IX

Format of Movement/Monitoring Register

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Date ofMail

Letter No Person to Whom Addressed Purpose Mode Of Mail Signature


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Sl.No Date of Visit Name of Staff Designation Purpose of Visit Time of Departure

Signature ofStaff

Rules1. All field staff of concern office must mention the detail of their movement in the concern movement register.2. If the field staffs do not provide the information regarding their movement it means that the staffs are idle.3. Authorised person must check the movement register once in a week and put his initial.

MIS-46 LEAVE REGISTER

Annexure-X

Format of Leaves Register

Sl .No. Particulars Casual leave Earnedleave

Casual leave Earnedleave

Balance

Due Availed Casual leave Earnedleave

Rules1. Any staff who take any leave must give the leave application prior to the date of leave. Without the approval of

concern authority, no staff will be allowed to take any leave.2. Leave register must be maintain staff wise.

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MIS-33 REVIEW MEETING REGISTER

Annexure-XI

Date - Meeting No. -

Name of ADC - Location -

Various Points of Discussion -

1.

2.

3.

Signature of all Staff members present in the Review meeting.

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Note-DC and ADC will review their staff as per the Head Office Review format.

Rules regarding maintenance of Review Meeting Register

1. Review meeting Register must be maintained by the concern head authority.2. All the discussion made at review meeting must be recorded in the review meeting register.3. Immediately after the meeting, concern head authority must record the discussion in his own hand writing.4. Every staff who attends the review meeting must sign the review meeting register and after the end concern head

authority must put his initial.

MIS-52 PROJECT & PROGRAM REGISTER

Annexure-XII

NameofProject/Program

Area ofImplementation

NameofProject/ProgramIncharge

Date ofImplementation

Date ofCompletion

Date of reportingmonthly/Quaterly/halfyearly/Annualy.

Activitiesplan/BDPPlan

Activitiestaken/Achievement.

Implementation Status.

Rules

1. No payment made under project without proper approval of Project Officer.

2. Expenses under project must be verified first by Project Officer.

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3. At the time of payment voucher must be signed by the Dc and authorised project in charge.

ACQUIANTANCE REGISTER

Annexure-XIII


Rules regarding maintenance of Acquaintance Register

1. Voucher should be prepared with acquaintance register.Simulataneously the staff signed both voucher andacquaintance register.

2. Voucher and acquaintance register must be prepared by the Desk Officer should sign by the Dc and Do.3. At time of disbursement of salary the recipient signature must be ensured in the voucher and acquaintance register.4. The staff should take his own salary rather being taking other salary altogether.5. If excess salary received should be immediately deposited in the bank.

CHARGES REGISTER

Annexure-XIV


HOUSE RENT REGISTER Annexure-XV

Format of House Rent Register

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Date ofPayment

Name ofLandlord

Rent For theMonth

Amount Cheque No Cheque inFavour

Signature ofRecipient

Rules1. At the time of payment of house rent voucher must be prepared by the desk officer of concern office and approved by

the authorised person then payment is made to landlord.2. All the Xerox copy of cheque for house rent must be attached with the voucher.3. Landlord must sign the voucher and house rent at the time of payment.

STATIONARY ISSUE REGISTER

Annexure-XVI

Sl No Date of Issue To whomstationary Issued

Name ofstationary

Quantity Issued Signature ofReceipient

STATIONARY STOCK REGISTEROpening stocks of stationary Stationary Received From

HO/PurchasedStationary Issued Closing Balance of Stationary

Date Quantity Date Quantity Date Quantity Date Quantity

Rules

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1. Items wise stationary stock register is to be maintained.2. Without approval of DC/ADC no stationary item should be issued.3. Desk officer will maintain the stationary register and put his signature at the end of the month .4. Desk officer will be liable for any shortage of stationary items.5. No stationary items will be purchase from outside without approval.

BANK REGISTER Annexure-XVII

Sl.No.

Date ofDeposit

Particulars CounterfoilNo./Dr Vr.No.

Name of Bank Amount Remarks

Rules1. Desk officer is responsible to maintain the Bank Register on daily basis.2. In particular column details of deposit must be mentioned like collection deposit, excess salary deposit, etc.

