Microcapital.org yesterday profiled Aloysius P. Fernandez, and his organization Mysore Resettlement and Development Agency (MYRADA).
MYRADA “provides training programs for rural development in the Indian states of Karnataka, Andhrapradesh, and Tamil Nadu as well as staff support to 6 other states and promotion of the Self-help Affinity Strategy in Cambodia, Bangladesh, and Myanmar.” One of the major issues for MYRADA is water management and its allocation.
In addition to being active in this space, MYRADA also has built an expansive network of like-minded groups to help push forth better ways to address resource distribution.
As of September 2005, MYRADA was working with over nine thousand Self-help Affinity Groups (SAGs or SHGs) and nearly 800 watershed institutions, in addition to hundreds of other projects. SAGs, simply, are unions of individuals, usually connected by geographical location, which organize to take advantage of the financial services that can be utilized from their collective assets. MYRADA is affiliated with Banking with the Poor (BWTP), a network of organizations promoting SAG-commercial bank linkages which provide increased access to credit for the poor, according to the MIX Market, the microfinance information clearinghouse. MicroCapital has reported recently on both MYRADA and BWTP.
The greatest aspect of these appears to be the ability to leverage these networks to scale up the effect of microfinancing that such groups have access to. Fernandez clearly recognized this potential and started his own microfinance institution to target these networks specifically.
Additionally, Mr. Fernandez serves as the Chairman of Sanghamithra Rural Financial Services, a microfinance institution (MFI) based in Mysore with total assets in 2007 of more than USD 7.6 million and a loan portfolio of USD 7.5 million, as reported by the MIX Market. The idea for Sanghamithra, which traces its development to the mid 1990s, was born when employees of MYRADA were searching for more efficient ways to link financial institutions and SAGs and in October of 2000 the first loan check was given to an SAG borrower. Sanghamithra has been operationally self-sufficient for at least the past four years and reports a return on assests (ROA) of 0.21 percent and debt to equity ratio of 455 percent. SAG-bank linkages refer to banks which directly lend to SAGs. This is made possible by the power of the group’s assets and their ability to govern one another thereby ensuring that loans are returned on a timely basis, which benefits both the individual and the group in need of financial services.
Through this relationship, Fernandez’s work provides great insight into one effective way NGOs can interact with societies in need.
He is well-known for his work with MYRADA on developing the practice of SAG-bank linkages in the late 1980s and early 1990s, thereby also helping to define the proper role that NGOs can play in microfinance. From his own account, the pilot program that MYRADA initiated with the Reserve Bank of India (RBI) in 1987 was the impetus to a change in rules in 1991 which allowed for SAG-bank linkages.
