Susheelma, an illiterate daily wage worker, and her husband were struggling to make ends meet. She wanted to be self-employed, but banks and money-lenders refused to lend without collateral.

Microfinance came to her aid and her life changed.

A loan of Rs 4,000 helped her set up a tea stall, which provides her with an income of Rs 6,000 per month.

Susheelma is among the 1,000-odd people who have benefitted from the urban microfinance initiative undertaken by the Maxwealth Trust. The Trust is a sister organisation of the Alfa Foundation, the NGO arm of the Institute of Chartered Financial Analysts of India.

"The idea behind this initiative is to help parents of the children studying at the Alfa Foundation-run ICFAI Republic Schools located in the urban slum areas, convert their skills into business ventures and earn a decent living. Parents of more than 95 per cent of these children are rickshaw-pullers, ayahs (maids), helpers in small garages and fabrication units, vegetable vendors and daily wage earners. We extend financial assistance and help them invest in new revenue-generating projects," said NJ Yasaswy, member, Board of Governors of the ICFAI.

The Trust provides around Rs 6,000 to each individual. The amount is repayable at installmets of Rs 125 a week. After a year, it increases the amount to Rs 8,000 per individual.

The Trust has drawn up some guidelines for the beneficiaries. A grouping of 10 members each is mandatory and they are required to maintain some savings in their accounts for at least a month.

"This is to maximise cooperation, increase accountability and inculcate discipline among the group members," Yasaswy said.

He said the Trust's field staff visit the groups once a week to ensure that the funds extended are solely used for business activities.

"We provide microfinance facility to the economically weak individuals in and around the Fathenagar slum area in Hyderabad and have done some case studies on how this benefited the slum dwellers. These show that the income levels of each of these people have gone up by Rs 1,000 to Rs 1,200 per month. The most gratifying thing is that there are no defaults," he said.

Buoyed by this, Yasaswy said the Trust was planning to take this concept beyond Hyderabad and introduce it in other places where the IRSs are located.

"Last year, we disbursed microfinance to the tune of Rs 1 crore, and we plan to increase this to Rs 5 crore this year," he added.

ICFAI's NGO arm Alfa Foundation is planning to start 1,000 more IRSs across the country in the next 15 years, with greater concentration on Kolkata.

The foundation currently runs several IRSs in the country -- two at Fathenagar and Balanagar in Hyderabad and one each at the Santhoshpur slum area in Kolkata and Bangalore -- with a total student strength of over 2,000.