The evolution of the microcredit programme of the OPP’s Orangi Charitable Trust, Karachi

This paper describes how the microcredit programme of the Orangi Charitable Trust expanded and developed through supporting the capacity of local organizations to set up and manage credit programmes. It describes the Trust’s evolution from supporting producer and consumer cooperatives, to providing microcredit to small entrepreneurs in Orangi (one of the 18 towns in Karachi city district with around 1.4 million inhabitants), to microcredit in rural areas and other urban centres through 86 partner organizations. By 2010, 39,704 loans worth US$ 7.8 million had been provided in Orangi for small private schools (as government schools are not available), manufacturing units, traders, service providers, building component manufacturing yards and clinics. The Trust had also supported 117,115 loans worth US$ 18 million through partner organizations outside Orangi. Eighty-five per cent of loan repayments are made on time. The Trust and its partners have found that by keeping procedures and products simple and transparent, by supporting staff in partner organizations through learning-by-doing and by recruiting local staff, contact with potential borrowers and loan recovery have been made easier. Those who have taken out loans and those who are interested in loans meet often to discuss progress and difficulties. Initially, partner organizations require financial support, but within two years most generate sufficient funds to cover their overheads. The paper also discusses the new opportunities that the microcredit programmes have provided for women.