What are the CCFs?
CCFs are alternate credit arrangements that ADATS helps each CSU make at the village level. Member Coolie families borrow from their CCFs for petty productive, productive and consumption purposes, and repay on dates that they agree to at the time of taking the loans.
Member Coolie families elect their Cheque Signatories and open CCF bank accounts in the names of their respective CSUs. ADATS then gives out starter grants for them to begin their alternate credit structure. Later, further grants are given for the Coolies to enhance the capital of their CCFs, based on proper rotation of earlier grants. The total capital of each village CCF is built up, in this manner, to reach village level targets of Rs 5,000 per Member Coolie family.
As on 31 January 2012, ADATS has granted out a total of Rs 65,189,568 to the village CCFs. With this capital, they have given out a total of 60,193 loans worth Rs 188,859,614.
The CCFs operate on a no loss plan. In the event of a borrower not being able to repay, the remaining Member Coolie families contribute to repay the loan on her behalf. They later make efforts to collect from the defaulter, if possible.
There is no interest charged on loans. But, as per the Coolie Sangha guideline to Member Coolie families, they are asked to voluntarily contribute 10% of their loan amounts to their respective Sangha Funds.
Procedure for Borrowing
Those wanting to borrow from their CCF present their case in the CSU Meeting, explain the need, utilisation plan, and a realistic repayment date(s). There are no standard or forced repayment dates on CCF loans. Once the CSU Meeting approves of the purpose, amount and repayment date, their decision goes to the Mahila Meeting which has a veto right on CCF related decisions.
Being a process driven activity aimed at empowering the Coolie caste-class, the objectives of the CCFs are organic and expanding. The CCFs are not “rural banks”, and to view them in that light would be misleading. They are grassroots owned and bottom-up operated credit instruments in the hands of thousands of small and poor peasants. While sound and tested banking practices certainly have a place in their management, the banking logic that follows cannot necessarily be applied to assess their performance.
In the beginning, the CCFs were seen as instruments to support the Coolies in their socio-political struggle. Economic objectives were subsidiary to political ones.
Later, or even as an extension of their initial ambition, the Coolies were very successful in combating usury which existed in the form of barter and price-fixation practices, bonded/ contract/ child labour, mortgaging of lands, exorbitant interest rates, etc.
Today, in most villages, these horrific forms of usury have all but disappeared. Bonded labour does not exist, Coolies do not get indebted to or loose their lands to the Ryots, and money lending has not found its way into the poorer quarters of the villages.
Then emerged 2 deeper economic objectives:
- To kill a deliberately inculcated fiscal indiscipline in the rural poor:
Politicians and village touts find it in their interest to mislead the rural poor into believing that they need not repay Bank loans given under various anti-poverty schemes. They want the poor to internalise the belief that they cannot enterprise, and are not credit worthy.
- To wean fist time petty entrepreneurs through various steps needed for them to succeed.
Finally the Coolies’ desire to use their CCF capitals as instruments for economic advancement (increased income and assets) became a serious objective. They realised that sustainable economic development could not be achieved unless and until Member Coolie families were plugged into mainstream finance. The CCFs therefore began to be seen as instruments to make such a plugging-in possible.
These objectives are not stagical. The seeds for a later goal are already present in an earlier dream. At every stage of evolution of the CCF objectives, dynamism is provided by a creative minority who dare to clutch more than what is offered...
All these objectives will co-exist at any given time, even within a single village or Cluster. ADATS and the Coolie Sangha realise that, though there are thousands of Member Coolies who have indeed “Become Rich in 3 Years!”, this cannot the achieved by the entire membership, all at once, in one go.
Status of the CCFs
As on 31 January 2012:
- A total of 60,193 CCF loans amounting to Rs 188,859,614 have been given out
- Average Borrowing works out to Rs 3,137
- This has been done with a CCF Capital of Rs 65,189,568 which has been rotated 2.42 times during the past 20 years
- In spite of continuous drought and crop failure, overall Repayment Rates (in the functioning as well as dropped village CSUs) are at 87.78%
(Performance figures for the functioning villages is even more impressive. Exposed Portfolio Rate in functioning CSUs is 43%, Delinquency Rate is 41% and Recovery Rate is 89%)
- Good Loans stand at Rs Rs 23,612,522 (36%) of the CCF Capital, Overdue at Rs 23,086,429 (35%), and Bank Balances at Rs 18,511,631 (28%)
Member Coolie families borrow to meet a wide variety of needs that run into hundreds of village specific purposes. They can broadly be classified into 5 categories. Of them, Crop Loans, Cattle Rearing, and Trade & Enterprise, are the most popular in terms of number of loans as well as amounts borrowed.
(as on 31 January 2012)
|Purpose||Amount Borrowed||No. of Loans|
|Trade & Enterprise||88,821,323||47%||9,290||15%|
Efforts to Improve Performance
ADATS and the Coolie Sangha recognise that economic impact is the only way to sustain socio-political and gender gains. Therefore we make constant efforts to improve the CCFs’ performance. Studies and evaluations are commissioned, internal reviews conducted, and experts invited to accompany the Coolies in their struggle to become entrepreneurs. Those who have provided valuable and critical insights include Ajit Mani, Prof. S. Giriappa and Dirk van Esbroeck.
ADATS encourages students from India and abroad to make their own scathing and critical appraisals of the village CCFs. The latest among them was conducted, over a 6 month period in the first half of 2006, by Alix Gentil, a post graduate student from France.
Alix pointed out that the village CCFs were gradually turning out to be a "single-purpose mass-lending & mass-repayment" activity, almost exclusively for Crop Loans. Member Coolie families were not using it as a responsive instrument for their petty enterprises, in spite of so many Coolie youth and single women trying their hand at an ever increasing number of individual and collective economic ventures.