Sarhad Rural Support Programme (SRSP)

The Sarhad Rural Support Programme (SRSP, formerly Sarhad Rural Support Corporation [SRSC]) licensed under Section 42 of the Companies Ordinance, 1984 was established in November 1989 with an objective to reduce poverty in the rural areas of NWFP using a participatory community mobilizing approach. The SRSP is presently working in ten districts of NWFP, namely Charsadda, Karak, Kohat, Hangu, Peshawar, Nowshera, Battagram, Mansehra, Abbottabad, and Haripur. The selection of SRSP’s programme area is based on a region’s poverty levels and the willingness of rural communities to partner with SRSP.
The SRSP is engaged in a broad spectrum of development activities. It employs an approach where activities targeting the identified needs of the community are undertaken within the various Programme components which include (a) social mobilization; (b) productive investments; (c) natural resource management; (d) social sectors and gender issues; (e) human resource development; and (f) credit and enterprise development programmes.
The SRSP’s credit programme is aimed at increasing the access of the rural poor to credit for productive purposes, ensuring that a local pool of capital is generated for long-term community access to credit, and encouraging microenterprise development initiatives for increasing productivity and income. Small loans required by members of communities or women organizations are given through a transparent process of the identification of deserving members (with a primary focus on the poorest of the poor) by the community itself. The community takes it upon itself to ensure the timely recovery of such loans. Clients avail credit for livestock, microenterprise, and agriculture from three credit windows of SRSP i.e. short, medium, and long-term. The tenure for credit loan repayment ranges from six to 30 months depending on the original purpose of the loan. To focus on the poorest of the poor more effectively, SRSP has made a special provision in its credit policy for all community members in the form of collateral-free loans of up to PKR 30,000 at a mark-up of 20 %. Two percent of the service charge is given to village activists for their role in credit disbursement and its recovery. A total of PKR 177 million was disbursed in response to the credit demand of the 18,699 individuals (coverage = 15 % of the membership) across the province with an average loan size of PKR 9,425 per borrower as of December 31, 2000. The overall gender balance stood at 37:13.
The grant funds received from various donors until 1997 and disbursed by SRSP as credit are “reinvested” in a pool created expressly to generate a fund to cater to the future credit needs of SRSP clients. This pool comprises recoveries against the grants received from donors in the past, service charges earned on loans disbursed, and interest earned from bank balances. The SRSP has established such funds in each of its region. However, since the SRSP has not received any donor funds since 1998, it has had to search other avenues. Funds were therefore arranged in the form of lines of credit from the Government and various commercial banks that are keen to invest in the microfinance sector. At present, the amount disbursed comprises 17 % grants, 39 % credit lines, and 44 % revolved funds.
Experience from field studies show that community organizations are well aware of the importance of savings, but lack the knowledge to utilize them effectively. SRSP conducts brainstorming workshops where investment experts provide professional guidance to assist communities in the use of village-based pools of capital. Savings have not been made compulsory to access SRSP’s loan facility as compulsory relationships can discourage people from even applying for loans.

Performance Indicator (The MIX)