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Sehyogini’s microcredit model offers unique lending solutions that have resulted in nearly 100% loan repayment rates along with the below benefits:
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Offers buffalo leasing programs that allow for self employment and asset building opportunities |
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Incents girl child school attendance rates by offering discounted loan interest rates to recipients that pledge to send their girl child to school and meet an 80% attendance rate requirement |
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Invests all revenue back into the villages through a milk distribution program and other initiatives |
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Sehyogini purchases a buffalo at full cost (RS 30,000) and then leases it to eligible rural women at a nominal interest rate (either 4% or 6% APR). Recipients must pledge to have their girl child attend school and meet a school attendance record of 80%.
The recipients pay back the loan from the sale of buffalo of buffalo milk and dung. The loan installments are collected on a monthly basis; the entire loan amount of principal and interest must be returned over the course of 2 years at which point the ownership of the buffalo transfers from Sehyogini to the recipient.
All of Sehyogini’s revenues are reinvested into the community through milk distribution programs to village schools or other initiatives. |
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Success Factors of Sehyogini’s Microcredit Model
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Sehyogini’s buffalo leasing program is successful as it addresses critical limitations of traditional microcredit models. The model’s critical success factors include:
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Ensure loan used for income generating purposes
Generally, microcredit concepts have high default rates due to recipient using the money for non income generating purposes. Sehyogini eliminates this risk by purchasing an income generating asset, the buffalo, and then leases the buffalo to the microcredit recipient. |
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Charge nominal interest rates
Most MFI’s charge exploitive interest rates of 24%-100%. Excessively high interest rates make loan repayment very difficult and can lead to financial devastation for the recipients. Sehyogini charges very nominal interest rates (4% or 6%) allowing the recipients increased savings and investment rates. |
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Reinvest all revenue into village and become a trusted catalyst for change
Since 100% of the revenues are reinvested into the community, villagers perceive Sehyogini as a true supporter for poverty alleviation. Trust based partnerships result in cooperation and contribute to nearly 100% loan repayment rates. |
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Loan Eligibility Requirements
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| Gender Requirement |
# of Girl Children |
Loan Amount |
Interest Rate |
Notes |
| Female |
1 |
RS 30,000 |
6% |
Girl child must have 80% school attendance |
| Female |
2+ |
RS 30,000 |
4% |
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