Dear Friends,                                                     Jan 13, 2006

                                                                  Portland, OR


Probably many of you are aware of a bold effort by SEEDS to provide a renewed but fresh and “system-wide” approach to micro-finance for the poor in Orissa. This project is lead by Mrs. Ranu Mahanti, a SEEDS member, and Mr. K.C. Mallick, head of a partner NGO called BHARAT INTEGRATED SOCIAL WELFARE AGENCY (BISWA). You will find the motivation and the description of this initiative at BISWA-SEEDS Microfinance project of SEEDS:

Micro finance helps reduce poverty through increase in income, allowing the poor to build assets and “capacity” of various kinds, and reduce their vulnerability. Microfinance clients are overwhelmingly female. Microfinance has been widely credited for empowering women by increasing their contribution to household income, the value of their assets, and control over decisions that affect their lives. Households that have access to microfinance spend more on education than non-client households. Microfinance contributes to improve nutrition, housing, education, and health of the participants.


After a year-long effort, we are ready to launch a bold, refreshing and potentially far-reaching capability – a people’s own micro finance bank in Orissa - to address socio-economic issues of poverty. However, we are not there yet, and we fervently need your help. Bell Weather Company of Netherlands, which works as a venture capital to assist in promoting MFB, has agreed to invest 49 lakhs (about 110,000 dollars) as equity capital. Also, they have agreed to give 1 crore as a loan for five years at 7.5 interest rate. As a rule a non profit organization (NGO), can't invest directly towards the equity capital for a non banking financial company.  Thus we are trying to raise (under leadership of our coordinator Mrs. Ranu Mahanti) the other 51 lakhs (about $114,000) to apply for the RBI license for establishing the BISWA micro-finance bank.


We have raised $87,700 of investment from several socially-conscious investors among you complemented by some donations collected through SEEDS. We need about $27,000 to complete our crucial goal.  We are looking for socially-conscious investment from you: BISWA and Mrs. Mahanti have promised a return of 5% for your loan for a period of 5 years. (If you want to invest beyond this minimum that and depending on a large amount you want to invest you may negotiate with BISWA for a mutually agreeable higher interest rate.) Imagine what impact your action could have.


Any new investment amounts, and the old pledges not sent in yet, should be sent urgently to Mrs. Mahanti’s home address (1210 Whittier Drive, East Lansing, MI 48823). Dr. Bhanu Mahanti (her husband) will mail the checks to BISWA. Mr. Mallick is planning to apply for the license by end of this month – for there are numerous downsides and opportunity costs to waiting too long.


In the following, based on and compiled from information I received from Mr. Mallick, you will see strong, well-thought out plans for the micro-finance strategy, the significant work that has already been accomplished, and the credibility of the approach.


Thus, on behalf of SEEDS, I strongly urge you all socially conscious individuals and groups of change to contribute to help realize the goal outlined above and elaborated below.


Priyadarsan (Darshan) Patra

SEEDS (please join seedsnet at 


p.s. This author has contributed upwards of $2000 in investment and donation to this project, and is willing to provide another challenge matching to motivate others to join in.




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Registered under: Societies Regn. Act XXI of 1860 Vide Regd. No. 20060/41of 2005-06.  FCR Act Regd. No. 105060053. Exempted under section 12 A & 80 G of Indian Income Tax Act.


BISWA believes in sustainable development of community through an interwoven strategy. Thus it has 3 components: Micro-Finance, Micro-Enterprise, and Social-Development. BISWA appreciates

past involvement and expects future NRI investment for positive socio-economic change in the following areas:

o    Support for Basic Needs like Drinking Water

o    Health Care through establishment of CBD Centers, regular health camps

o    Child labor eradication, mainstreaming to regular school education system through innovative schools

o    Establishment of water harvesting structures supporting micro-irrigation activities

o    Micro-finance and enterprise activities for the neediest (the topic discussed at length below)

o    Environmental protection thru plantation leading to income-generation supported by SEEDS

o    Eye-operation through eye camps


BISWA’s Vision Statement

To increase the availability of wider range of micro-finance services for poor (predominantly rural) women and their use of those services through the process of expansion as well as consolidation of this micro-finance program and creation / facilitation of a sustainable community based Micro-Finance Institution within the year 2006.


Mission Statement

o    Bring recognition, legitimacy, respect and opportunity to the 10,00,000 of micro-entrepreneurs in Orissa.

o    Create a level playing field for every micro-entrepreneur so that they qualify for the mainstream finance.

o    Revive the root of banking, so that credit is once again based on trust and peer pressure so poor can be served.

o    Make a real and lasting psychological, social & financial impact on individuals; help build strong, cohesive communities; and generate substantial job opportunities and economic benefit for society as a whole.



o    Bridge the gap between credit demand and supply.

o    Provide collateral free loan to the poor.

o    Influence economic, fiscal and social administration policies favoring the poor and the deprived.

o    Collaborate with people and institutions with similar objectives as that of BISWA.



o    Identification of members for SHGs

o    Credit to the SHGs for economic activities

o    Women focused

o    Promotion of Community Based Organization (under Trust Act as Mutual Benefit Trust taking SHGs as members)

o    Provide Collateral-free Loans

o    Encourage Savings for Capital Growth

o    Provision of Life and health Insurance

o    Flexible Repayment Period


BISWA micro-Finance Products:


o      Compulsory savings by SHGs for creation of their capital base.

o      Utilized for internal credit purpose/ margin money/ administrative expenses

o      It is not collected by BISWA.



o      3 Types: Production, Consumption & Trading.

o      Extended to qualified SHGs

o      Maximum Repayment Period is 2 years.

