For NGOs

The first area that is essential to discuss is of course the incentives for the NGO when deciding in partnering the cooperative. When becoming a partner with FAMCO, the cooperative will seek to consolidate different NGOs by emphasizing on a common structural background. NGOs will be encouraged to align to the cooperative policy standards and management procedures. Many NGO’s have different approaches to financial accounting, project administration, communication relations, etc. However, by seeking partnership with the cooperative, NGOs will have a possibility to discuss, consult and evaluate their own methods and structures ultimately providing an incentive for greater effectiveness, cost reduction and coordination. Yet, this does not mean that all NGOs should act and be shaped identically, but it is visualized that the cooperative will establish a set of essential supra organizational systems and policies that will facilitate organizational development and stimulation. These common parameters will be largely influenced and formed in a democratic way by all NGO representatives. By entering the cooperative, it is envisaged that NGO gradually will upgrade their social business from grass-root level administration to become more effective and professional standards over time.

Furthermore, NGOs can realize that it can further empower its SHGs by actively consolidating them with the peoples’ Cooperative bank. Moreover, NGOs will have, when joining the cooperative, a unique incentive for reducing the different projects and specialized in a given area of society by receiving quality and comprehensive support from the group of experts.

FAMCO will establish a team of experts that will be of service to the NGO who require guidance and financial advisors. Fundamentally, FAMCO will also introduce new training and education sessions for the NGO staffs to improve their skills and leadership abilities. Furthermore, the respective SHGs of the NGO will have a chance of coming together to create enhanced credit accessibilities and investment potentials. The greater mobilization of SHGs the greater amount of share capital can be provided. Serving the marginalized communities is done most effectively by meeting their demands and credit requirements, thus NGOs must realize that they can improve their own situation concurrent with the SHGs.

NGOs and SHGs can form a branch level committee to communicate, coordinate the operations and activities of FAMCO under the board’s supervision and control. The communication systems between the district level and the head office will always be open for suggestions, discussions, problem-solving mechanisms, and consultancy.

As mentioned earlier, the mobilization of resources and assets will enable savings, thrift deposit, investment potential, return on share capital to a much larger extent. It will open a credit market as well as new education and training possibilities for the SHGs.

The NGO, once gaining membership, will still identify itself as an autonomous and sovereign entity though under the umbrella of FAMCO. This means, that the NGO will be under the supervision of the board ensuring that it maintains a viable trajectory and proper coordination of management and project activity. The NGO can equally engage in SHG meetings and work as it did before obtaining membership, and can still arrange loans to the SHGs, though keeping in mind that credit duplication is a possibility.

The more SHGs the NGO can bring into the cooperative the more will FAMCO be able to support some of their activities. The staff working with microfinance in the respective NGO programs will be able to get support in terms of salary, and welfare benefits according to their cooperative involvement. No direct support from FAMCO will be given to any member NGO, only indirectly if any NGO staff would collaborate with both the cooperative and FAMCO.

However, established branches in the domain of the NGO will be supported by FAMCO by sharing administration costs and other expenditures to the extent of the cooperative utilization. FAMCO will equally set up a free consultancy committee in the field of good governance and microfinance available for any NGO who needs input and problem solving solutions.

The relationship between NGO and its donors will continue as before, as the ooperative cannot receive any donation from foreign donor directly. So the NGO can continue to mobilize the support for the cooperative from the donor and can invest the funds in the cooperative once the cooperative attains the legal status of the cooperative bank. Thus the donations can be invested in the cooperative and the groups can be supported in terms of loans legally. The returns from the investment can be utilized by the NGO for its objects.