When the pandemic struck and forced a nation-wide lockdown, it decimated thousands of small businesses across India. Gripped by uncertainty, and burdened with the costs of rent and inventory, many small businesses struggled to survive. As an immediate response to support the Jamat’s financial needs, the Ismailia Co-operative Credit Society Limited, Hyderabad (ICCS), launched a new series of financial products, offering a much-needed financial lifeline to the Jamat during this time.

“We had to act”, said Noormohammed Gilani, President of the ICCS, Hyderabad. “Banks had become risk averse and we knew that a large part of our Jamat was being deprived of much-needed credit. Leveraging our knowledge-based lending model, we worked in collaboration with the Council and AKEPB India to support the Jamat at this unprecedented time.”

This support took the form of three types of loans ranging from INR 40k to INR 100k to INR 300k. The first two, called Umeed and Asha, were designed to be simple loans with easy documentation requirements that could help families sustain their financial needs and business expenses during the lockdown. The larger loans, called Hope Loans, were introduced to help businesses sustain themselves beyond the lockdown. Given the larger loan size, Hope Loans were accompanied by individual counselling sessions with the borrower to provide insights on how the loan could be used to reposition the business.

But the lifeline went well beyond financial support. In consultation with the Council, the Board of Directors  of the ICCS also worked with many small businesses to help renegotiate their rentals, either bringing them down by up to 50 percent or even negotiating no rental payments for two to three months as small businesses were shut and struggled with cash. When businesses began to reopen, the ICCS visited many of its clients, providing valuable advice on protocols for reopening safely and information on new strategies that could help them to better manage stock purchases and liquidity.

The results were soon evident: with financial support from the ICCS, Jamati bakeries in Hyderabad were among the first to recover. Approximately 60 to 70 percent of bakeries were able to revive between 80 to 90 percent of their business. Now, in the post-lockdown period, the ICCS continues to review loan applications, supporting requests for top ups based on the borrower’s repayment history. In their recent Board Meeting in October, the Board also proposed bringing in a professional advisor to assist Jamati businesses with advice on restructuring, growing their business, and pivoting successfully, post pandemic.

Since the pandemic struck, the Hyderabad ICCS has provided an abundance of financial support to the Jamat, providing stability, comfort, and certainty in these unprecedented times. More importantly, adequate safeguards and controls have been established to protect the institution’s own financial health and liquidity at this time. A robust appraisal mechanism, a collaborative approach in partnership with the Council and AKEPB India and adequate provisioning norms, have all made sure that the ICCS retains its financial strength, which in turn allows it to serve the Jamat.

In the midst of the pandemic and the financial crisis that followed, the Hyderabad ICCS is a shining example of how business and financial support, in collaboration with the Jamati institutions, can support the Jamat’s hopes and aspirations, even in these times.