MONEY RECEIPT STOCK AND ISSUED REGISTER

Annexure-XVIII

Format of Money Receipt Stock and Issued Register

Money Receipt Issue Register

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Sl.No Date of Issue

Name of theStaff to whomMR issued

Nos of MRBooksissued

SerialNumber ofMR BookIssued

Designation toWhom Issued

Signature ofRecipient

Signature ofAuthorisedPerson

Money Receipt Stock Register

Sl.No Date ofRec/Issue

Opening nosof MR Books,(Qty)

SerialNumberof MRBook

MR BookReceivedFrom HO/DC,(Qty)

SerialNumberof MRBookreceived

MR Bookissued,(Qty)

SerialNumberof MRBookIssued

Closingnos ofMRBooks,(Qty)

SerialNumberof MRBook

Rules

1. Unused Money Receipt Book must be kept in safe custody of Desk Officer as Money Receipt is equal to Money.2. One money receipt book is issued to one Ac only. After completion and submission of such given money receipt then

only another money receipt book will be issued.3. No money receipt book will be given without signature of recipient and approval of authorised person.

TELEPHONE REGISTER Annexure-XIX

Format of Telephone Register

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Date of Incoming/Outgoing Calls

Person WhoReceived Call

Person to Whom Callis Made

Incoming CallsPh No

OutgoingCalls Ph No

Purpose

Rules

1. No authorised person will allowed using the office telephone.2. Any call received or made must be recorded in the telephone register along with purpose.

FORMAT OF LOAN APPLICATION RECEIVED REGISTER

Annexure-XX

Sl.NO.

Date ofApplication

NameofSHG

GrNo

Type ofloan(General/ME)

LoanCycle

Amountapplied

Date ofLoancommittee

Date ofSanctioned

AmountSanctioned

Remarksdisbursed/rejected

LOAN DISBURSEMENT REGISTERSlNo

Name ofSHG

Nos Ofmember

Nos ofLoanee

Staff Present atthe time ofdisbursement

Date ofsanction

Amountsanctioned

Purposeof loan

Date ofdisbursement

Amountdisbursed

Rate ofinterest

Repayment Period

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LETTER RECEIVED/SENT FILE

Annexure-XXI

All letter received and send will be kept in two separate file for future references.

GROUP DETAILS REGISTER/ FILEAnnexure-XXII

GROUP DETAIL REGISTER

Name of SHG Name of Village

Code NumberName of GramPanchyat

Address Name of Co

Sex Name of Ac

Total Member Name of ADC office

Date of FormationName of DistrictOffice

Name of Federation Name of President

Name of Bank Name of Secretary

Account Number Status

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SlNo

Name of SHG Member Name ofHusband/ Father

Age APL/BPL

No s ofFamilyMembers

Child(M/F)

Signature of SHGMember

BASE LINE SURVEY FILE

Annexure-XXIII

ALL THE REGISTER RELATING TO FEDERATIONS

Annexure-XXIV

LOAN COLLECTION REGISTERMAINTAINED BY AC:

DATE:-

SLNO

DATEOFCOLLECTION

NAME OF SHGGROUP WITH CODENUMBER

NAME OF THECO

MR.NO.

PRINCIPAL INTEREST

OTHERSCOLLECTION

TOTALCOLLECTION

DETAIL OF BANK DEPOSIT

DATE OFDEPOSIT

NAME OFBANK & A/CNUMBER

AMOUNT

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Signature of ADC/DC/DO

1. Each and every day loan collection register must be closed by the desk officer.2. Proper verification of money receipt, bank deposit and utilisation sheet must be ensured by the desk officer before

posting to loan collection register.

LOAN DETAIL REGISTER MAINTAINED BY AC

NAME OF THE GROUP WITH CODE

LOAN CODE NUMBER

ADDRESS

Name of the President: Total Loan Amount:

Name of the Secretary :

Date of

Disbursement:Name of the CommunityOrganiser: Rate of interest :

Name of the AC: Term period of loan:

Name of ADC: Monthly demand:

Name of the bank: Purposes of loan:

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Account Number: Detail of Insurance

Name of the Federation:

Date of Formation:

DueDate

D

emand Date ofCollection

Collection Over Due

Cumulative Over

Due OutstandingPrincipal

Principal

Interest

Principal

Interest

Principal

Interest

Principal

Interest

Interest Will be calculated on daybasis.

