JEEViKA is a large community driven development project in Bihar, India. This project is managed by the Bihar Rural Livelihoods Promotion Society (BRLPS) an autonomous body of the Government of Bihar and funded by the World Bank Group. In 2007, JEEViKA began operations in 6 blocks (sub county levels) of 6 districts (county level) by mobilizing impoverished rural women into a hierarchical system of community based organizations. Today, JEEViKA is operating across all 38 districts in Bihar. Recently, JEEViKA deployed an integrated Decision Support System (DSS) to inform the project’s stakeholders about progress and problems. Key business processes of the project are recorded on paper; some of those paper records are digitized in the DSS. The DSS is designed with a feedback loop that can translate the data into easy, usable information for stakeholders (particularly staff and community members who are in charge of ensuring quality of service on the ground). The loop is also iterative; as the information requirements of the field increases, the loop can send in richer details across the hierarchy of project & community level management.
To understand how the DSS works, we first need to understand the institutional structure of JEEViKA, including the community level institutions. We also need to go into some details about any key intervention of JEEViKA, to get an idea about what kind of information is needed at every level to ensure proper delivery of benefits. We would thus look at ICF, which is the initial credit line (from JEEViKA) for beneficiaries to smoothen consumption OR reduce costly debt OR invest in productive activities OR any combination of the previous three categories. In the next two sections, we consider the institutional structure of JEEViKA, and look at how the ICF is deployed across the project’s institutions. However, the knowledgable (or impatient) reader can skip ahead to the animation immediately preceding the 3rd section, Managing ICF, to get a flavor of the first 2 sections.
The SPMU, or the State Project Management Unit of JEEViKA is the headquarters of the organization. It operates out of Patna, the capital of Bihar and is led by the CEO of JEEViKA, who is in charge of the overall direction that the project takes. The CEO is assisted by State Project Managers (SPM), who are in charge of designing policies and guidlelines for project implementation. An SPM is supported by one or several Project Managers (PM), who are responsible for taking the interventions to the districts, training relevant personnel and deploy the policies.
For every district, the DPCU, or the District Project Coordination Unit is the nerve center of the project’s operations. Each of the 38 DPCU are led by a District Project Manager (DPM), who is supported by several thematic managers who bring deep technical and implementation knowldege about specific interventions to the table. Each DPM is also responsible in managing the block teams in his district.
The final project unit resides at the block level, and this is responsible for delivering services at the ground. Such Block Project Implementation Units (BPIU) are led by the Block Project Manager (BPM), who is in turn supported by Area Coordinators (AC) and Community Coordinators (CC). These 534 BPIUs are in charge of spearheading JEEViKA and its entire package of interventions when the project expands into new areas.
JEEViKA’s first intervention is the establishment of Community Based Organizations (CBO). The lowest level of CBO is formed first, which gradually get federated into progressively higher levels of community institutions. After a village is identified to be brought under JEEViKA’s ambit, BPIU staff, identify and encourage women from such villages to join Self Help Groups (SHG). An SHG is a small platform for around 10 to 15 women to come together, save a small amount on a regular basis, and build a corpus out of which they can interloan and repay small credit lines. The SHG also provides its members with a plce to discuss their day to day lives, with respect to their families and the larger community. An SHG’s weekly meeting is facilitated by a Communty Mobilizer (CM), who is also in charge of maintaing a record of the financial transactions and non financial discussions of the SHG. 3 members of the SHG serve as its Board of Directors (SHG-BoD).
Once about 10 to 15 SHGs are formed in a village, they are federated into a Village Organization (VO). The taks that a VO has is too numerous to discuss here. However, all the major funds to provide credit for health and food emergencies are stationed at the VO. Additionally, funds to capitalize SHGs are also routed through the VO. The VO can also acta as an agent of social change in the village. Finally, a VO’s primary mandate is to ensure the financial health & sustainability of its constiuent SHGs. Its monthly meetings are facilitated by a Book Keeper (BK), who is also in charge of preserving the records of all financial and non financial proceedings. The VO is led by the VO Board of Directors (VO-BoD), who are supported by different VO Sub-Committees. Finally, the VO is the last level of CBOs that are supported directly by JEEViKA; CCs (BPIU staff) are mandated to assist the VO in its functioning, by acting as a consultant to various management issues.
Once a cluster of VOs have formed in a geographically contiguous region, they are federated into the project’s highest level of community institution, the Cluster Level Federation (CLF). The CLF is a repository for the major funds that could be used by beneficiaries to leverage credit for productive purposes. The CLF also has a mandate to oversee the smooth functioning of all the federated VOs and SHGs under it, among a variety of other responsibilities. A CLF is supported by the Master Book Keeper (MBK), who facilitates its monthly meetings and keeps a record of all transactions and discussions. It is led by the CLF Board of Directors (CLF-BOD), which are in turn supported by various CLF Sub-Committees. The AC (BPIU staff) plays the role of a mangement consultant to the CLF.
Once 3 to 4 CLFs are established in a block, the BPIU gets into a support role for the different CLFs; formation of new SHG/VO, their funding, monitoring and trouble shooting are agendas progressively taken up by the respective CLFs. Thus, it may take about 3 to 4 years (for a BPIU) from opening up the first SHG in a village to bringing all the SHGs in the village under a CLF’s ambit, so that the BPIU can settle into a supporting role.
We now consider one of the most universal interventions of JEEViKA to understand how the feedback loop plays a role in managing the implementation of that intervention.
The Initial Capitalization Fund (ICF) is a one-time grant to the SHG from JEEViKA; the exact amount has varied over the years, but on an average, SHGs have received the sum of about 800 USD on average. Prior to an SHG receiving its ICF, it has to prioritize the needs of its consitutent mebers in accessing the fund. Once the prioritization is finalized, the SHG disburses amounts out of the ICF as a loan with monthly interest payment of 2% on the principal outstanding.
