A Micro Finance Institution can be a trust, registered society, cooperative society, Company registered under Section 25 of Companies Act, 1956 (not-for-profit Company), NBFC or local area bank (LAB).
finance for ngo activities in ngo consultancy
The vast majority of Micro Finance Institutions in India are trusts and societies. Conversion into an NBFC or LAB gives an MBI greater credibility as it brings the Micro Finance Institution under the purview of Reserve Bank of India. Besides, being a corporate entity enables a Micro Finance Institution to access the capital markets for funds to scale up and not depend solely on bank lending, grants or donations. They are also allowed to raise savings from the member borrowers. Applying for trust and society registration can leave a positive impact and authority of your esteemed organization.
Leaders and managers of NGOs have to develop, at the very least, basic skills in financial management.
Expecting others in the organization to manage finances is clearly asking for trouble. Basic skills in financial management start in the critical areas of cash management and bookkeeping, which should be carried out following certain financial controls to ensure integrity in the bookkeeping process.
New leaders and managers should swiftly learn how to generate financial statements (from bookkeeping journals) and analyze those statements so as to develop a real understanding of the financial condition of the organization.
Financial analysis shows the ‘reality’ of the situation of a Ngo organization and as such, is one of the most important practices in management. This guide will provide you with an understanding of common practice in financial management, and help you to build the basic systems and practices needed in a healthy organization. You can take guidance from ngo consultancy.
Most NGOs have experienced at least one and perhaps all of these side-effects of traditional project grants, and many donors recognize the limitations of their own strategies.
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There are of course many positive aspects to project grant funds: they are usually noninvasive, in that the donor does not interfere in the day-to-day management decisions of the NGO; the money is “safe”, in that it does not have to be repaid (unless it was not used for the agreed purpose); the selection procedures are normally transparent; and they provide crucial financial support for program activities.
However, there is a need to develop or promote alternative support mechanisms that can overcome some of these identified limitations. Developing such a support mechanism must address the two limitations mentioned earlier: quantity and quality of NGO financing sources.
