NABARD
Committed to Rural Prosperity


                   Dr.B.S.Suran
                   General Manager
                ...
Bank network for rural credit
                                                                             June 2002
NABAR...
The Dilemma of ….. The                              Inverted Pyramid
NABARD




                                          ...
Findings from Research studies …..
NABARD        …… in the 1980s
            Savings and credit products did not suit the...
NABARD      The Self Help Group (SHG). . What is it ?
     A homogeneous group of about 15 to 20
     Every member to sa...
NABARD
           Design features
           Enables exclusion of rich
           Self-selection
            Self-
     ...
landmarks
NABARD
                              YEARWISE SHGs CREDIT LINKED News letter
                                   ...
NABARD
                     Stages of YEARWISE SHGs CREDIT LINKED Programme
                                SHG Bank Linka...
NABARD
                 The Product converges…..

     FORMAL and INFORMAL
      Systems
     FINANCE Capital and SOCIAL...
NABARD        SHG-Bank Linkage … Progress
                    As at…… Mar 93        Mar 96     Mar 04      Mar 2009

  • S...
NABARD
            Building social capital..

                                NGOs
                                       ...
Commitment building thru capacity building …
NABARD




                                      Stakeholders
               ...
Our manpower building approaches …
NABARD




   Bankers
    6 different training and exposure programmes for CEOs,
    D...
NABARD
          What was the impact ?…..contd…
    Infrastructure building                 microFinance            Income...
NABARD and microFinance
NABARD



         INFLUENCING               INVOLVING               ENCOURAGING
            POLIC...
NABARD

         Other initiatives
          Grain banks and SHGs
         Computer munshi
         IT integration with pr...
Our simple strategy . . . . . .
NABARD




        Continue to invest in development of Human Capital
        Strengthen...
Thank you


         NABARD
Committed to Rural Prosperity

 For more details log on to
     www.nabard.org
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NABARD and microFinance

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some facts of how SHG_bank LInkage programme started in India

