Lifeline Has Implemented The Grameen Model (Sans Interest) In Its Operations
In terms of structuring the operations, TLF has implement the Grameen model pioneered by Nobel Peace Prize winner Mohamed Yunus of Bangladesh. In this model, there are five members forming a group, with one of them being a leader. All women have to have ,or start, a business of their own, and be micro-entrepreneurs. The groups are formed after interviews, and each loan is also preceded by a loan assessment process. During the interview the purpose, requirement and benefit from the loan to the borrower is assessed. We educate the member, on how to put the funds to best use. We encourage women indulging in hazardous / detrimental activities (such as beedi rolling) to change business and start new activities.
To ensure sustainability of operations, a fixed transaction charge is collected from members at a constant Rs 10 (USD 15 cents) per week during repayment of an outstanding loan. Transaction charge levied has not changed since inception in 2010-11. No fee is collected from the member in the period in-between loans. The transaction charge goes directly to pay the honorarium to the loan and accounts officers employed by TLF at each branch. It is ensured that the charge collected is less than the expenses incurred, and the rest is subsidized by TLF. The salary of full-time employees is borne directly by TLF through donations collected for specifically for administrative costs. On an average, the levy comes to between 1-5% depending on size of the loan. No transaction charges levied on education loans and other grant activities.