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Shg as BC UP-22-6-152 V2

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Shg as BC UP-22-6-152 V2

  1. 1. Case Studies from Unnao - Uttar Pradesh SHG Members as Bank Agents german cooperation DEUTSCHE ZUSAMMENARBEIT National Bank For Agriculture And Rural Development Taking Rural India >> Forward
  2. 2. 2 Published By Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Rural Financial Institutions Programme Contact Dr. Detlev Holloh, GIZ Programme Director A-2/18, Safdarjung Enclave New Delhi 110 029 / INDIA Phone: +91-11-4949 5353 Telefax: +91-11-4949 5393 Email: detIev.holloh@giz.de Homepage: www.giz.de Responsible Amit Arora Authors Abhishek Lahiri Neetu Bansal Yachna Srivastava Support Team Neeraj Pokhriyal Mandeep Singh Editor Nitin Jindal Design Anshul Sharma/Artworkstudios.in New Delhi, June 2015
  3. 3. 3 F inancial Inclusion initiatives in India focus on bringing unbanked population of the country into the fold of mainstream, formal financial services. Despite several innovative models and pilots to provide doorstep banking, some challenges remain unaddressed. The Business Corre- spondent (BC) model has been on an evolving journey globally with mixed success. In India the BC story started as a part of Govt. of In- dia’s formal policy in 2006. Sourcing BC agents (CSP- Customer Service Points) locally who command trust among the villagers and combating their high attrition rate have been constant pain points. Since early 1990s NABARD as the apex agriculture and rural development Bank, has nurtured and grown the SHG (self-help group) movement as an informal mode of encouraging and inculcating habit of savings among women. Today 73 lacs plus SHGs across the country have proven that these women are a valuable human resource network who can be leveraged by formal fi- nancial institutions by acting as extended arm of banks or as BC agents. The GIZ-NABARD Rural Financial Institutions Pro- gramme (RFIP) initiated a pilot project in the state of Uttar Pradesh in May 2013 to find synergy between SHG networks and Financial Inclusion. Today, select- ed members of SHGs who are called as ‘Bank Sakhis’, armed with capacity building training and project man- agement support from the RFIP provide banking ser- vices to their clients at their doorstep on behalf of the partner bank. Bank Sakhis provide basic banking services like Basic Savings Bank Deposit Account (BSBDA) enrolment, funds transfer, Recurring Deposit (RD), Fixed Deposit (FD), solar home lighting system loan etc. Bank Sakhis also facilitate all kinds of SHG-based banking transac- tions by dual authentication application in the Micro- ATM itself. This allows the Bank Sakhis to do all the financial transactions of the group (from members to group and from Group to members) at the village itself without going to the bank branch. These Bank Sakhis have broken the glass ceiling and have proven to be trustworthy locally available human resource pool for the bank. We have tried to capture some of the success stories from the field in the form of case studies. Each story explains the journey of these Bank Sakhis, the chal- lenges faced by them and the impact made in their lives by this transition from a SHG member to a Bank agent. The objective of these case studies is to share the in- sights from the lives of these Bank Sakhis and learnings from this project with all stakeholders engaged in the Financial Inclusion ecosystem. We have also included a case study of the Bank Manager which clearly demon- strates the role of these Bank Sakhis in easing the day to day operations of the bank branch. We have also shared success stories on client satisfac- tion, and how the Bank Branch is benefiting from these Bank Sakhis. Bank Sakhis have been able to perform better on mul- tiple indicators as compared to other conventional BC agents of the Bank. Percentage of dormant accounts is less than 8% opened by the Bank Sakhis as compared to close to 60% dormancy in bank accounts opened by the conventional BC agent of the same bank. Similar- ly, average quarterly balance per bank (Jan-Mar 2015) account of clients enrolled by Bank Sakhis is INR 271 as compared to INR 78 balance per bank account by conventional BC agents. Our experiences show that the clients relate to and trust these Bank Sakhis well, as they are members of existing SHGs in their villages. Women who are first time users of banking facilities come without any hesitation to these Bank Sakhis for opening and operating Bank accounts. This clearly indicates that a strong business case can be built by the Banks based on this Bank Sakhi (SHG members as Bank Sakhi) model. Introduction
  4. 4. 4 Bank Sakhi helps SHGs graduate to Micro-ATM based transactions It was in November 2009, that RGMVP staff first visited her village and tried to mobilize the community to form Self- Help Groups. Rajkumari who was already aware of SHG concept was quite instrumental in the formation of groups in her village. Rajkumari as Bank Sakhi Her life took a tremendous turn for better once she got introduced to the GIZ-NABARD RFIP (Rural Financial In- stitutions Programme) project team as a potential Bank Sakhi for ‘’SHG members as Bank agent project” (Bank Hu- mare Gaon). It was hard to believe then that one day she will be running a small banking outlet in her village which is a reality today and an inspirational success story. It all started in August 2013 when she took induction train- ing as a Bank agent. This was followed by an introductory visit by the Branch Manager of Gramin Bank of Aryavrat, Ucchgaon. Since then Rajkumari has never looked back. Starting off with 331 