The Ministry of Rural Development (MoRD) has entered a Memorandum of Understanding (MoU) with MicroSave Consulting (MSC) to optimize the utilization of Community Investment Funds (CIF) and enhance the effectiveness and sustainability of Community-Based Organizations (CBOs). The MoU was signed by Charanjit Singh, Additional Secretary, Rural Livelihoods, MoRD, and Manoj Kumar Sharma, Managing Director, MicroSave Consulting, in the presence of senior officials from both organizations.
Under this partnership, MSC will conduct a detailed analysis and provide strategic interventions to optimize CIF disbursement and utilization by Cluster Level Federations (CLFs). The focus will be on strengthening the financial structures and management systems of CLFs under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).
The initial phase of this initiative will involve assessing the current financial status of CLFs and strategically disbursing CIFs to CLFs. To date, approximately ₹22,296 crores have been disbursed. This effort aims to address the challenges faced by Self-Help Group (SHG) members in accessing timely credit by revisiting and improving products and processes at the CLF level. The ultimate objective is to transform selected CLFs into microcredit institutions capable of delivering effective financial services to SHG members.
"The impact of this initiative is significant. It will lead to more efficient fund allocation and strategic disbursement, thereby strengthening CBOs. Additionally, it will ensure that more SHGs receive loans, bolstering their financial capacity and enhancing operational effectiveness," said Manoj Sharma, Managing Director, MicroSave Consulting.
The DAY-NRLM, a flagship poverty alleviation program of the Ministry of Rural Development, Government of India, operates on the principle that robust institutional platforms empower poor households to develop their human, social, and financial resources. To achieve this, DAY-NRLM supports institutions of rural households, collectively known as CBOs, which include SHGs, village organizations (VOs), and CLFs.
Through financial and non-financial support, DAY-NRLM seeks to strengthen the financial capacity of CBOs and facilitate livelihood activities. The financial support enables members to borrow for household consumption and business needs at favourable interest rates, with repayment in easy instalments.