Out of total collection first deduct the interest,then balance will be deducted from principalCalculation of interest per day = OutstandingPrincipal * Rate of Interest/100*1/365 daysCalculation of days for interest will be presentdate of collection minus last date of collection

AUDIT PROGRAMME AT A.D.C. LEVELName of A.D.C.:- Name of District :-

Name of Desk Officer :- Name of District Coordinator :-

Address of A.D.C. Office :- Name of Attendant :-

Number of Ac :- Number of Co :-

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Date of Audit :- Audit Period :-

Number of S.H.G.:- Number of Loanee S.H.G.:-

Number of Non Loanee S.H.G :- Total Loan Outstanding :-

Sl NoName of Register Yes No N/A

Comment

1 Attendance Register2 Movement Register3 Leave Register4 Visitor Register5 Review Meeting Register6 Asset Register7 Stationary Register8 Money Receipt Issued & Stock

Register

9 Telephone Register10 Inward & Outward Mail

Register11 Letter Despatch Register12 Letter Received Register13 Group Detail Register14 Staff Profile Register15 Day Book16 Cash Book17 Cheque Register18 Acquaintance Register19 Loan Ledger

20 Loan Collection Register21 General Ledger (2)22 Suspense Register23 Sundry Deposit Register24 House Rent Register25 Programme/Project Register26 Petty Cash Book

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27 Bank Account Register28 Charges Register29 Laxmipriya Register30 All Federation Register

BUILDING AND PREMISES Yes No N/A Comment1 Is the branch easy to locate ?2 Is the gate locked overnight with

adequate security personnel onsite?

FIXED ASSET Yes No N/A Comment1 Do the fixed assets correspond

with what is listed in thebranchs printed inventory?(Computer, Printer)

2 Apart from normal wear & tear,are the furniture, equipmentand machines well protectedand in good condition?

3 Are the branch motorbikes andkeys left at the branchovernight?

4 Do all the fixed assets have afixed asset number clearlywritten on them in indelible ink?

5 Are all computer, printer,keyboard covered to protectthem when not in use ?

6 Do branch vehicle carry only

employees and managementcommittee member ?

7 Are the vehicle cleanedregularly and in good condition ?

8 Are major defects to vehicles ormotorbikes repairedimmediately ?

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9 Are repair bills for vehicles andmotorbikes reasonable, takinginto account the age of themachine ?

STAFF DISCIPLINE,MORALE,RESIGNATION AND TRAINING1 List staff actually seen during this audit by title and number of individuals in that

role:

Title Number of PersonName of PersonAssistant District CoordinatorDesk OfficerArea Coordinator

Community Organiser

Total number of staff seen :-2 Does the total number of staff

actually seen agree with Head Officerecord for staff for the branch ?

Yes No N/A Comment

3 In your opinion, is the number ofstaff currently appropriate ?If not, which position should bereduced or augmented ?

4 Do you consider all staff to be welltrained in performing their jobfunction ?If no, which individual requireattention, and what type of training

do you recommended ?5 Is the branchs on-the-job training

adequate ?6 Are all staff utilized to their full

capacity ?7 Do the performance evaluations on

file accurately reflect individuals

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employees performance ?8 Do Ac report to village meeting on

time ?PAY ROLL1 Does the total monthly debit listed

on master pay roll voucher agree

with the monthly debited to the staffemolument account ?

SICK AND ANNUAL LEAVE RECORD1 Are all staff sick and annual leave

absence recorded ?2 Does the branch maintain a leave

roster ?3 Is the staff leave roster kept up-to-

date ?MEDICAL COVERAGE1 Are all staff medical claims

recorded ?

2 Are sufficient detail of an employeesfamilyspouses full name,numberof children,marriage and birthcertificates included with all medicalclaims register ?

3 Does CEO,COO at Head Office, aswell as the branch manager, sign allmedical claims reimbursement ?

OPERATIONAL WEAKNESS1 In your opinion, are there any

operational weakness at thisbranch ?

If so, what are they and how couldthey be addressed ?FRAUDS AND FORGERIES1 Have there been any fraud and

forgeries at the branch ?If so, were they reported to HeadOffices?

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OTHER OBSERVATION1 Who are the new competitors in the

area ?

CHECK ON MAJOR BALANCE SHEET HEADING

1 Number of Loans(Clients)

Loan Amount Variance

LastAudit

This Audit LastAudit

This Audit

Loans (Assets)Saving (Liabilities)Loan Collection

2 Budgeted Actual Achievement (%) Variance

Operating Revenue

Less : Operating CostOperating Surplus

3 Amount LastAudit

Amount This Audit Variance

Frauds And ForgeriesProvision for Bad & DoubtfulDebt

SOCIAL ACTIVITY UNDERTAKEN BY ASSISTANT DISTRICT COORDINATOR

1. Health Camp

2. Eye Camp3. Blood Donation Camp4. Other Activity

Signature of Asst. District Coordinator Signature of Internal Auditor

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PART - I SHG AUDIT SHEETName of Self HelfGroup : Date of Visit :

