Through a cross-border financial relationship, Citibank India will provide a loan of Rs 3.5 crore to SPARC and the Rajiv-Indira Cooperative Housing Society, a member of National Slum Dweller's Federation (NSDF). SPARC works closely with NSDF and Mahila Milan -- two people's organisations. Developed by SPARC and Citibank's employee volunteers, this loan is structured against a lien on sales proceeds from the saleable area of the project and partly against cash collateral.

``The project will go a long way in promoting self reliance among the residents of Dharavi. By working with an NGO, we want to go beyond mere cheque-book philanthropy by educating the economically challenged. We can impart them knowledgeabout the things we know -- helping them with computerisation, financial skills and savings management,'' says T S Anil, Assistant Vice President, Citibank India.

Citibank supports projects benefiting the community across the world. The projects chosen depend on the requirements of the particular markets.

``Broadly, we have earmarked three areas of social responsibility to follow up in the country -- income generation, women welfare and self-reliance. We partner one or two NGOs in each city, claims Anil. SPARC, NSDF and Mahila Milan now have the institutional capacity to manage construction, obtain loans and undertake projects. The loan presents a viable option for communities and NGOs to come together and manage the rehabilitation process. ``This process is not just about pulling people out of huts and putting them into tenements, it also makes for communities to be active participants in their own rehabilitation,'' claims Anil.

The project is being developed under the Slum Rehabilitation Scheme ofthe Maharashtra Government by the Rajiv-Indira Cooperative Housing Society. The requisite approvals for the project have been obtained by SPARC, which will manage both the construction and the development activity. Work has begun on the project, with Rs 70 lakh already invested in SPARC's resources, which will be refinanced by Citibank.

Homeless International will deposit 100,000 in an account with Citibank, London. This will part guarantee the loan. The deposit that will secure the loan has been provided by Airways Charitable Trust. Citibank in turn, will advance a loan to SPARC and Rajiv-Indira Co-operative Housing Society to help them implement the project. The loan has a tenure of 30 months maturing in October 2001.

``The loan is being disbursed along the requirements of the fund. The payment will be made to the Rajiv-Indira Cooperative Housing Society over 18 months. The amount of Rs 3.5 crore will be spread in chunks of Rs 30-40 lakh every quarter. Repayment is payment of interest for the first 12months and a quarterly payback of the principal amount after that,'' says Anil.

The idea for a joint financing venture was conceptualised almost an year back. Citibank had been working with SPARK for various projects before that, who in turn has been working in the field for the past five years. The joint venture was finally announced in the first week of this month when Ruth Mcleod, CEO of Homeless International, another SPARK partner, was visiting Mumbai.

Going beyond funding the bank will help the slum residents by playing an active role the monitoring and construction of the project. It will also impart our expertise in cash flow management required and technical enterprise.

The design for the apartment-style dwellings has been finalised and the plans approved. ``But unlike slums, which generally have only one floor, the apartment building will have four floors and each unit size will have a carpet area of 225 sq feet. More floors mean less congestion in the dwellings,'' feels Anil.

Elaboratingon the terms of repayment and the possibility of flexible terms for the slum residents, Anil says the bank did not want it to be pure philanthropy. ``We are not treating it as a profit-making venture. But all three partners want the project to work like a commercial venture. The project is not scaleable if the the terms of repayment are too relaxed. Such rehabilitation projects will only be replicable when they work in commercial terms. Of course, the rate of interest is much below Citibank's prime rate. It is definitely cheaper finance. We are working on quarterly monitoring of the implementation. This way Citibank will be wearing two hats, those of a lender and a partner,'' he concludes.