Group Lending Model

In the field of traditional microfinance, ACFL works on lines of the Grameen model suitably modified for Indian conditions which ensures that financing reaches each individual member of the group based on merit. ACFL works on a robust and comprehensive risk control model for MFI Operations. ACFL is client centric organization and all its processes have been designed towards, client convenience and risk control.

Group Formation

Up to 5 women, who live in the same area and have known each other for the past 3-5 years come together to form a group. The group is self-made with support from the ACFL Grahak Mitra and includes members who are comfortable but unrelated with each other. A clear Leader for the group is also identified.

Compulsory Group Training

Once the group is formed, the group is given training on:

  • Products and Services of ACFL
  • Interest Rate and Processing Fees
  • Policies and Procedures to be followed
  • Group guarantee concept
  • Benefits of the model
  • How to acknowledge
  • Details of Insurance

Group Recognition Test

Once the training is completed, ACFL conducts a formal test to ensure that all the members of the group are aware of and understand the loan concepts as enumerated above. For a group to be eligible to receive a loan from ACFL, this test has to be compulsorily passed.

Group Meetings

Each group is typically comprised and has a mandatory fortnightly meeting. During these meetings, the following takes place, in addition to collection of EMIs:

  • Discussion of Social/Community issues
  • Communication of ACFL Developments/Changes
  • Discuss on issue faced by them and how ACFL can support them.
  • Collection of repayments