banking transactions a month in No- vember 2013, she achieved 2,240 transactions totalling over Rs 5.5 Lacs in March 2015. Though during trainings, she was only taught how to do individual transactions and individual fund transfers but she extrapolated that if ac- count to account fund transfer was possible, then the same could be applied to SHG transactions also. Therefore in October 2014, she convinced her SHG members to save in their individual accounts and then transfer the amount to group account through fund transfer. Once this was suc- cessful, she further replicated the same in other four SHGs of her Gram Panchayat. Rajkumari narrates her experience of SHG transactions through Micro-ATM - “Hume to laga ki jaise koi jadu ki chadi mil gayi ho” (“I felt like as if I got a magic-wand”). This Micro-ATM did turned out to be a magic-wand which solved their major problem of going to the bank every month for depositing their collective savings and repayment instalments. The tedious task of walking 5 kilometres to Ucchgaon, waiting in queues Name of Bank Sakhi: Rajkumari Devi Age: 35 years Education: 8th pass Husband’s profession: Agriculture Village: Kodrabhagat Kheda, in Sum- erpur block of Unnao district, Uttar Pradesh. Figure 1: Status of transaction count of Rajkumari since start till 31st Mar 2015 Figure 2: Income growth chart of Rajkumari since start till March 2015
  5. 5. 5 for hours and losing out on whole day has been con- verted to just touch of one button “fund transfer”. It not only increased the number of transactions of Rajkumari but also promoted SHG members to save more and reg- ularly in their respective individual accounts. Successful fund transfer of savings of SHG members to the group account was a big milestone which convinced the RFIP team to look deeper at the backend data which indeed reflected increase in number of fund transfers es- pecially in meagre amounts of Rs.10/- per week or Rs.50/- per month coming from SHG members. Backed by this initial success, it was only recently in Febru- ary 2015 that the bank integrated a ‘dual authentication’ application in the Micro-ATM (backed by financial assis- tance from the NABARD) which allowed debits(including fund transfer) from SHG accounts to comply with the need of joint signatures/authorization required to debit SHGs account. Since then, the number of transactions have been increasing considerably. It has been just 2 months since the launch of dual authentication application in the Micro- ATM, thus providing debit facility to SHG members from SHG account as well as savings deposit account, but these initial results are still worth sharing. Rajkumari shares, “Pahle loan ki kisht, bank jaane ke inte- zaar mai ghar mai kharch ho jaati thi aur ab kisht ikathaa hote hi SHG ke sadasya aakar jama kar dete hain” (“Earlier loan instalments used to get spent in household expenses in the process of waiting to go to the bank but nowadays, SHG members deposit it as soon as it is collected.”) Figure 3: Percentage composition of SHG transactions out of total transactions in March 2015 Rajkumari doing transaction for one of her customers using Micro-ATM
  6. 6. 6 There has been a substantial increase in the income of Rajkumari. She started with a monthly earning of Rs. 414 (She gets Rs1.25/ financial transaction) but it picked up in December 2013 due to opening of new ac- counts on which she earned Rs.5 per account opened. In initial days, major part of her income came from enrol- ment drives but once it got saturated, she focused more on commission from transactions. In the process to increase her income through transac- tion commissions, she started doing SHG transactions at SHG meetings. Minimum 11 transactions used to be done in just one meeting through fund transfer which also in- creased once the dual authentication application got in- stalled in the micro-ATM. As per figure 2, we can see that Rajkumari has been earn- ing average income of Rs. 1816 per month. It was for the month of April 2015, data was analyzed and found that (Figure 3) 20% of total transactions of Rajkumari are from SHG transactions which involve savings of members, fund transfer as well as withdrawals while 1% is just withdrawal/ debits through dual authentication transaction since this facility has been introduced very recently only. At present, Rajkumari has 72 SHG clients out of which 47 are now using Rajkumari recording acknowledgment of transaction from her customer their bank account for SHG transactions. It is from 47 SHG clients, she is doing minimum 188 transactions per month but if rest of the SHG members also use their bank account, Rajkumari has the potential to do minimum 288 transac- tions per month providing incremental transactional rev- enue. She has further potential to increase this income also, if the inter lending within the group increases. It’s is found that earlier SHG members used to hesitate in going to bank and withdrawing money as it involved investment of both time and money but now, since this facility is within the village itself, it is assumed that members will use their SHG funds more for inter lending purpose which will not only increase their SHG corpus with incoming interest but also increase transactions of Bank Sakhi. Bank Sakhis like Rajkumari have proved that banking is not a rocket science. With sincerity, hard-work and dedi- cation, they are ready to play a crucial role in financial inclusion efforts. SHG-Micro-ATM integration has already started add- ing feathers in the caps of Bank Sakhis. The transactions happening from the village are motivating both dormant groups as well as non-SHG members to organize them- selves as SHGs.
