Client Focus and Client Understanding are the key words that define SML’s approach towards microfinance. SML’s continued efforts to improve organizational efficiency through better automation of its systems and processes has contributed towards higher efficiency level and transparent systems and processes and has allowed it to emerge as the premier MFI in the country.

SML has stood by its commitment to work towards poverty alleviation with better pricing policy and responsive systems. The approach has paid off and today SML has built the platform that would allow it to launch a more ambitious campaign to reach out and serve as many poor women around the globe. The Top ratings provided by rating agencies, such as M-CRIL (Micro Credit Ratings International Ltd.) and CRISIL reflect SML’s strong performance.


For-profit Approach for Social Returns
SML employs a for-profit approach to create social returns by channelling funds from development institutions and commercial banks as collateral-free loans to Joint Liability Groups (JLGs).

Grameen Model
JLGs are the central element of the Grameen lending methodology adopted by SML, wherein the group lending technique is used to extend loans to women members who have formed themselves into groups of 5 each, with the general criteria that they have to be of the same age group, same area, and be known to each other. Family members or relatives cannot be part of the same group. Members of each group receive seven-day training on various aspects of the operating model, during which they learn their own signature and to have an identity for themselves. Eight groups come together at “centres” for weekly meetings. The members assume the responsibility of approving loans, disbursement, and ensuring repayment.

The loans are of amounts no greater than USD 250, and have to be repaid in 50 weekly instalments. There is no collateral to back these loans and repayment is ensured using social/peer pressure, as the group is responsible for the collection of the loans. To ensure that the loan is utilised only for the intended purpose, the money is given in a staggered manner (2:2:1) and subject to satisfactory assessment by the field credit officers.

Transparent Operations
SML’s members learn about the company’s loan delivery method through a public orientation meeting that briefs them on loan disbursements and related procedures. After forming groups of their choice and agreeing on the income generating activity they would like to pursue, SML assists its members by equipping them with basic business development skills such as pricing, marketing, and quality management. Field staff facilitates weekly group meetings, within which members undertake the responsibility of approving loans, disbursements, and repayments. Members go through additional social development programs that cover topics ranging from children’s education to health and nutrition to sanitation.

Effectively Reaching the Poorest
A study by the International Food Policy Research Institute (IFPRI) has revealed that SML targets the bottom most segment of the poor to an extent of about 85% of its members, indicating that the MFIs targeting tool is effective in identifying the poorest of the poor.

Further studies conducted show that 76% of SML’s members have experienced significant poverty reduction, leading to greater control over income, assets, and expenditure.