Until recently, women were considered the most disadvantaged segment of the society, specially in the context of economic process. The majority lacked assets and were thus deprived access to institutional credit.

To address the plight of the poor women, efforts were made by the non-governmental organizations (NGOs) for improving their accessibility to institutional credit which is visible, both in the developed and the developing countries.

The Women World Banking (WWB), a US-based international NGO from early 1980s, is promoting entrepreneurship among women and has now penetrated in all Asian and African developing countries.

They have brought institutional credit within the reach of many poor women through linkage with financial institutions/ banks in the targeted countries. The stand-by letter of credit, established by the WWB in favour of bank giving loan to women without collateral, forms the viable surety for the recovery of loan.

Apart from this, they provide assistance for the use of latest technology and modern inputs and strive to give market access to products through their worldwide network of affiliates.

A notable example is the Grameen Bank of Bangladesh which emerged as an NGO and later on, converted into a rural-based cooperative bank. It’s success of economic empowerment, specially of women, is globally recognized. The replication of its strategy has culminated into a global Grameen network.

The NGOs have a greater role in community development programmes. Apart from improving educational and health conditions, a number of these NGOs have an “economic empowerment of women” as an important agenda.

These are actively promoting entrepreneurship through their intermediary role in making the institutional credit available, besides, facilitating access to training programmes for developing entrepreneurial, marketing and technical skills. Those operating in rural areas assist in adopting improved technology and modern inputs in agriculture activities, as well.

The NGOs act as facilitators to women in rural areas and katchi abadis by identifying potential borrowers through household survey and appraisal. In addition they handle loan formalities including the documentation and supervise the end use of loans, and also help in its recovery.

Some NGOs have undertaken the function of direct disbursement of credit and the acceptance of deposits of the communities they are serving. Notable are the Agha Khan Rural Support Programme, the Orangi Pilot Project, the National Rural Support Programme, the Kashf Foundation, etc.

The NGOs handling credit disbursement, operate on the principle of “saving first and credit later”. These, and other self-help groups fix a minimum period of regular savings by potential borrowers before they become eligible for loan.

They set up a revolving fund, build from the membership fee and savings. Major funding comes from internal and foreign agencies and through banks’ credit lines. Credit lines are generally extended against the placement of deposits, and in some cases on the track record of the NGO concerned.

Those undertaking credit delivery as a major item must have strict market-oriented approach. The services should be priced in such a way that the operations remain sustainable, and the clients are provided quality service. Their strategy should be client focussed and towards increased market penetration. The NGOs serve as a link to potential borrowers in areas where banks do not have branches — the First Women Bank (FWB) being the pioneer since early 1990s.

It was the realization of the bank management that the conventional credit schemes and the delivery process involved would be of no use for the class of women, the bank is focussing. It took the challenge of linking up with individual and self-help groups of women in the rural and far flung suburbs of big cities through the NGOs — not only for micro credit delivery but also to update their business management and marketing skills.

By now the programme has been extended to all villages and suburbs within the radius of 60km from the bank’s branches through more than 20 NGOs. The NGOs are doing community development work in the targeted areas by identifying borrowers.

Women for whom there was no surety can now acquire loan through mutual guarantee. The FWB has established its own business centres in Karachi, Lahore and Islamabad and provides marketing outlets and training for updating the skills of the desirous women.

The strategy turns these groups into pressure groups for individual borrower, ensures effective utilization of money along with proper handling of business, and prompt repayments.

The linkage through the NGOs with the self-help groups nurtures problem solving approach among members, as repeat loaning depends on the performance of all members relating to their first loan. As such the rate of failure is minimal.

The micro finance banks, both in public and private sectors, is a breakthrough in bringing institutional credit within the reach of poor women living in remote areas. Along with credit there is a need to provide all support services to clients.

Presently, only two micro finance banks are operating with the limited network of branches. Lately, the micro finance banks have been allowed by the State Bank to make arrangements for credit delivery and deposit, outside their place of business/branch premises.

This can be done either through mobile banking or by setting up booths/working stations manned by one or two staff where a full fledged branch is not viable.

The micro finance banks can get tremendous boost if the community-based organizations and the NGOs are associated as facilitators or intermediaries.

This would facilitate in forming the self-help groups of women entrepreneurs and would also speed up communal lending programmes. Furthermore these can be instrumental in providing support services to women.