Plan of Action - First Draft

SM: After the meeting at the Area Centre, I understand that saving and transacting is a critical requirement of the community and therefore it may not be appropriate to take the 'NBFC to bank' route. As per my understanding, we need to give the savings program a bit of a structure and continue running it informally, but at a larger scale and more focus. That is also a bit urgent. As the first step, let us understand and document the process of collections and withdrawals. This will also need us to look at the program offering, the delivery mechanism and organization structure.

Stan: As mentionedin my earlier email, some documentation has been done which we can revisit . And see what more needs to be done. I am not sure what we mean by "informally". The need has been expressed to have something more formal. whether this means legal or just more structured I am not sure. My own feeling isthat the sooner we move to have a legal structure the better. After your visit I think we can separate making the current savings programme more structured and systematic from giving it a legal identity. Both are different processes and can be done simultaneously I suppose. 

SM: I’m throwing random questions under these heading, which will have simple answers, ideally should be understood from people running the show. There will be many more details than what these questions cover. We begin with these. Since I’m starting without any understanding, some questions may seem too elementary. 

In a bank, there is something called a ‘Branch Manual’, which is the bible for people running the branch. We should also try to prepare a manual for the front end person / team and a similar manual for the next level aggregation. Once we get a sense on these questions, I can plan another visit, where we can prepare a first cut manual and flag off the pilot.  

Stan:  Yes a Branch manual is a must. This was something the HSBC people also suggested. I dont know if there is a need but we have built a lot of goodwill within the HSBC team - many of whom are still in touch with me. We may want to tap into them if needed as a resource. 

SM:

Program Offering

Is there a defined minimum saving amount, frequency of savings, min withdrawal amount, is withdrawal available any time or is there a defined frequency or days, is there a defined place for collection and withdrawal, is there awareness about interest on savings, can we continue with the interest-free savings program since it is a community programme, is there a need for a fixed deposit offering

Stan: Post the HSBC porgramme the plan was to have a monthly saving of Rs.250 of which Rs. 50 would go towards share holding (equity) Rs. 100 into a term deposit and Rs100 into a savings account. This can should be revisited in the light of the ideas that have now come up. But nevertheless a Rs. 250/month seems to be a good starting point. Erumadu area team has demonstrated that there is an appetite for this level of saving. We may want to increase it later. But this can all be worked in discussion with the entire team and community leaders. 

SM:

Organisation Structure

Do people have fixed responsibility, are there back-ups or maker-checker, are they paid or voluntary, is there a defined hierarchy, is it required, what is the role of Accord

Stan: Once we are clear on how we are taking it forward we can evolve the most appropriate organisation structure. The role of ACCORD has always been and continues to be that of a catalyst. More practically the area teams role will be focussed on creating awareness and to mobilise the community by arriving at consensus. 

SM:

Collections Process

Place of collection, person responsible, how is it communicated to the community, minimum and maximum cash retention limit for the savings co-ordinator, place for the co-ordinator to deposit cash, acknowledgement, reporting of cash collected, recording of cash deposit in respective account, process for soiled notes / outdated notes, safety norms for transportation of cash over longer distances, policy in case of shortages / excesses

Stan:  As above I think we can discuss this and evolve it based on the analysis of hte current system and what the team feels the community is ready for.  

SM:

Withdrawals Process

Who can withdraw, identification process, withdrawal sanction for various amounts, direct payment to vendors facility, place of withdrawal, timing, pre-defined schedule, contingency withdrawal requirement.

Stan: As above.