Background:With Financial Inclusion emerging as a major policy component in the country, microfinance through its inclusive financial services is seen as one of promising tools to reach out to the unbanked populations. Delivered mainly through the MFI channel andwith its focus on financial and social aspects; microfinance contributes significantly to expand financial inclusion by offering need based financial services including micro credit, micro insurance and pension services etc to poor clients. Over the years microfinance has progressed well in the country.

The state of Odisha has emerged as a potential microfinance market in the eastern region of the country and projected a rich diversity of microfinance models, practices, tools and products etc.The role of MFIs in providing the financial services for the poor has been quite encouraging, especially in terms of their outreach and service delivery at the door steps of the members. Having adopted various client friendly methodologies including SHG and JLG, microfinance has been able to reach out to a large section of people, particularly women members in the state. As reported >50 institutions including NBFCs & NBFC-MFIs work in Odisha and offer financial services-micro credit and micro insurance services etc to the low income group of people. As per MFIN Report, MFIs collectively cover all the districts in Odisha; reach out to about 35.88 Lakh women borrowers, with loans of Rs. 13,391.02 crores in Odisha as on March 2020.

Odisha State Association of Financial Inclusion Institutions (OSAFII): With a view to better coordinate with all stakeholders in the state and strengthen the inclusive finance sector in Odisha, the MFIs together promoted an association called Odisha State Association of Financial Inclusion Institutions (OSAFII).It operates as a coordinating body/organization of various institutions that promote financial inclusion in the state by offering inclusive financial services to poor. It was registered as a Trust in the year 2016. The core intent of the association is to provide a common platform for all the stakeholders of the state to share their experiences and facilitate better coordination among them. It works for strengthening the inclusive finance sector in Odisha by addressing the state specific issues and challenges. OSAFII also helps strengthen the capacity of its members on various thematic areas including on responsible finance, code of conduct and client protection principles etc. OSAFII operates with the following key priorities and program focus:

Key Priorities and Program Focus of OSAFII

1. Networking & Coordination: To coordinate and build collaborative efforts among all stakeholders for strengthening further the financial inclusion sector in Odisha.
2. Capacity Building of Members & Stakeholders: To design and offer customized technical assistance including demand-based trainings for member MFIs & other stakeholders.
3. Promote Industry Standards & Best Practices: To encourage and educate member organizations and help them proactively practice the Responsible Finance, SRO principles & SPM processes in their respective microfinance programs.
4. Policy Advocacy: To take up policy and other issue-based advocacy with Government, policy makers and regulators for strengthening further the enabling environment in the state.
5. Knowledge Management: To ensure regular collation of web based and other relevant information on financial inclusion and microfinance and dissemination that with members and stakeholders.

Governance & Management:As an association, OSAFII is being managed by its own governance system. The General Body is constituted with the participation of each member organization/MFI, represented by the head of institutions. The Board of Directors/Trustees is consisted of seven founding members. The Board meets every quarter, deliberates on various agendas and issues concerning to the microfinance sector and takes collective decisions on that. A Chief Executive Officer (CEO) has been recruited by the association and assigned with coordinating OSAFII programs in close collaborations with members and other stakeholders.

Key Stakeholders:TheSmall Industrial Development Bank of India (SIDBI) has been one of the key stakeholders of OSAFII since its inception. SIDBI through its Poorest States Inclusive Growth (PSIG) Programme has extended financial assistance through ACCESS-ASSIST to form and strengthen OSAFII. After its registration as a Trust, OSAFII entered into a Grant Agreement with SIDBI-PSIG for financial support which helped it substantially to undertake various sector building as well as capacity building initiatives in the state. In addition to SIDBI-PSIG, OSAFII also closely works with other key stakeholders in the state including the RO-RBI, NABARD, SLBC, Banks, BCs, and Government line Departments, especially Directorate of Institutional Finance, NRLM/OLM, WCD-Mission Shakti, NULM/SUDA, etc.

Members of OSAFII: OSAFII is a member-based entity. As mentioned above, initially all seven home grown organizations such as Adhikar Microfinance Pvt Ltd, Annapurna Microfinance Pvt Ltd, GU Financial Services Pvt Ltd, Sambandh Finserve Pvt Ltd, Mahashakti Foundation, Swayamshree Microcredit Services and Swayanshree Mahila Samabaya Ltd came together and formed the association in Odisha. Gradually other national level organizations operating in Odisha (18) joined the association. Increased memberships and their contribution give OSAFII an institutional footing, mandate and legitimacy to work in the state.

Currently OSAFII has got 25 Members including 21 NBFCs&NBFC-MFIs in Odisha. Its membership has been increasing year by year. Its members are dedicated to achieving the double bottom line i.e. social and financial development of the poor. Apart from providing micro credit-small business loans, micro insurance services etc, they also undertake various credit plus and welfare activities including on health and hygiene, water and sanitation, education, solar light, rural housing, enterprise promotion,relief and rehabilitation etc. In the post-cyclone (FANI) period last year, OSAFII members undertook relief and rehabilitation activities, worth of Rs. >5 crore for the affected people in addition to contributing Rs.31.11 lakhs to Chief Minister Relief Funds in Odisha.
Key Activities undertaken by OSAFII:Since its inception, OSAFII has been undertaking various sector and capacity building activities for the members and stakeholders in the state. Internally it organizes Board & Members’ Coordination meetings on regular/quarterly basis and General Body Meeting, at least once in a year.

As part of its sector building initiatives OSAFII organized four mega events including 03 state level Financial Inclusion Conclaves and 01 SHG Convention so far. The SHG Convention was attended by > 1000 women SHG/JLG members from across all the districts in Odisha. Representatives and Delegates from Govt line Depts, RO-RBI, NABARD, SIDBI, SLBC, Banks, NBFC-MFIs & NBFCs, SFB & Payment Banks, BCs, NGOs, CBOs, Cooperatives, SRO, Academic & Training & Research Organizations etc also attended the events and deliberated on various critical issues related to financial inclusion, financial services for poor, women empowerment, livelihoods promotion etc. OSAFII also brought out two important documents such as Compendium of Clients’ Success Stories and Odisha Inclusive Finance Status Report-2020 and got that released during these events by the Dignitaries.

With a view to enhance further the understanding, knowledge and skills of staff from member organizations and stakeholders, OSAFII conducted a series of thematic training programmes including on Code of Conduct, Social Performance Management, Clients’ Protection Principles , Risk Management, Responsible Finance, Gender Diversity, Leadership, Enterprise Promotion etc. Individual Experts and Resource Persons from reputed institutions were invited to facilitate these training programmes. Around 500 staffs working at various levels in their respective organizations were trained by OSAFII. It also organized District level coordination meetings in order to have better convergence among stakeholders for expanding financial inclusion in the state. Similarly, the association also facilitatedperiodical interactions with various media houses/Journalists and police personnel in the state.

OSAFII envisages for transforming itself as a potential state actor in financial inclusion domain of state and for that it seeks cooperation from various institutions,partners and support organizations to achieve universal financial inclusion goal in the state/country.