As long as the SHG is not federated to a VO, the principal is deposted with the SHG and the interest accrues to its corpus. However, when the SHG is a part of a mature VO, all new disbursements of ICFs are done by the VO only, which lends the required amount to an SHG subject to prioritization of member requirements. ICFs that were disbursed directly to SHGs are transferred to the VO, along with a complete transfer of the loan portfolio. The SHGs keep 50% of the interest payments made by the members, while the remaining interest accrues to the VO’s corpus. Usually by this time, a substantial portion of the original amounts disbursed as ICFs are repaid by members. Upon requests for credit from SHGs (sourced from members), the VO can disburse new credit as General Loans (GL) at a monthly interest rate of 2% on the principal outstanding. Thus, every dollar that the project invests as ICF can be reinvested by the VO as GL; over time, the GL constitutes the primary avenue to inject credit into the rural households, and generate income for the community based organizations.
Once the VOs are federated into a mature CLF, the ICF portfolio is transferred upwards again to the CLF. The VO keeps 50% of the interest accruals from ICR repayments and transfers the remaining 50% to the CLF. Today, for every dollar repaid by a member as interest, 50 cents stay with her SHG, while her VO and CLF receive 25 cents each.
The ICF is the first monetary assistance by JEEViKA itself, and arguably its most universal intervention. Rotating the funds, first as ICF and then as GL serves to continuously replenish the credit needs of beneficiaries for a variety of purposes, while increasing the income and sustainability of institutions at every level. Thus, it is of utmost importance for management at every level (including that of community institutions) to ensure the rotation of funds.
Lets consider the challenge now. An average block will have 3 CLFs; each CLF will have about 30 VOs, and each VO will have about 13 SHGs, and each SHG will have about 13 members. Over time, an average of 800 USD of ICF would be disbursed by JEEViKA for each SHG.Thus, at any given time, each CLF has approximately 320,000 USD distributed in its system. This money is distributed across VOs, SHGs and final beneficaries, each of whom may have borrowed (and repaid) a different amount. The outstanding principal and interest need to be tracked, so that the incoming funds can be leveraged as fresh credit to other institutions and beneficiaries. Without a clear idea about the performance and delinquincies across 30 VOs, 400 SHGs and over 5000 members, the CLF has no chance to rotate the money, earn interest and become sustainable. And the BPIU, which has injected about 1 million USD in ICF, would be even more clueless!
The challenge is captured in the small animation below, “Managing a Million”.
We now consider how the feedback loop works across the project and community hierarchies to inform the performance of ICF. To keep matters simple, we consider the case of a complete institutional loop, which implies that higher institutions like CLFs have formed, and all VOs and SHGs are properly federated.
As per guidelines, an SHG should have completed its relevant training modules, possess a bank account and complete prioritization of members (for credit) within 6 months of its formation date. By the 6th month, the CLF should ask the VO to appraise completion of the above milestones by the SHG; on confirmation, the ICF is transferred to the CLF (from the BPIU), which in turn disburses it to the SHG’s VO. The VO finally disburses the money to the SHG, after which amounts are disbursed as per the member’s needs and the SHG’s prioritization. This entire transaction is recorded in the books of accounts of the CLF, VO and SHG, along with relevant dates of disbursement, the mutually agreed repayment schedules and the amounts.
With a 3 month moratorium, the SHG starts repaying the VO. The VO now has several options. It can
* Disburse part or all of the repaid amount to members who did not receive top prioritization as GL Disbursed
* Repay part or all of the repaid amount to the CLF as ICF Repayment
* Combination of the above
* Do neither, deposit the repayments in the bank
The decisions taken by the VO are recorded in the account books, along with the financial transactions. The CLF receives repayments on ICF as per the repayment schedule agreed uopon by the VO and its CLF. Once the money starts to flow back in, the CLF can use the corpus to recapitalize members by sending amounts under GL via the network of VOs and SHGs. The transactional accounts between the VO and its SHG, and between the CLF and its VO is digitized into JEEViKA’s DSS.
The first information that either project professionals or management of community institutions need is to identify the SHGs that should have received ICF, but have not received it as per the usual instititional time-line. Once identified, the VO and CLF is well placed to identify the factor(s) that are preventing the disbursement of funds to that SHG and solving the proble.
Once the ICF is disbursed, the repayment schedules are the yardstick by which an institution can monitor the performance of the federated institution. Thus, a CLF/VO can stay informed about the percentage of repayment from each of its constituent VOs/SHGs; they can also agree to certain benchmarks on repayment performance failing which the relevant CLF/VO subcommittees need to take corrective action, along with project management.
After the ICF comes back, it is in the interest of the higher level institutions to disburse fresh loans to the beneficiaries who were not prioritized for funds from the ICF. Holding on to idle funds by higher institutions will not only push beneficiaries back towards the informal credit market, it would also reduce the future income stream of institutions by reducing the interest payments.
Thus, the key information requirements on ICF that managers need to know are:
* Institutions that should have received ICF, but have not.
* Institutions that should have disbursed ICF after receiving it, but have not.
* Institutions that should have repaid ICF according to a schedule, but have fallen behind. A protocol to prioritize such defaulters for actions be relevant subcommittees/project management is also needed.
* Institutions that are not rotating out the repaid amounts as fresh loans.
* Finally, the performance of ICF, as indicated by the average amounts disbursed and repaid at every level, along with the average amounts of GL disbursed and repaid at every level. A high level progress indicator would be to see how many dollars of GL have been invested by an institution, for every dollar of ICF it received.