MFI Experiences

Society for Helping and Awakening the Poor Through Education (SHARE)

"SHEKINAH" 12-13-680
Nagarjuna Nagar Tarnaka
Hyderabad, AP 500 017
India
Email: share@hd1.vsnl.net.in

Number of Active Clients: 53,000 (100% women)
Average Loan Size: US$96
Average First Loan Size: US$86

Targeting Tool Used

Housing index and means test.

Why target?

The poor are specifically targeted because they have no alternative sources of credit that are priced reasonably. They have a lot of untapped skills that when combined with sources of credit can enable them to move in the direction of greater economic freedom.

The Targeting Process

Villages with a high concentration of low caste people, especially "untouchables," also tend to be the region’s poorest villages. In fact, in most of these villages habitation is organized along caste lines. These are the villages SHARE operates in. Following a public orientation meeting in the chosen villages, women from poor households are identified based on their demand for services, and their eligibility for the program. Their eligibility is tested by field staff using a standard household questionnaire, a combination of the housing index and a means test.

The housing index gives the staff a preliminary indication of how poor a household is and the means test gives more elaborate information. The housing index of SHARE brings into account quite extensive housing characteristics and computes scores based on:

1. Size (Big: 4, Medium: 2, Small 0)

2. Structure (Firm: 4, Medium: 2, Bad: 0)

3. Roof material (RCC: 4, Tiles: 3, Asbestos: 2, Zinc:1, Bamboo: 0, Thatched: 0, Wood+Stone+Mud: 1)

4. Wall material (Brick: 4, Stone: 1, Zinc: 1, Mud: 0.5, Bamboo: 0)

5. Electric supply (Yes: 2, Shared: 1, No: 0)

6. Water supply (Own well: 1, Community well: 0)

7. House Ownership: (Own: 3, Inherited: 2, Rented: 1, Shared: 0)

8. Toilet (Pit: 2, Flush: 1, Open area: 0)

9. Cooking (Gas: 3, Oil: 2, Charcoal: 1, Wood: 0, Smokeless Chulhas: 0)

10. Radio/Tape Recorder (New: 2, Old: 1, None: 0)

11. Vehicle (New moped: 4, Old Moped: 2, New bicycle: 1, Old bicycle: 0.5, None: 0)

12. Government Ration Card (Yes: 3, Yellow: 2, White: 1, No: 0)

13. Fan (Yes: 1, No: 0).

Individuals with scores above 20 are considered ineligible for SHARE loans, while those with scores below 20 are interviewed further to assess their eligibility. The branch manager verifies the field staff’s findings by conducting random visits to households.

In addition to the housing index SHARE conducts a means test to compute the incomes and value of assets of potential clients. Information is collected on i) other members in the family, ii) size of land owned or operated and the income from it, iii) value of livestock, iv) income from other sources such as daily labor in agriculture fields, other types of manual labor, petty trading, v) value of household assets (the housing index and other household belongings), vi) loans outstanding, and so on. If the net per capita income of a family is lower than Rs 300 it is eligible for a SHARE loan.

Experience With Targeting

The housing index and the means test are simple to implement and take very little time, say 20 minutes per client. The data is fairly reliable and it forms the basis to track household progress over time. SHARE faces some opposition from the relatively wealthier population in the areas it operates in. In addition, it is often hard for poorer clients to take full advantage of their loans as they do not possess high skills. They are also busy with wage earning activities and may not have enough time left for group meetings. Targeting does increase staff costs as data collection is labor intensive and recording it into computers and its analysis also takes time.

A recent study employing CGAP’s Poverty Assessment Tool concluded that SHARE has a strong poverty outreach. Not only does it operate in a very poor area, within that area it reaches the poorer population, making its targeting practices highly successful.

Source: How Micro-Finance Providers Target the Poor: A Compendium of Strategies; CGAP’s Poverty Assessment Tool: Synthesis Report for the Case Study of SHARE, India