::: Arman Financial Services Limited ::: What We Do - Microfinance - Methodology_________________________________________________________________________________________________


	Microfinance


	-	Methodology

	-	Schemes

	-	Success Stories


	Loans


Core Microfinance Delivery Model
Arman currently follows individual and JLG based Microfinance. The group size is be between 10-30 members. The group members will have to share the responsibility of repayment. The organization has in place a separate trained team for this programme with an experienced leader.

Operational Unit

Arman has set up branches for disbursement, collection and monitoring of microfinance loans. Decision making, accounting and MIS is be decentralized for achieving faster expansion. Branch Manager will be responsible for achieving growth as well as portfolio quality targets.

Microfinance Procedures

Borrowers are selected from lower income group (earning less than $2 per day). In the rural and urban slum areas borrowers should be only women. There may be male clients in the urban areas and particularly among target groups with micro-entrepreneurs and small trading activities. However, male clients would not be more than 5% of total number clients. Detailed procedure as follows:


	Client Identification
	Field Officers (FO) based in respective branch offices will be responsible for locating potential clients in market areas. The clients should already be involved in an income generating activity.

	Group formation
	Homogenous clients would be identified in an area with similar loan requirements. FOs would organize them into groups of 8-12 members and would ask them to form groups. Each group should have a Group leader elected by the Group members. FOs would inform the group about Arman’s loan policies, processes and group’s collective responsibilities.

	Loan Application
	Once the group has been formed loan application from each client along with address proof would be mobilized. If formation of group is not possible or particular client has higher loan demand then client is considered for Individual loan. The Loan Application in the Arman’s format has to be submitted by the clients to the Branch manager at the office. After receiving the applications manager would conduct Field Investigation.

	Disbursement
	Disbursements would be made at the Branch Office. Head Office would send the funds as per the disbursement plans of the branches and the Branch Manager would make the disbursements though cash as is decided for the individual branch. The clients have to bring the processing fee and documentation charges with her. These are not deducted from the loan amount.

	Collection
	Repayments are weekly and are either made at the office or deposited by the groups in the bank account of the company. While making the collection the client is given the receipt and the collected amount has to be deposited with the Accountant in the branch office.

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