Group Number :SHG CodeNumber :

Sex : Name of Village :

Total Member :Name ofGrampanchayat :

Date of Formation :Name of A.D.C.Office :

Status:

Name of DistrictOffice :

Total LoaneeMember :

Name ofOrganiser :

Name ofFederation :

Name of AreaCoordinator :

Name of Bank :Name of S.H.G.President :

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Account Number :Name of S.H.G.Secretary :

Detail of GroupMember

Loan RepaymentDetail

Sl

No

Name of Self HelpGroup Member

Saving PerMember

LoanAmounts

LoanOutstanding

Date of

Collection

Principa

lAmount

Interest

Amount

O/s

Principal

MRNo

1

2

3

4

5

6

7

8

910111213

141516

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171819

20

Total Saving,Loan & LoanOutstanding

TotalCollection

Receipt & PaymentAccount

Receipt SideAmounts Payment Side

Amounts

OtherCollection

To Total Savings By Margin Money Deposit atBISWA

Particular

Amount

To Loan Received From BISWA By Federation Deposit atBISWA Life Ins

To Principal Received FromMembers By Loan Paid to Members

HealthIns

To Interest Received FromMembers By Principal Paid to BISWA

AssetIns

To Interest Received on InternalLoan By Interest Paid to BISWA

L.P.Charge

To Principal Received on InternalLoan By Internal Loan to Members

StampPap

To Margin Money Refund fromBISWA By Cash At Bank

Stationary

To Federation Dept. Refundfrom BISWA By Cash In Hand Total

To Others By Others Date

Total Receipt Total Payment Mr No

Federation DepositDetail Margin Money Detail

As Per District Office LoanLedger

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DateAmount

MRNo Date

Amount

MRNo

TotalCollection

TotalDifference

Principal

Interest

Principal

Interest

Z

PART -II

REGISTER MAINTAIN AT S.H.G. LEVEL1. MeetingRegister

2. Saving

Register

3. Loan Ledger

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4. Receipt and PaymentBook

5. Bank PassBook

6. Individual PassBook

PART - IIIMAJORFINDINGS

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Signature ofPresident

Signature ofOrganiser/A.c./A.d.c.

Signature ofSecretary

Signature of InternalAuditor

9. DELINQUENCY MANAGEMENT

What is Delinquency?

The situation is that occurs when loan payment are past due. A loan in arrear is a loan which payment is past due. It is alsoreferred to arrear or late payment, measure the percentage of a loan portfolio at risk. Delinquent payment in arrear is loanpayment which is past due. Delinquency occurs when loan payment is one day late.

Reasons behind delinquency1. Lack of proper monitoring at partners level2. Credit policies at partner level not properly defined3. Loan diversion4. Tenure of loan at institutional level5. Partners not getting loan at the time of requirement6. Repeat loan is not on time7. Capacity building support should be provided8. Need assessment at the grass root level is not proper9. Proper utilisation of loan10.Poor loan appraisal11.Lack of good governance

12.Multiple loan at SHG level13.Low absorbing capacity of the client14.Overlapping of MFIs15.People lost business external factors16.Migration17.Govt. Policies

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18.Skilled and experienced staff19.Consumption loan is more20.Dependency on one source21.Individual V/s Group lending22.Conceptual clarity on MF23.Poor MIS

24.HR Policies25.Poor investment opportunity at client level

KEYS ELEMENT OF DELINQUENCY PROMOTION

Understand the cause of problem before developing a solution.BN

1. Prevention is better than cure2. Programme image and philosophy

METHODOLOGY

1. Borrower selection2. Loan size terms3. Incentives

INFORMATION SYSTEM

1. Reliable, accurate, timely data2. Relevant detail for level of use(BOD,MGMT,STAFF)3. Relevant and timely dissemination4. Cost effective

10.RATIO ANALYSIS

1. Current Ratio-Probably the best known liquidity ratio is the current ratio, the quotient of current assets and currentliabilities. Current assets and current liabilities are commonly defined as falling due within a year from the balancesheet date.

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Current Ratio= Current Asset/Current Liabilities

2. Capacity Ratio-The cash position indicators compare vault cash and demand deposit at other banks including thecentral bank to the total asset of the institution.

