|
PROMOTE |
DISCOURAGE |
| 1.
All loan applications must be addressed to the Sangha and
not to the office bearers
of the Sangha. |
1.
Few members must not be allowed to repeatedly
corner all loans. |
| 2.
All loan applications must be scrutinised and
approved, modified or rejected in Sangha
meetings only, and minuted accordingly |
2.
Large loans per member must not be permitted
until the CMG is financially strong
and has systems of administration
that are adequate to motivate
and guide behaviour. |
| 3.
Repayment schedules must be finalised and
minuted when loans are disbursed. |
3.
The practice of deciding on loans, seeing how
much money there is in the CMG and
asking MYRADA to meet the deficit is
not credit management; it should be discouraged
at all costs. |
| 4.
Loans must not be disbursed to persons
(substitutes) other than the Sangha
member who has actually applied
for it. |
4.
Service charges on loans must be clearly differentiated
from recoveries, regularly
recovered and entered as such in
the books |
| 5.
Promissory notes obtained by many CMGs
for large loans should be between the
CMG and the member
6. Loans
(cash or cheques) must be disbursed
only at Sangha meetings.
7. The practice of
giving a second loan before
the first is repaid should be carefully
assessed, particularly if there are
overdue installments. |
|
|
FUND
MANAGEMENT RELATED |
|
PROMOTE |
DISCOURAGE |
| 1.
Frequent rotation of common fund for diverse
purposes signifies an active CMG. |
1.
Large sums of money lying unutilised for long
periods represents "process blocks"
that have to be analysed and cleared. |
| 2.
Fund management becomes responsible when
it consists of the members own hard
earned money. Therefore, project contributions
should take care that the balance
between members money and project
money facilitates rather than destroys
responsible behaviour. (There are
examples where: (1) Project contributions have made
members take careless
decisions which they would not take
with their own money. (2) Members have
rotated only the project money, keeping
their own savings intact.) |
2.
Large amounts of money for infra- structure,
community programmes, or even
credit management should not be routed
through the CMG since this can distort
the working of the CMG to fund monitor
rather than fund management. |
| 3.
All accounts should be in the name of the
CMG itself, and not in the name of one
or more members |
3.
No money transactions should be conducted
outside the meetings, whether
it relates to loan disbursals, collection
of savings & repayments, or decisions
with regard to using funds for community programmes. |
| 4.
Signatories to the CMG bank account must
be rotated periodically. |
4.
MYRADA staff should not handle CMG money.
Their role is only to support, advise,
guide and train. They should not function
as CMG office bearers; neither should
they accept (even informally) to perform
those functions that are expected
to be performed by the CMG members
themselves (eg., depositing money
in the bank, making withdrawals, making
purchases etc.) |
| 5.
Fund management tends to improve if CMGs
display charts showing lists of members,
loans, recoveries, overdues, balances
and other activities. |
5.
No CMG member or office bearer should hold cash balances
at any time. |
| 6.
All decisions regarding fund management and
fund utilisation should be verifiable through
the minutes of the CMG. |
6.
The possibility of members obtaining CMG
funds at lower service charges & lending
it to others at higher rates should
be borne in mind while deciding on
service charges. |
| 7.
A CMG should preferably have only one account
for the common fund. The practice
of keeping savings in one account
and recoveries in another need not
be discontinued but carefully assessed
as to whether it fosters better
management.
8. CMG purchases
should be handled by an appropriately
appointed Purchase Committee. |
|