Expansion plans as we move into 2020

As the SUNNA microfinance program continues to be a great success we are looking for ways to expand the program. We are proud to be moving closer to the 1000 loans milestone while still maintaining 100% repayments. On our 3 years journey to get to this point we have accumulated wealths of experience on running the program successfully.

Therefore we see opportunities to increase the fund size further. As part of these expansion plans we conducted a workshop last week with a group of new team leaders. By expanding the group of team leaders (who act as local connectors to our target group) we are able to:

A) increase our reach to deserving borrowers in new parts of Tamil Nadu in an effective way

B) maintain good risk distribution so that each team builder is newer responsible for too large share of the total portfolio

C) engage with and empower an inspiring group of community servants that are already making great impact in their environment

We are looking forward to more wins ahead!

Workshop participants

Workshop in action

Micro finance in emergency relief situations

Extreme weather events seem to be becoming more frequent than before. In November 2018 one such event occured in South India as Cyclone Gaja hit parts of Tamil Nadu. The state government has estimated that the cyclone uprooted over 170,000 trees, damaged about 117,000 houses and claimed 45 lives. The international community responded with immediate disaster relief, but the impact from such events can be long-lived in particular for the poorest of the poor. 

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Thousands of houses were ruined by the Gaja Cyclone

Natural disasters typically impact poor households financially both through reduced income generation ability and increased expenditures:* Reduced ability to earn income. This happens both because demand for some products and services can go down, but also because in some cases the income generating assets have been destroyed (e.g. crops, livestock, tools-of-trade or other equipment). Even if replacement of these asset is available, the household might not have funds to purchase it.* Increased expenditure. Prices of (e.g. food or fuel) might have increased dramatically due to high demand and/or short supply. Investment in rebuilding houses and recovering basic household items could also increase. Health crises or epidemics are common features of post-disaster environments and may result in increased expenditure for health care and medicine.

Now 6 months after the Gaja Cyclone hit many families in Tamil Nadu are still struggling financially while a lot of the immediate disaster relief work has come to an end. 

To help some of those effected regain financial independence the Sunna Microfinance fund in May 2019 funded several micro loans which were distributed in the affected areas by Doss, a local team builder. The loans were used to purchase goats and rather than having a monthly repayment the borrowers will repay by handing over a small goat in 10 months time. This way those effected will have time to breed more goats and start generating income in a more sustainable way. We will follow the developments closely in the hope that we can continue to use the Sunna micro loans to help in the wake of disaster relief in the region.

Here are three of the borrowers receiving their checks.

Fundraising dinner in Reykjavik

We had the honor to present the sunna project to a full house of dinner guests at Friends of India in Iceland last weekend – the crowd of 40-50 people were super impressed by the work being done on the ground in India and during the dinner we collected donations that will go towards increasing the fund size! Thank you dear Friends of India 🙏

Workshop and year-end celebration!

On 16 December 2018 we conducted a team leader workshop with all the team leaders in Ramanathapuram. The objective of the workshop was to go through the progress to date, reflect, celebrate milestones and plan for the future.

48361486_10161212436370035_2391682053792858112_oHip hip hurray! What a great group!
48367566_10161212437280035_7377606341000429568_oWe handed out 15 certificates of achievement

Some of the key take-aways:

“These loans have a truly positive spin and allow the borrowers grow with dignity

“The best thing about the loans are the BIG SMILES on the borrowers face each time we meet

“What makes the program unique is that the interest rate is the lowest available and the process is very easy and simple

“Most microlending projects are only open to women – the Sunna program does not discriminate based on gender even if 90% of the loans are in fact to females”

“We can offer an affordable life insurance as part of the program – in case of death of borrower we will waive the remaining repayments”

How self-employment can be the road to freedom

A microloan is not always “just” about increasing income and being lifted out of poverty. For some borrowers the loan is also a boost of confidence and a way to become independent and free.