Capacity Ratio= Net Loans/Total Assets

3. Total Deposit Ratio-Such a large scale of retail deposits would be evidenced by high total deposit ratio.

Total Deposit Ratio= Total Customer Deposit/Total Assets

4. Purchased Fund Ratio-The purchased fund ratio measures the amount of commercial short-term funding relation to thetotal balance sheet volume. It is defined as:

Purchased Fund Ratio= (Short term Borrowing + Purchased Fund)/Total Assets

5. Core Deposit Ratio-As the last of many more conceivable ratios on the liability side, we will introduce a refinement tothe total deposit ratio above. The core deposit ratio eliminates the volatile portion of the deposit mass and emphasize

the stable which the institution can rely on, regardless of seasonal swings

Core Deposit Ratio= Core Deposit/Total Assets

6. Loan to Deposit Ratio-Many bank and bank analyst monitor loan to deposit ratio as a general measure of liquidity:

Loan Deposit Ratio= Net Loans/Total Deposits

7. Net Non-Core Funding Dependency- One of more sophisticated liquidity ratios commonly tracked by financialinstitutions is the net non-core funding dependence.

Net Non-Core Funding Dependency= (Non Core Liabilities Short Term Investment)/Net Loans

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8. Reserve Ratio-Although there is no shortage of different liquidity indicator in the commercial banking literate,surprisingly there is rarely mention of a ratio that compares cash assets to customer deposits. For MFIs however, this isoften the key question: how much cash should not hold against saving deposits? Many MFI such as Rural Bank ofPanabo (RBP) in the Philppines explicitly track this kind of reserve ratio and define liquidity rules on this basis. RBP, forexample, mandates a 20 % cash reserves on all customer deposits. A basic reserve ratio could be defined as:

Reserve Ratio= Cash Assets/Customer Deposits

Internal Control System to Minimize Fraud and Forgery

Designing Internal Control System For Mfis

1. INTRODUCTION

Microfinance Institutions (MFIs) are informal financial service providers and are not under any regulatoryframework like the formal sector. On the demand side the MFIs offer collateral-free loans. Social collateral replacesmaterial collateral through an intangible micro-network of mutual accountabilities. Again, from the supply side,distinct characteristics of MFIs in Bangladesh are not- for profit organizations. Board members are notshareholders, they do not have financial stakes. MFIs through microcredit programs (MCPs) mobilize poor anddistressed target people and extend collateral- free small loans to them with the objective of creating self-employment for poverty alleviation. The most important asset in MFIs is the portfolio, and the liability is thesavings deposit taken from the poor MCP members. Savings mobilization takes place as a source of funding for theRevolving Loan Fund (RLF). A distinct characteristic of MFIs is its informal, decentralized process of servicedelivery technology. Although they have a Central Head Office, the MCP is operated at the grass root level throughBranches. For better administration Branches are organized under Regions and if necessary, Regions underDivisions. Though the average individual loan size in the MCP is small, the number of transactions is high. At thefield level, the amount of cash handling is also high, which creates opportunities for fraud. MFIs can partially

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compensate for structural shortcomings by practicing self regulation through effective internal control systemlinked to sound risk management strategies. It will keep the MFIs on the track to achieve a sustainable MFIcorporate culture.

2.0 SELF-REGULATION

The basic concept of self-regulation is the internal good governance on the basis of: shared values andprinciples, shared standards among MFIs, local network as local value guardian for ensuring standard.1 Self-regulation is expected to be ingrained within the MFIs integrated management system to ensure sound andorganized growth on a sustainable basis. And, the dormant attribute is internal control to minimize riskmanagement. Broadly, Governance and Accountability are essential elements for self- regulated integrated

management system. Specific requirements are:

a) A strong and capable board of directors that establishes sound program interventions, financial and riskmanagement policies and ensures management accountability for effectively implementing these policies.

b) Developing standard accounting system that is transparent and acceptable universallyc) An intensive and extensive internal audit function to confirm that the approved policies are followed and

procedures are effective.d) Development of effective mechanism for savers protectione) Efficient management and an effective Management Information System (MIS).f) Development of effective financial and operational performance standard.g) High quality external auditing by competent auditors experienced in microcredit as an objective check on

internal control systems to protect against fraud and mismanagement.h) Strategic monitoring of financial performance standards, program performance and compliance of the code

of norms/conducts by competent management.

1

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3.0 INTERNAL CONTROL

It is a set of integrated methods and procedures translated into regular and periodic activities that preservessafety of asset (e.g. loan portfolio, cash and other physical assets etc), improves client service, ensures reliabilityof financial information and staff adherence to management policies and guidelines. It ensures, (I) systems ofaccountability along with prevention of errors and irregularities, and (ii) systems of detecting errors andirregularities. Management must ensure that a proper internal control structure is instituted, reviewed, andupdated to keep it effective. It must satisfy three basic criteria:

They must be appropriate (that is, the right control in the right place and commensurate to the risk

They must function consistently as planned throughout the period (that is, be complied with carefully by allemployees involved and not bypassed when key personnel are away or the workload is heavy).

