Sometimes called “banking for the poor,” microfinance is an amazingly simple approach that has been proven to empower underprivileged people around the world to pull themselves out of poverty. Relying on their traditional skills and entrepreneurial instincts, economically disadvantaged individuals access targeted loans to start, sustain, or expand small-scale businesses and to support their family. Tarayana’s extensive experience in grassroots-level development of rural communities has taught us that breaking the poverty trap includes engaging the communities in micro-enterprises through education and facilitated access to credit at reasonable rates of interest.
Tarayana initiated this programme in 2008 based on the demands put up by the communities we serve as their access to credit was limited. Micro credit since then was incorporated as an activity of the livelihood projects the Foundation implemented.
Tarayana oversees all phases of the microcredit programme. First, Tarayana field officers identify qualified applicants by reviewing their financial history and future prospects. Approved applicants are then granted a small loan at 7% interest per annum, a very low rate compared to official lending institutions. Loans are directly levied from Tarayana’s own funds. The small loan is then applied to micro businesses that range from weaving, growing and selling vegetables, raising chickens to sell eggs, breeding livestock, and wood carving, purchasing cardamom seedlings, CGI sheets and power-chain machines, and setting up small shops.
The very small loans provided by Tarayana Foundation have helped small groups and households improve their living standards. Until 2013, the Foundation had provided loans to 210 individuals and 10 groups,since then this programme is kept on hold as the Foundation was undergoing some strategic changes. There is still a huge demand from the communities the Foundation serve.