Credit & Enterprise Development

Appropriate to their needs, associated with training in certain specific areas, the facility of credit could bring about radical changes in the lives of the poor. Keeping in view the same assumption, RCDS, since its very inception, engaged itself in different sort of activities, including micro credit, aimed at rising income generation capacity of the poor on sustainable basis. Later, the impact assessment studies revealed that such category of activities could do a lot in combating poverty at grass root level, and that there is a great potential of micro-credit existing in both the rural and urban areas of the country.

There are many microfinance products that RCDS is offering to its clients on basis of their capacity and needs. Financial and technical assistance provided by Pakistan Poverty Alleviation Fund (PPAF) is invaluable. RCDS facilitated the community in the process of capital formation and income generation at the household level through group formation by extending credit, encouraging savings, internal lending system (with in a group using their own savings) and sustainable use of their existing resources. By 2010 closing, RCDS had crossed 1 billion bench marks on our all lending.

Goal

• Strengthening economic base of low-income groups of target communities through their increased access to cost effective financial services
• Capacity building of small entrepreneurs to grow and expand volume of their businesses through provision of an integrated package of business development services including credit and marketing linkages
• Following a consistent and efficient growth to become a financially sustainable program

Micro Finance Program (MFP)

At the outset, RCDS realized that for the success of program, it should be participatory and people-centered. A two-pronged strategy of social mobilization and capacity building reflecting philosophy of RCDS was developed. This entailed organizing of targeted area issues and common concerns. Local peoples were encouraged to be part of problem-solving mechanism and make their own decisions and come up with solutions

The results were soon visible. After cluster and groups formation, best utilization of local resources and savings trend increased in the community. Due to their keen interest, this resulted in an emergence of a sense of ownership in the targeted community. While this methodology was sound, it demanded a process to harness community mobilization involved identifying needs in credit income generation and asset formation. There was need for provision of technical support and essential funds to develop and implement solutions that could ultimately be sustained through minimal external inputs.

Once the community was mobilized to take action, the next step was to invest in the human resources by building their capacity. This entitled training and skills development of the local communities like leader management skills, financial skills. So, they became able to manage their savings effectively. During the reporting period, RCDS focused on females in Credit and enterprises development.

Enterprise Development Facility (EDF)

RCDS offers Enterprises Development Facility (EDF) of loan to those potential clients of the CED who have completed two loans cycles in the CED. These loans are granted to male and female entrepreneurs. Such loans enable the small entrepreneurs to expand their volume of business. The ultimate goal of the program is employment generation and success stories reflect the aim of the EDF program also. Over one million populations endure some of the harshest living conditions in the remote areas of Pakistan. These peoples are isolated due to the terrain and lack of even the most basic of infrastructure – scarcity of sweet water, fewer health centers, lack of education, lack of income generating opportunities and lack of resources for business, makes them the most impoverished, disadvantaged and neglected areas of Pakistan.

The locals are still grappling with the changed situation. The present vision of RCDS is predicated on the understanding that this region's society is in the throes of irreversible economic and social changes. The organization vision is to make the neglected community, Enterprise Development Facility to empower “Economically, socially and politically. It is possible through strategy of participatory and with the dissemination of social package during the community meetings.

Through these methodologies, RCDS facilitate the communities, and now they are able to manage and contribute towards its own sustainable development. Enterprise Development Facility (EDF) is providing the opportunities to the local community at macro level. RCDS has a strong mechanism for smooth running of EDF. As a more sustainable and long term endeavor, RCDS is also managing the EDF and income resource generating programs with the aim of creating local financial institutions at village level. In this way, the credit holders can earn sufficient amount from their business.

Microfinance Innovative Outreach Program (MIOP)

In RCDS working areas livestock holding size in these areas is generally small and the farmers in these areas produce limited kinds of agricultural and livestock productions (including rice, wheat, milk and related products etc) they market their agricultural and livestock produce in local market. So, agricultural production can’t meet the daily wages of a farmer but livestock products are easily meet the daily wages of a farmer.

The farmers are usually unaware of the demand of the markets, they sometimes end up selling their produce in the market at throw-away prices as they do not have any facilities to process them and/or to preserve them in cold storages until they may get better price. This also leaves open a vast opportunity to process and prepare livestock-based industrial and food products. Secondly it deprives consumers of continued and long term supply of these produce at affordable prices. RCDS is working since two years to build the capacity of farmers and add value to their produce in the form of FEG. There was a dire need of services for the livestock sector. For this, RCDS took an initiative and started Microfinance Innovative and Outreach Program (MIOP). Through this program, RCDS is trying to streamline the sector by not only providing finances but also capacity building and technical support in developing business plans. RCDS also helps Community Organizations in marketing the milk to better markets directly without intervention of the middle man. This enhances the economic condition of milk producers as the middle man is skipped from the circle. The milk producers are gaining more due to elimination of the middle man. The objective of this program is to enhance deepen and sustainable access of rural poor community to a range of financial products and services. The promotion of financial innovations designed to assist in development agri/rural economies.

Strengthening Micro Enterprise (SME)

Strengthening Micro Enterprise is another product from RCDS that encourages enterprise development and also focuses on increased job opportunities for the jobless. RCDS has set job creation as an essential prerequisite for a client to qualify for SME loans. It is a larger window that provides better finances for slightly bigger enterprises where at least three workers are accommodated. Under this program, loaning up to 0.3 million is offered to persons having small enterprises.

Strengthening Micro Enterprise (SME) it caters not only manufacturing concerns but also supports trading and other profitable and legal businesses that prevail in the target area with a compulsion that these should be accommodating at least three to four workers. In this way, RCDS is not only helping the small entrepreneurs but is also impregnating the economy by prompting job creation for the jobless.

Social Safety Net(SNN)

Social Safety Net is a window that is specifically for the destitute, the people who do not fall in the category that can be catered by any microfinance product as they do not have the capacity to payback. There are several provisions in RCDS that support the Ultra-poor category.

I. Widows Strengthening Program

Widows are the most neglected part of the society. RCDS as community organization always focused on the neglected segment of the society. Keeping in view, RCDS wants to start the widows strengthening program in the targeted areas, where these widows can get loan facility in kind and earn easily.
A baseline survey was conducted in one union council of district Sheikhupura. Through the baseline study, it was observed that the widows are facing many problems; they have not sufficient resources to fulfill their necessities of life.
Social Safety Net Widows strengthening program has the following objectives;

• Provide the skills of stitching and sewing to the widows through the establishment of vocational centers.
• Provide the loan facility to the widows, for establishing their business and make better mechanism for marketing their products effectively

II. Skill Center

RCDS has one skill center for the poor and orphan girls of the community. Here the young girls are trained in the skills they are interested in. In this way, RCDS is building their capacity to earn for themselves and their families through these skills. Girls passing out from these skill centers are not left on their own even after passing out. Those who want to develop their own business are also provided support in establishing themselves like beauty parlor, tailoring shop, boutiques etc.