They must be cost effective (that is, the cost of implementing the control should not exceed the benefits

derived).

4.0 RISK MANAGEMENT FOR MFIs

Risk is intrinsic in MFIs mode of operation for providing financial services.To minimize the risk factorMFIs shouldlink internal control to risk management. Risk management is the process of assessment of relative risk andensuring that controls are present and effective. It covers prevention of potential problems and the early detectionof actual problems when they occur. Risk management of MFIs has different dimensions as follows:

1. Governance Risk2. Management Risk:

a) Operating Risk,b) Financial Risk:(i)Portfolio Risk,

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(ii) Liquidity Risk and(iii) Interest Risk

RiskManageme

nt

Governance Risk Management

Risk

Operating Risk FinancialRisk

PortfolioRisk

InterestRisk

LiquidityRisk

4.1 Governance Risk

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Governance is a process by which Board Members, through management, guide an MFI in fulfilling its corporatemission while protecting the MFIs assets. As board members do not have a material stake, in competent,commitment, sincerity with good reputation should be the basis for selection of board members. Well defined,clear procedures and documentation of board meetings are essential.

4.2 Management Risk

Management plays a key role behind the success or failure of MFIs through a set of activities (including planningand decision making, organizing, leading, and controlling) directed at an MFI's resources (human, financial,physical, and information) for a cost-effective, self-reliant and sustainable organization. Clear and transparentoperational guidelines and policies, such as: organograms, functions of different sections, staff responsibilities,accounts-keeping formats etc., can help to develop a good system of internal control to mitigate management riskof MFIs. The entire operational system deserves surveillance by management to see if it is working as prescribedand if changes are warranted. In its broadest sense, internal control to management risks refers to bothadministrative control and accounting control. Management risk can be broadly divided into two categories as

follows:

4.2.1Operating Risk

Operating risk refers to the risk of losses or unexpected expenses associated with fraud, inefficiency, errors andunforeseen contingencies. Steps for reduction of operating risks are:

Reliable Personnel with Clear Responsibilities: Individuals must be given authority, responsibility, and duties

commensurate with their abilities, interests, experience, and reliability. Appropriate recruitment and reward-

punishment systems are of utmost importance in these regards. Responsibility means tracking actions as far down

in the organization as is feasible, so that results can be related to individuals. It means having field-

workers/supervisors sign MIS report, accountants initial cash book/general ledger, and field-workers sign

savings/loan pass books and group attendance-registers etc.

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Communication : Regular co-ordination meetings to be held frequently at the central as well as at the field level

with a view to having a clear analysis of the problems that arise in the course of implementation of the programs.

Physical Safeguards: Access to resources and records is to be limited to authorized individuals who are

accountable for their custody or use. To ensure accountability, the resources are to be periodically compared with

the recorded amounts.

Losses of cash, inventories, and records are minimized by safes, locks, guards, and restricted access to assets. POsshould take special precaution for preserving cash in vaults. Documents should also be kept in lockers.

Rotation of Duties: To avoid risk key people handling cash or inventories should have job rotations.

Where most frauds and forgeries occur & its remedy:

1. Loan distributed by proxy-ADC must present at time of loan disbursement to avoid proxy.

2. Loan amount being shared between borrower and staff- Representative from Head Office mustpresent during disbursement of loan.

3. Loan amount collected from groups for personal use with the intent to pay them later- Oncecollection is not made during any month from any loanee group then ADC & AC are advised to visit the samegroup for collection.

4. New loan granted to hide arrears- Before Sitting of loan committee, DC must confirm the outstandingbalance, if there any in DC office & Head Office.

5. New loan taken to pay other loan- ADC are advised to make critical appraisal of loan application.

6. Create false group and misappropriate by employee- ADC are advised to maintain properly the groupdetail register.

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7. Thefts of SHG saving by staff- ADC, DC & Staff from Head Office are advised to make visit to allgroups.

