ARTH Khushhali or Pay-for-Performance is a monetary incentive that incentivizes good social behaviour in the customers.
ARTH Khushhali or Pay-for-Performance is a monetary incentive that incentivizes good social behavior in the customers. Under the scheme, approx. 1500 woman-led enterprises that had active loans as of February 2022 were provided with up to Rs. 10,000 extra monetary assistance. These entrepreneurs were selected keeping in mind a preference for women-led businesses and banking correspondents to promote gender financing. A combination of micro-entrepreneurs and banking correspondents has been chosen to scale the impact.
The program is an initiative of SAMHITA, who partnered with ARTH to implement the same.
- To imbibe and inculcate a positive behavioral change in the customer behavior and loan borrowers. The incentive amount serves as a positive reinforcement mechanism to influence behavior in favour of timely repayments
- To leverage existing pools of philanthropic, business and public sector funds to make timely, affordable and accessible capital available to nano and micro enterprises in the informal sector through grants and other innovative financing tools.
- To facilitate technical assistance (such as skill development, entrepreneurship training, market linkages etc.) wherever needed, to complement the financial capital.
- Promoting financial education and awareness.
Approximately 1600 Micro entrepreneurs from semi urban districts in the Uttar Pradesh region and Banking correspondents from pan-India, both male & female were targeted.
The incentive amount of 10% of the principal amount was disbursed to the participants showing good credit behavior. The incentive amount also served as an extra side income for the participant’s business/personal expenses apart from being seen solely as a reward for good repayment behavior.
Monitoring, Evaluation and Learning:
- No. of micro entrepreneurs given the incentive amount: 746.
- No. of banking correspondents given the incentive amount: 776
Under this, mostly women nano-business owners were considered and a good proportion of people given the incentive were the ones who couldn’t pay their EMI dues earlier due to reasons related to COVID-19, or other exigencies. They were specifically targeted under this support program so that they inculcate good repayment behaviour, and their good behaviour is positively reinforced. This incentive amount also served as an extra side income for the participant’s business/personal expenses apart from being seen solely as a reward for good repayment behaviour.
A total of Rs.62,50,000 (62 lakh 50 thousand) was completely disbursed as grant money to the beneficiaries. The 10% of the principal loan amount was the incentive amount for the beneficiaries, with an upper limit of Rs.10,000 About 88 beneficiaries received Rs.10,000 as an incentive amount.
Most of the micro entrepreneurs under this initiative under this model also received basic financial literacy training and awareness as a part of ARTH’s social welfare intervention “Vittiya Paathshala”. This initiative aims to bridge the disparity of financial education amongst women entrepreneurs and underprivileged nano and micro business owners. Vittiya Pathshala is held during the process of loan disbursement where each of our customers is briefed regarding safe and secure credit and debit transactions, understanding the terms and conditions of financial instruments, and maintaining and analyzing business transactions efficiently, building on financial portfolios, etc.