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NABARD and microFinance

  1. 1. NABARD Committed to Rural Prosperity Dr.B.S.Suran General Manager NABARD, Ahmedabad
  2. 2. Bank network for rural credit June 2002 NABARD Reserve Bank of India Government of India NABARD Public Sector Private Foreign Banks (27) RRBs (196) Banks (31) Banks (41) TOTAL Rural 19,275 12,060 1,138 0 32,473 Semi-urban 10,903 2,037 1,761 2 14,703 Urban 8,737 359 1,322 20 10,438 Metro 7,203 17 1,155 180 8,555 Total 46,118 14,473 5,376 202 66,169 + the cooperative banks , about 92,000 Primary agri. Credit Societies “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  3. 3. The Dilemma of ….. The Inverted Pyramid NABARD Banks Rural population  Large Banking infrastructure, enhanced outreach in rural areas , 70 million small loans, pro-poor policies, subventions, programmes and intentions like directing credit to the rural areas, large resource base of banks, good manpower and sound control systems…….  ….BUT …the Debt and investment surveys revealed skewness in credit flow, declining household debt from non- institutional agencies still formed a sizable measure. The search for reasons and the mismatches started….in the 1980s “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  4. 4. Findings from Research studies ….. NABARD …… in the 1980s  Savings and credit products did not suit the needs of the poor  Procedures were complicated and cumbersome  High transaction costs for the poor and the delivery system  System did not provide for anything to fall back on  Even special poverty alleviation programmes did not recognise importance of savings  Resources handled were often larger than the poor’s capacity to handle  “Others” decided everything So we were looking for… the POOR just wanted…. Or just Sustainable approaches •Mechanism to keep their limited Hassle-free Products that match resources safely financial Needs & capacities • Credit to meet emergencies services Reduce trans costs • Credit for mEs “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  5. 5. NABARD The Self Help Group (SHG). . What is it ?  A homogeneous group of about 15 to 20  Every member to save a small amount regularly. Pooled savings kept in a savings bank account in SHG’s name transaction costs of both the poor and bank reduced !  SHG to use pooled thrift to give interest bearing loans to members – decisions taken in group meetings Every member learns prioritisation and financial discipline. Their capacities to think and handle larger resources improves!  Depending on the SHG’s maturity, bank gives loan to the SHG as a multiple of the pooled savings. Bank loan added to the SHG kitty. Adequate & sustained access to financial services! “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  6. 6. NABARD Design features  Enables exclusion of rich  Self-selection Self-  Focus on women  Saving first and credit later  Intra group appraisal systems and prioritization:  Credit rationing  Shorter repayment terms  Market rates of interest  Progressive lending  Multi-eyed operation Multi- “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  7. 7. landmarks NABARD YEARWISE SHGs CREDIT LINKED News letter Distance Edn Tech.. 10 Other New Fund 200000 SHPIs Banks 150000 Working as SHPI Group 100000 Reorienting Vision Training + TF Separate Fund 50000 Pilot 0 Rating, 1 2 3 4 5 6 7 8 Documentation, 9 10 YEARS “WE MAKE BANKING POSSIBLE WITH THE Recg, THE LOST AND THE LEAST” Govt . LAST Training
  8. 8. NABARD Stages of YEARWISE SHGs CREDIT LINKED Programme SHG Bank Linkage 200000 Growth & Expansion 150000 100000 Mainstreaming Introduction and Validation 50000 0 1 2 3 4 5 6 7 8 9 10 YEARS “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  9. 9. NABARD The Product converges…..  FORMAL and INFORMAL Systems  FINANCE Capital and SOCIAL Capital  Systems & procedures and FLEXIBILITY  PROFESSIONALISM and Local Knowledge An Indianised Product – Researched, Tested, Piloted, Grown, Expanded, ……….. and Now A MOVEMENT………. “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  10. 10. NABARD SHG-Bank Linkage … Progress As at…… Mar 93 Mar 96 Mar 04 Mar 2009 • SHGs linked 255 4,757 10,79,000 42.24 lakh • % women’s groups 70 74 90 82 • Families assisted 5,100 80,000 16.7 Million 59.10 Mil • Banks participating 14 95 560 570+ • NGO Partners 32 127 3000 3400+ • Districts covered 26 157 564 564 • Aggregate bank loans 1.5 6.2 3901 22,679 (o/s) handled (Rs Crore) • NABARD Refinance (Rs crore) 2124 4,200(app) “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  11. 11. NABARD Building social capital.. NGOs Banks Socially committed SHPIs individuals Government Farmers’ clubs functionaries Mobilizing Communities ….. “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  12. 12. Commitment building thru capacity building … NABARD Stakeholders Cadre of Trg centre trainers Partnership IGNOU Training Training partnership Approaches consultation Dissemination TNA of materials Designing Trg modules “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  13. 13. Our manpower building approaches … NABARD  Bankers 6 different training and exposure programmes for CEOs, Directors on Boards, middle management, branch managers, field staff  NGOs 3 different training and exposure programmes for CEOs and field staff, Refresher programmes  Govt officials 3 different training and exposure programmes for senior bureaucrats, middle level operational functionaries, and field staff  Trainers 3 different programmes to equip trainers from Banks, Government, and NGOs. “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  14. 14. NABARD What was the impact ?…..contd… Infrastructure building microFinance Income Generation (physical, social & community assets (Savings and credit) (Encouragement and advice) Emergency Prevention Banker friendly Leveraging Govt contracts- (recurring natural calamities) market/recovery/image hatts/ quarrying/fish pond/ milestone/ health related Peace Social Evil Eradication (Interfaith, (Alcohol abuse, inter-caste tolerance Self-Help spousal abuse, and conflict resolution) Initiatives excessive dowry, Undesirable social practices gender space,) Watershed Management Education (Water users groups, (School for children, Civil Society infrastructure maintenance, (Women members adult literacy. run for elected office) share practices) Peer education ) “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  15. 15. NABARD and microFinance NABARD INFLUENCING INVOLVING ENCOURAGING POLICY INSTITUTIONS INNOVATIONS MOTIVATING CREDIT SUPPORT PARTNERS NABARD TECHNICAL COORDINATION SUPPORT WITH PARTNERS GROUP GROUP FORMATION TRAINING AND LINKAGE CAPACITY BUILDING “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  16. 16. NABARD Other initiatives Grain banks and SHGs Computer munshi IT integration with processor cards Rural Volunteers are book keepers Project on e-grama Social Security system for SHGs Other Credit models – JLGs /Raithu Mitra Groups “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  17. 17. Our simple strategy . . . . . . NABARD  Continue to invest in development of Human Capital  Strengthen outreach in infrastructurally weak areas  Intensify diverse training and sensitization approaches  Selectively meet costs of SHG promotion by different SHG promoting institutions  Address post-finance management issues of banks  Integrate IT in mF systems – enhancing efficiency !!  Diffuse learnings and share good practices  Contain supply side anxieties “WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
  18. 18. Thank you NABARD Committed to Rural Prosperity For more details log on to www.nabard.org

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