8. Multiple loans to the Individual group members- ADC are advised to make critical analysis of loanapplication.

4.2.2Financial Risk

Asset and liability management refers to the financial risk management of an MFI. Generally, any action toincrease the expected returns of an MFI will also increase its risk structure. The major categories of asset andliability management risk that an MFI needs to consider are:

4.2.2.1 Portfolio Risk

The primary revenue-earning asset of a micro credit organization is its portfolio, and portfolio risk management

guards against potential losses resulting from the poor quality of the organizations loan portfolio assets. Thefollowing factors are directly related to maintaining the desired quality of loan portfolio.1. Program placement2. Sanity management3. Loan disbursement and recovery system4. Skill of field workers (including Branch managers)5. Regular Internal supervision (degree of supervision on both field workers and samiti member borrowers).6. Incentive base for management staff and employees.7. Sound Governance8. Capability of Chief Executive9. Accuracy of MIS report10.Offsite monitoring tools for analyzing MIS reports with particular focus on loan portfolio quality.

4.2.2.2 Interest Rate Risk

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Interest rate risk arises when interest rates on assets and interest rates on liabilities (which fund the assets) are

mismatched. Interest rate risk is primarily of concern to MFIs that mobilize deposits, and / or have relatively long

term loans (of greater than one year). In MFIs assets are frequently short-term (loans, term deposits, and so on),

while liabilities are frequently long term (concessional loans). This results in a funds gap. Gap positions will have

to be managed effectively to maintain (or achieve) financial sustainability.

4.3 Liquidity Risk

Liquidity management and cash flow management are often used interchangeably. In fact, liquidity managementincludes the management of not only cash but also other short term assets and short term liabilities, bill payments,and debt repayment. An MFI is in a liquid position if it is able to meet its current obligations as they become due, ifdemands for funds are readily met while balancing the need to earn revenue. This can be avoided through abudgetary practice.

5.0 TOOLS FOR EFFECTIVE INTERNAL CONTROL

Internal control is a process. It is a means to an end, not an end in itself. Internal control systems are fundamentalto the success and survival of MFIs. It is a moving target. It must be monitored and adapted to fit thecircumstances. Internal control is geared to the achievement of objectives in one or more separate but overlappingcategories. Microfinance management may be defined as an operational system of microfinance services thatstarts from organizing groups, mobilizing savings, selecting borrowers, disbursing microcredit, collectingrepayment, recycling loan, preventing defaulters and defalcation as well keeping systematic records and reportstowards the end of poverty alleviation .In designing effective internal control system for MFIs the following criterianeeds attention:

5.1 Segregation of Duties

Key duties and responsibilities in authorizing, processing, recording, and reviewing transactions and events should

be separated among individuals. Internal control is affected by people. It is not merely producing and distributing

policy manuals and forms, it is monitoring people at every level of the organization. The separation of tasks not

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only helps ensure accurate compilation of data, but also limits the chances for fraud that would require the

collusion of two or more persons. This extremely important and often neglected element can be subdivided into

four parts:

Separation of operational responsibility from record keeping responsibility. The entire accountingfunction should be separated from operating departments so that objective, independent records may be kepteither by other operating people or by clerks. For example, cash and other ledgers should be kept by accountant,not by the cashier or field workers. The accountant/store clerk, not store keeper, should keep inventory records.Separation of the custody of assets from accounting: This practice reduces temptation and fraud. Forexample, the bookkeeper should not handle cash, and the cashier should not have access to ledger accounts suchas the individual records of micro-credit clientele.

In a computerized system, a person with custody of assets should not have access to programming or any inputrecords. Similarly, an individual who handles programming or input records should not have access to temptingassets.

Separation of the authorization of transactions from the custody of related assets: To the extent

feasible, persons who authorize transactions should not have control over the related asset. For instance, the

same individual should not authorize the payment of a suppliers invoice and also sign the check in payment of the

bill. Nor should an individual who handles cash receipts have the authority to indicate which accounts receivable

(e.g. loan outstanding) should be written off as uncorrectable.

Separation of duties within the accounting function: An employee should not be able to record a transaction

from its origin to its ultimate posting in a ledger. Independent performance of various phases will help ensure

control over errors.

5.2 Authorization and Execution of Transactions and Events

Transactions and significant events are to be authorized and executed only by persons acting within the scope oftheir authority. All transactions will require approval and authorization by a responsible official. The limits of

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delegation of approving authority and financial power limits should be clearly defined and who approves whatshould also be defined specifically. Authorization can be either general or specific.

General authorization must be given in written form. It often sets definite limits on loan ceiling, savings

instruments, rate of service charge, daily/travel allowance, and so forth. There may also be complete prohibitions

(against taking extra fees or any facility from microcredit borrowers, etc).

