BSS Microfinance

• Meetings at the center can be conducted either weekly, fortnightly or monthly, based on needs by the sub-groups.
• Each member needs to have an attendance of 70%. On the day of members applying for the loans, the attendance of the center must be at 70%.
• The total amount of loan taken by the clients should not be more than INR 1 lakh (this excludes loans taken up clients for medical or educational purposes).
• For the first cycle of the loan, the amount should not exceed INR 60000. At the same time, the tenure should not be less than 24 months for loan amount which are more than INR 15000.
• In order to be eligible for the loans, the annual household income for the borrower must be less than Rs. 100000 INR for rural areas and Rs. 160000 for urban areas.
• The borrower of the micro loans can only be part of one SHG (Self Help Group) or JLG (Joint Liability Group). Along with that, the borrower should only be a part of maximum two NBFC-MFIs programs included the one provided by BSS.
• The members of the center or group must first approve the application of loan and take responsibility for the repayment process.
• As a part of the loan approval process, verification by the credit bureau is a must.
• Clients should be able to provide with at least two KYC documents.
• For an efficient process in place, at least two staff members must approve the loan application along with acceptance from the credit committee of BSS.
• The loans are given out with the intent of helping clients with income generating activities. However, these exclude business such as alcohol, tobacco, arrack selling and any other forms of activities which are socially prohibited. Loans can also be availed for education, housing and also improving the quality of life.

• The disbursement of the loan would take place in the field office and in the presence of more than one person.
• On the day of loan disbursement, at least 70% attendance in the centers should be present.
• Disbursement of loan is done based on responsibility of group/center.
• Disbursement of loan is also based on the previous credit history of center and group.
• Mechanism to look into proper utilization of the loan amounts and discipline to be maintained at the centers must be in place.
• Clients ought to receive their copy of the loan agreement which contains details such as repayment and promissory note, once the disbursement has taken place.
• Clients are entitled to a pass book and entries in the same would be done in vernacular languages for all members, post loan disbursement.

BSS Microfinance does not take any form of collateral or security for the loans provided to its clients.

Loan Utilization

• Clients must use the loans for the specific purpose for which they have availed the loan..
• Regular checks take place in the centers to ensure the loans are being utilized in the appropriate manner.
• Once loans are disbursed, next center meeting includes discussion on loan utilization.
• Once every six months, a check is done to verify if there is need for further loans or not.

Loan Limits

The minimum amount of loan that a client can avail for is Rs. 8000 and a maximum amount of Rs. 40000. The value of loan depends on the product type. Any loan amount post that would be granted in the multiples of 1000 based on eligibility of the client.

Repayment

Clients can choose their mode of repayment and also the duration in which they want the same. It can be weekly, fortnightly or monthly.

• FGL – 26
  Fortnightly General Loan which can be availed for a total of 26 fortnightly installments.
• FGL – 51
  Fortnightly General Loan for a maximum of 51 fortnightly installments.
• FGL – 52
  Fortnightly General Loan which can be availed for 52 fortnightly installments.
• FGL – 53
  Fortnightly General Loan for 53 fortnightly installments.
• Weekly General Loan
  The loan is offered with maximum of 49 weekly installments.
• Monthly General Loan
  This loan type can be repaid in total of 12 monthly installments.

The amount of loan varies from a minimum of Rs. 8000 to a maximum of Rs. 40000 for the fortnightly loans whose installments can be picked up from 26 fortnightly, 51 fortnightly, 52 fortnightly or 53 fortnightly.

For loans with tenure at 49 weekly installments or 12 monthly installments the amount is Rs. 6000.

All the loans come along with a 1% loan processing fee along with service taxes on the amount that is disbursed. There are no membership fees or prepayment fines for any types. The loan passbook that all the clients are entitled to is also free of cost. For quarter ending on 30^th June 2016, the effective interest rates were at 24.11% for the micro loans. The interest rate for the loan is fixed 25 %.

The decision of fixing the interest rate of the loan at 25% reducing by BSS Microfinance was done after taking into consideration several factors. Some of them were operational costs for the organization, effective cost incurred by the borrowers, provision for loss or write off in some cases, also taken into consideration is the cap set by RBI for interest rates. BSS Microfinance also has provisions for providing rebate on the interest. The rebates are subject to maximum cap provided by RBI and also the inability of clients to pull themselves out of difficult financial situations. The company considers all the clients to be in the same risk category and that is the reason the interest rate remains the same for everyone.

BSS Microfinance believes in elevating the financial condition of its clients with the help of its products. They also aim to enhance the community of their clients with the help of corporate social responsibility. The list of activities that come under the category of corporate social responsibility are defined in the schedule VII of Companies Act 2013. BSS Microfinance aims at focusing on one or more of the following social responsibilities at a certain point in time.

• Promotion of education in the locality.
• Various developmental projects in rural areas.
• Improving sanitation and water conditions.
• Efforts to eradicate hunger and poverty.
• Provide information on how to improve health care.

BSS Microfinance has a transparent system in place when it comes to spending on Corporate Social Responsibility (CSR). The company shall spend a minimum of 2% of the net profits that the company accumulates taking into consideration the immediate prior three financial years. The company would give preference to local areas of their clients and also surrounding areas for carrying out CSR. If these activities or projects provide any surplus, the same would not be added to the profits of the organization.

All the activities or projects done as a part of this initiative is to be reported and the same must be disclosed by the company in its annual reports. The same must also be published on the company website as well. The CSR board created by the company takes up the responsibility to review the activities on a yearly basis or more frequently on need basis.

BSS Microfinance has a grievance redressal system in place for any complaints or grievances faced by its clients with multiple escalation system.

• At Center Manager LevelAny grievances faced by the customers regarding loan, services, or other issues can be brought to notice by lodging of complaints with the center manager. It is compulsory to have written complaints as it brings in transparency and helps in resolving the issues clearly. The complaint is acknowledged and complaint number is provided. The Center Manager will try to resolve the issue.
• At Field Office Manager LevelIf customer is not satisfied by the resolution provided by the Center Manager, they can escalate the same to the field manager during his regular field visits. The details of field office can be found on the loan passbook provided to all the customers. The field manager would try to resolve the issue within 30 days of receipt of the complaint.
• At Head Office LevelThe grievances or issues brought forward by the customer should get resolved at the center manager or field manager level. However, in the event of customer being not satisfied with the resolution provided, they can reach out to the customer grievance redressal cell. The grievance redressal cell would resolve the issues within 30 days of the receipt of complaint at the head office.

In the event of customer not being happy with the resolution, they can submit their complaints with the Association of Karnataka Microfinance Institutions (AKMI) and the Microfinance Institutions Network (MFIN).

Contact Details

The registered address of BSS Microfinance is No. 11, 2^nd Stage, 2^nd Block, Outer Ring Road, Near BDA Complex, Nagarabhavi Layout, Bangalore – 560072. One can reach out to the company at +9180 3271 1266, +9180 2318 8389, +9180 6573 2387. Any concerns or clarifications can also be done via emails at swamukti@swamukti.com or bss@bssmicrofinance.co.in.