This is especially true for the sub-group of borrowers that have been rescued from debt bondage. Debt bondage has been described by the United Nations as a form of “modern day slavery”.*

One of the team leaders in the Sunna Program runs a rehabilitation center for people that have been rescued from such a situation. The rehabilitation program includes providing basic needs like temporary food and shelter, rebuilding self-confidence and training up skills to work on something new. Once the training program ends the individuals get assistant finding a job or make the necessary investments to become self-employed. This is where the Sunna loans come into the picture as many of these borrowers manage to buy a sewing machine or rope making machine and this way become self-sufficient and independent for the first time in their lives.

It might sound contradictory that micro finance is a way out for someone that has such terrible experience from bad debt. However, if done in a responsible, fair and transparent way a loan can have very positive effects on the borrower’s life. This is way we keep the interest rates very low and the loan terms ultra simple to make sure the borrowers can easily understand how it works: You get 10,000rs and repay 1,050rs per month for the next 10 months. This means you repay a total of 10,500rs and are debt free again within one year. The team leaders also provide support and advise to the borrowers to help them invest the money in a way that creates enough cash flow in order to repay on time without any problems.

As part of the impact assessment we collect feedback from the borrowers and it is very encouraging to read all the positive comments about improved livelihood, peace of mind, increased confidence and ability to meet unexpected medical bills. This supports what the numbers indicate and suggests that the impact is positive on some many levels!


* Debt bondage is defined on Wikipedia as “the pledge of a person’s services as security for the repayment for a debt or other obligation, where the terms of the repayment are not clearly or reasonably stated, and the person who is holding the debt and thus has some control over the laborer, does not intend to ever admit that the debt has been repaid. The services required to repay the debt may be undefined, and the services’ duration may be undefined, thus allowing the person supposedly owed the debt to demand services indefinitely. Debt bondage can be passed on from generation to generation.


We made it – 3 months ahead of target!

As some of you might recall we set the goal of reaching 400 micro loans before end of the year 2018. It is with pride and pleasure that we announce that this milestone has been reached already this month – 3 months ahead of schedule!

This has only been possible thanks to the generous donors that have helped expand the capital of the Sunna Microloan Fund AND the amazing team leaders on the ground in India. The team leaders help identify and recommend borrowers to the program and without them the project would be impossible to execute!

We are on track to give out at least 60 more loans before the end of this year and repayments are still 100%. Due to long waiting lists and high demand for more loans we are assessing possibilities to increase the program size even further for 2019 so stay tuned for further updates!

Pictures of some the team leaders that attended the kick-off workshop in December 2016


Got milk?

One of the most common question that we get about the microfinance program is: what do the borrowers do with the money they borrow?

The borrowers are highly resourceful and smart people so we don’t tell them what to do but rather coach them on how they should think about the opportunity they are being given. Some of those important principles are:

  1. We make it clear that getting a loan will not automatically make you rich… it often also takes hard work in the short term but can really change ones life in the long run.
  2. It is important to invest the money borrowed on something that generates income. Taking out a loan for one off consumption will only make matters worse if one is already in an economically challenging situation.
  3. The income generated needs to be sufficient to be able to repay the loan AND keep some profit that is larger than what one would have been able to produce without the loan.
  4. Stick to something you know already – often the most successful borrowers are those that use the loan to scale up a small business they are already running or start a business with the help of someone experienced in the community – too much innovation can be risky business.

Going back to the original question the most common usage of the money paid out has been to buy animals and sell the milk. Actually, this has been what about 1 in 4 borrowers decides to do. The borrowers have so far bought quite a number of goats, several cows and even a buffalo or two. This seems to be a great way to improve one’s life as the monthly income generated is more than enough to repay the loan in 10 months as planned. After the loan is repaid the monthly income is significantly boosted for years – as long as the animal lives and is well taken care off.

Photos by Thorarinn Hjartarson who visited some of the borrowers earlier this month