BRLP Project Strategy and Design
The core strategy of the BRLP programme is to build vibrant and bankable women's community institutions in the form of self help groups (SHGs), who through member savings, internal loaning and regular repayment become self sustaining organizations. The groups formed would be based on self savings and revolving fund and not on a single dose of community investment fund (CIF) funds for association given as a subsidy. The primary level SHGs would next be federated at the village, by forming village organizations (VOs), then at a cluster level, to become membership based, social service providers, business entities and valued clients of the formal banking system. Such community organizations would also partner a variety of organizations for provided back end services for different market institutions such as correspondents for banks and insurance companies, procurement franchises for private sector corporations and delivery mechanisms for a variety of government programmes. This is shown in figure given below:
The project design is based on the above strategy of building a multi-tiered, self sustaining, model of community based institutions who self manage their own development processes. The project strategy is therefore phased in a manner of first horizontally building up a very large number of primary level women based SHG groups with the rural poor, through a saturation policy in the six chosen districts. Because of the extreme poverty levels in Bihar, the project will first capitalize these SHGs, through investing part of the CIF, to supplement the self savings of these groups. The groups will also be linked to the commercial banks for low cost loans.
In the next phase, these primary level SHGs will be federated at the village level to form the second tier of the community organization the VOs. The VOs will receive investments from the project, for further on lending to the SHGs and members, through a second dose of the community investment fund to be used for assetisation, food security purchases, and retiring of high cost debts. A large part of this capital inflow is likely to be for meeting immediate consumption needs, particularly health and food purchase, given the extreme level of poverty in rural Bihar. This will ensure that assetisation and future cash inflows are not wasted on just repaying high cost debts to money lenders in the future.
In the third phase, the VOs will be federated to form higher level community organizations at the cluster and block levels. These apex community level federations will be responsible for enhancing livelihood activities in a comprehensive manner acting as microfinance institutions for lower level VOs, and economic institutions that take up specific income generating activates based on the assets created at the family level, such as animal husbandry, micro-agriculture etc. For the sustainability of lower level institutions as both sustainable economic and social entities such aggregation is essential.
To ensure that assetisation of the poor is put to productive use and does not just lead to them procuring an asset or cash that is captured by the elite thereby not leading to income streams increasing, a set of service providers will be positioned in the project, through partnerships, who provide forward linkages to markets for products and services on which the poor have a very high outflow today.
The above sequential and interlinked project design, phased over the project period, will create a social and economic ecosystem controlled by the poor and leading to their own sustainable development.