o      Door-Step Delivery

o      Hassle-free and Adequate Loan



q       Collaborated with ICICI-Lombard for health & Accident death of SHG members and their two nominees

q       Collaborated with L.I.C. of India under Janashree Bima Yojana covering life of SHG members


Lending Institutions leveraged in India:



o    SIDBI

o    Friends of Women World Banking India

o    ICICI Bank Ltd.

o    Rashtriya Mahila Kosh (RMK)                     

o    Regional Rural Banks (BAGB)


Micro-Finance Outreach as of 31st October-05

o    Operating in Orissa with 30 Districts       

o    8762 Self Help groups, 134986 Members

o    credit linked with BISWA for 5433 SHGs (74432 members)                                    

o    17 nos. of Federation (11 are registered as MBTs under Indian Trust Act.)

o    No. of FFIs linked : 13

o    No. of Staff in microfinance : 143


Micro-Finance Status as of 31st Oct. 2005

o    Savings Mobilized                           Rs. 3,79,13,223 /-

o    No of Loan                                    5,433

o    Loan Amount                                 Rs. 22,34,64,788/-

o    Average Loan Size                          Rs. 41,131/-

o    No. of loan outstanding                   3,995

o    Loan Outstanding                          Rs. 12,18,55,122  /-      

o    Operational Self Sufficiency              92%

o    Portfolio at Risk                              0.50%

o    Repayment Rate                             99.5%

o    Coverage of Client under

o    JBY of LIC                                     18278

o    Coverage of Client under

o    ICICI-Lombard Health                      6809

o    Insurance Claimed (JBY)                  16

o    Claims Settled (JBY)                        14


Important Financial Ratios:

o    Return on performing assets-            7%

o    Financial Cost ratio-                        1%

o    Gross financial margin-                    6%

o    Net financial margin                        5.9%

o    Operating cost ratio                        7%

o    Yield on portfolio                            6%

o    Operating grant ratio                       88%

o    Operational Self Sufficiency              92%

o    Cost per unit money lent                  0.06



Impact of BISWA micro-Finance Program:

At Client level


o    Changed in expenditure pattern.

o    Reduced Vulnerability.

o    Assets creation.

o    Enhanced women status.

o    Participation in social & political process.

o    Collective efforts for various social issues.

o    Changed from house-wife to Entrepreneur.



At BISWA Level


o   Able to institutionalized the microfinance program.

o   Strengthen the capacity of the staff as well as clients.

o   Increased its outreach as well as the quality of the program.

o   Able to build Coordination with other Institutions

o   Recognized Regionally, Nationally & Internationally.

o   Create a platform  to replicate the experience at other Districts

o   Relationship building with other FFIs for resource mobilization.


Ratings of the Organisation:

o    Rated by M-CRIL in 2003 as ß

o    Rated by CRISIL as mFR4 during September 2005

o    Rated 5-Diamonds by Mix market in September 2005

o    Rated by M-CRIL in October 2005 (the report is still awaited)


BISWA microFI Projections for next 5 years:













Amount of Disbursement

50 Cr.

100 Cr.

175 Cr.

275 Cr.

400 Cr.

Amount Outstanding

31 Cr.

40 Cr.

70 Cr.

121 Cr.

176 Cr.

Amount required from FFIs

33.5 Cr.

38.2 Cr.

70 Cr.

130 Cr.

162 Cr.

No. of SHGs






No. of Clients






No. of SHGs credit linked






No. of members credit linked






No. of Federation/ MBTs






Operational Self Sufficiency (O.S.S)







Action taken to achieve the Projections:

§      Promotion of Federations

§     Federations (Mutual Benefit Trusts or MBTs) are clusters of SHGs having legal entity under Indian Trust Act .

§     Federations are self sustainable client owned client managed organizations

§     Federation consists of SHGs ranging between  11 - 50.

§     Federations provide scope for financial and social intermediation for member SHGs.

§     Federations builds capacity of member SHGs.

§      Promotion of Non Banking Financial Company (NBFC)

§         The proposed entity is to be registered as NBFC under Reserve Bank of India in RBI Act.

§         The NBFC shall mobilize financial resources to fulfill the credit needs of the MBTs and BISWA.

§         There shall be no transfer of assets or liabilities from BISWA to the NBFC.

§         It will partly contribute to the social development initiative of BISWA.

§         Promotion of Micro Enterprise Development Institute (MEDI)

§         The proposed entity is to be registered as not for profit company under Companies Act

§         The MEDI shall act as a resource center for development of micro enterprises.

§         The MEDI shall Facilitate forward and backward linkages for micro-enterprises.

§         The MEDI shall promote export of SHG products


Ground work done so far in nutshell:

§         17 Federations are promoted out of which 11 are registered as MBTs.

§         Hired professional services for proposed NBFC and MEDI.

§         Approved by the Registrar of Companies.

§         Title accepted for NBFC as ‘BISWA micro Finance Foundation’

§         Title accepted for MEDI as ‘Laxmipriya’.

§         Approached Bellwether for equity support: 1.5 crores


Steps for resource mobilization:

§         Proposed to various banks and FFIs for revolving loan fund assistance (RLF)

§         Proposed to SIDBI for RLF and Capacity building assistance, Computer systems for branches.

§         Proposed to SIDBI for transformation loan assistance.

§         Proposed to CARE for support for accelerating existing mF program


Summary History of BISWA Microfinance:

§         In 1996 BISWA started its microfinance activities.

§         Initially the activity was only concentrated in Sambalpur District

§         The external credit facilities to the SHGs were either by directly linking the SHGs to the Banks or BISWA availing small loans to extend the credit.

§         NABARD was first apprised of the SHG promotion of BISWA and extended promotional grant support.

§         In June-2002 CARE-India (Orissa) came up with the CASHE Project and partnered with BISWA for Sambalpur District.