FAQs about Bandhan:

1. Is Bandhan a grant or loan funded organisation?

Bandhan is mainly a grant free loan funded organisation.


2. What is the operational methodology of Bandhan?

Bandhan follows a group formation, individual lending approach. A group of 10-25 members are formed. The clients have to attend the group meetings for 2 successive weeks. 2 weeks hence, they are entitled to receive loans. The loans are disbursed individually and directly to the members.


3. What is the economic and social background of the clients?
• Landless and asset less women
• Family of 5 members with monthly income less than Rs. 2,500 in rural and Rs. 3,500 in urban
• Those who do not own more than 50 decimal (1/2acre) of land or capital of its equivalent value


4. What is the loan size?

The first loan is between Rs. 1,000 – Rs. 7,000 for the rural areas and between Rs. 1,000 – Rs. 10,000 for the urban areas. After the repayment, they are entitled to receive a subsequent loan which is Rs 1,000 - 5,000 more than the previous loan.


5. What is the service charge of Bandhan?

Bandhan charges a service charge of 12.50% flat on loan amount. Bandhan initially charged 17.50%. However from 1st July 2005, it has slashed down its lending rate to 15.00%. Then it was further reduced to 12.50% in May 2006. The reason is obvious. As overall productivity increased, operational costs decreased. Bandhan, being a non profit organization wanted the benefit of low costs to ultimately trickle down to the poor.


6. Does the intervention focus on any particular Income Generating Activity?

The loans are utilized in various income generating activities which also include various micro enterprise work. Bandhan extends credit for agriculture, zari work, embroidery, animal husbandry, agriculture, crafts work, small cottage industries, small trading, vegetable vending, fishing, poultry, rice husking, horticulture, manufacture of surgical instruments, pottery, small services, small businesses etc.


7. Why does Bandhan primarily target women?

Way back in the year 2000, Bandhan wanted to address two grave issues - poverty alleviation and women empowerment. The sole solution to it lay in focusing on increasing the family income through women. This is in turn gradually increases the status of the woman in the family as well as in the society. Her conjugal life improves. Her confidence and decision making power also gets enhanced.


8. What is the recruitment policy?

Bandhan has got a very swift recruitment procedure. We advertise in the local daily. The received applications are sorted and eligible candidates are called for the interview. The entire recruitment process takes place on a single day. Before leaving for the day, the selected candidates are handed their appointment letters. The incumbents are then set out for a 3 days In Service Orientation (ISO). Once they complete their ISO successfully, they are accordingly absorbed into the various branches of the organization.


9. How accountable and transparent is Bandhan as an organization?

Bandhan is very transparent and accountable to its various stakeholders. Every year, different rating organisations come and assess Bandhan on various grounds. Over the years we have been assessed by M-CRIL, CRISIL and the like.


10. How strong is the monitoring system of Bandhan?

The various features of the monitoring system are:


• A 3 tier monitoring system – Region, Division and Head Office
• Easy reporting system with a prescribed checklist format
• Accountability at all levels post monitoring phase
• Cross- checking at all the levels
• The management team of Bandhan spends 90.00% of time at the field


11. What about the MIS and FIS System?

All the MIS and FIS Information flows from the branches in a prescribed format to the Head Office by the 5th of every month. The MIS Manger consolidates the data of all these branches in his MIS system and accordingly prepares the various MIS Reports. Similarly, the accounts department will consolidate all the accounts data in the computer and prepare the FIS reports.


12. What are your future plans?

Reaching out to 2 Million members by March 2010. Thereafter, Bandhan will target 1 Million members in each of the following years.


13. What measures does Bandhan take for the capacity building of the staff?

Since the inception of Bandhan, training has been considered an important strategy to build the capacity of the organization. Bandhan training is participatory, learner-centric, problem-focused, need-oriented, promoting individual involvement and group interaction. The training modules are developed from the perspective of the participants’ needs. These courses are continuously upgraded to meet the emerging needs of the programs of the organizations. The resource persons have extensive field experience in India and abroad. All the Assistant Directors also play the role of a trainer. Group leadership trainings are also imparted to the group leaders at regular intervals.


14. Inspite of growing so fast, how does Bandhan manage to be so cost effective?

Bandhan believes in achieving the maximum output through the minimum of cost. Bandhan follows it in letter and spirit. Costs at the branch are kept at the minimum without compromising on the quality of service offered. Standardization, simplification, less of paper work etc helps to minimize cost.


15. What is the liability structure for the loans? Is there joint liability?

When a member wants to join Bandhan, she at first has to get inducted into a group. After she gets inducted into the group, the entire group proposes her name for a loan in the Resolution Book. Two members of the group along with the member’s husband have to sign as guarantors in her loan application form. If she fails to pay her weekly installment, the group inserts peer pressure on her. The sole purpose of the above structure is simply to create peer pressure.


16. Does Bandhan offer any grace period to the clients?

Bandhan offers a grace period of 7 weeks.