Specific authorization usually means that a superior manager must permit (typically in writing) any particulardeviations from the limits set by general authorization. For example, the chief executive, rather than the branchmanager, may have to approve any distress loan (i.e. interest free loan given from disaster management fund).Another example is the need for approval from the board of directors/executive committee regarding expendituresfor capital assets in excess of limits specified in the budget.5.3 Documentation

The internal control structure and all transactions and significant events are to be clearly documented, and the

documentation is to be readily available for examination. Transactions and significant events are to be promptly

recorded and properly classified e.g. loan proposals along with group resolutions and savings-loan collection-sheetto journals and ledgers. Immediate, complete, and tamper-proof recording is the aim. To this end pre-numbered

source documents andregisters should be in practice to ensure recording.

5.4 Monitoring and Supervision

Competent supervision is to be provided to ensure that internal control objectives are achieved. To be effective,

controls should fulfill their intended purpose in actual application. A set of controls designed to operate in a manual

environment may not be effective in an automated environment. Therefore, the controls selected should provide

the coverage they are supposed to provide and operate when intended. As for efficiency, controls should be

designed to derive maximum benefit with minimum effort. Controls tested for effectiveness and efficiency should

be those in actual operations and should be evaluated over time to ensure that they are continually used.

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Operations staff / managers are to continually monitor their savings and loan operations through field visits and

take prompt, responsive action on all findings of irregular, uneconomical, inefficient, and ineffective operations. In

the supervision of MCPs aspects of considerations are:

Use of loan outside the proposed IGA/ unproductive activity

Hidden Overdue Violation of Traditional Micro Credit Culture False Vouching False Disbursement

Fictitious Cash in Hand Social motivation to recover the default loan Find out the causes of defalcation of loan SWOT analysis for default loan recovery Insufficient MIS, AIS and poor record keeping

5.5 Management Information System (MIS) and Accounting Information System (AIS)

The starting point in developing an MIS is to determine what information the MFI needs to perform well. Thatmeans defining the needs of different users of information. Good information provided in a useful form on a timelybasis empowers all the stakeholders in the institution- donors, investors, regulators, clients, other institutions,board members, executive management, the accounting department, the credit department, branch managers,field staff, and all other staff- to participate meaningfully in the institution. MIS is one of the most critical but leastunderstood elements of a successful MFI. The AIS is one of the two parts of an MFIs MIS. A good informationsystem can transform an organization. Aspects that need to be considered are:

Adequate MIS formats Correct and proper use of the MIS formats Hierarchy in Reporting System Ageing of delinquent loan Double Entry and Accrual Accounting System

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Create Debt Management Reserve (DMR)

Proper recording of default loan recovered

5.6 Internal audit

Internal auditing is an independent appraisal function established within MFIs which examines and evaluates its

activities as a service to the organization. Internal auditing is essential for ensuring the operation and

appropriateness of controls (therefore essential for good management), but frequently neglected for financial

reasons. It is unwise to be dogmatic about the detailed responsibilities of internal auditors, as these will vary a

great deal between MFIs and even through time for the same entities. Responsibilities might include:

Evaluating the effectiveness of internal controls Ensuring the reliability and integrity of financial management system of record keeping and reporting Ensuring safeguard of assets Promoting orderly, economical, efficient, and effective operations and quality products and servicesconsistent with the organization's mission; Ensuring adherence to laws, regulations, and management directives; and

5.7 The Management LetterExternal Auditing gives scope to evaluate internal controls system of MFIs which is reported through the

Management Letter. This is at times called theWeakness Letter. The objectives of this letter are :

To identify any weaknesses in the internal control.

To suggest adequate accounting control To suggest improvements in existing internal controls.

6.0 STEPS FOR DESIGNING INTERNAL CONTROL SYSTEM

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Once an MFIs management identifies its sources of risk, it can design measures for an effective system of internal

controls. There are five basic steps in the design of an internal control system.

Step 1: Define and describe the objective of the internal control system in the operative context of the MFI by

using the performance standards benchmark.

Step 2: Describe the system: list services offered, include a flow chart of operations, detail organizationalstructure and procedures, provide a chart of accounts, and specify staff positions and responsibilities. Particular

attention should be paid to the guidelines for inspection and internal auditing.

Step 3: Determine tasks that need crosschecks or verifications to prevent error or fraud, and separate them, for

example, collections, payments and recording of such transactions.

Step 4: Create an annual work plan to implement the internal control system delegating assignments among staff.

Step 5: Organize the internal control system so that each step is linked with some detailed control documents that

are cross-checked by an assigned person or team.

LOAN D