  7. 7. 7 From a homemaker to village banker Seema first joined a Self-help Group (SHG) in 2011 and later on became the Village Organisation (VO) represent- ative from her SHG. In 2013, she was selected as a Bank Sakhi but she got her Micro-ATM (Hand Held Device) only in January 2014.Till then she kept helping other Bank Sakhi in the enrolment process. Initially she faced lot of problems in convincing people to do transactions through the micro-ATM machine but with lot of efforts from her, they started doing it. In fact people used to deposit money and immediately go to bank and check it in their account.However,once the trust got estab- lished, villagers gained confidence on transacting through Micro-ATM. Now she has customers from all age groups i.e. from school-children to old men and women. She says “pahle log gullak mein paisa dalte the par ab seedha bank mein dal dete hai” (Earlier people used to save in cash box/ piggybank but now they directly save in Bank). There are customers who now receive money from their near and dear in different cities like Ratlam, Delhi and Ludhiana. There are beneficiaries of Samajwadi Pension Scheme who get their money directly from micro-ATM as well as beneficiaries of Janani Suraksha Yojna who get their cheques cleared through the Bank Sakhi and are able to withdraw money at the village itself using the BC channel manned by Seema Devi. Seema started with a transaction count of 337 in the month of January 2014 which grew to 1,187 by March 2015. She started depositing collective savings of SHG through the “fund transfer facility” in December 2014 which increased her transactions from 317 to 705 per month. It again increased once the dual authentication facility was launched in month of February 2015 which led to increase in transactions from 756 to 1,187 in Mar’2015. This has already prompted members to do their group transactions from their respective bank accounts in view of greater convenience and transparency due to such facility of fund transfer option and dual authentication fa- cility to debit group’s bank account in the village itself. Seema Devi operating her Micro-ATM Name: Seema Devi Age: 33 yrs. Education: Post Graduate Husband’s profession: Grocery shop owner Location: Kesrikheda, Sumerpur block in Unnao district, Uttar Pradesh Figure 1: Status of monthly transaction count of Seema Devi
  8. 8. 8 SHG-BC integration using Micro ATM has resolved a ma- jor problem of SHG members and office bearers of walking 5 kilometres to the bank, waiting in queues and tussling with bank officials. It also resolved most of the conflicts among SHG members for going to bank as no one enjoyed this visit. She says, “Pahle bank jaane ke naam par ladai hoti thi, koi bhi apna pura din barbad nahi karna chahta tha, par ab machine se len den hone se asaan ho gaya” (Earlier there used to be fight among SHG members for going to the bank as nobody wanted to waste their whole day but now this has become easy because transactions have started happening on the machine). There has been considerable increase in the income of See- ma. Initially she earned mostly from the enrolment process but later on as the transaction count increased and enrol- ments got saturated, her income has been coming mostly from transactions. It is also observed clearly in figure 2, that from March 2014 the enrolments slowed down and transaction count started picking up. Though there has been a dip in her income from Sep- tember 2014 to December 2014 but as the SHG transactions started, it again increased from Rs. 396 in the month of December to Rs. 1,381 in January 2015 and it kept rising to Rs. 1,984 in month of March 2015. The average income of Seema has been Rs. 967 per month. The data for month of April 2015 was analyzed and it has been found that Seema has done 636 transactions in April, out of which 9% of it is SHG transactions which involve savings of SHG members, their withdrawals as well as re- payment to the group and withdrawal/debits from SHG accounts through dual authentication application. There are 43 SHG members in Kesri Kheda who have bank ac- counts while only 27 are using it for SHG transaction. At present, minimum 54 transactions have been done but if all 43 members use it actively, the transaction count will be just double. At present, though transaction revenue is very low, Seema is earning minimum Rs.160 for SHG transac- tions per month from 27 SHG clients who use their savings bank accounts in SHG meeting but if other members also start using their savings bank account, she has the poten- tial to earn minimum Rs.240 per month from SHG transac- tions. There is also further potential of increase in transac- tion, if inter lending within the SHGs increases. Seema has got a new identity in her village as “banker didi” and she is quite proud of it. The role of Bank Sakhi for See- ma has given a direction to her life, to contribute in the progress of her community and village. She has not only earned respect but is now considered to be a role model for other women of the villages. Though it is too early to comprehend the impact of Micro- ATM on SHG members but it is quite visible that, it will lead to digitization of SHG financial transactions and will add a different dimension to the ongoing SHG movement, without frequent visits to the Bank! Figure 2: Income growth in Seema Devi since start till March 2015 Figure 3: Percentage composition of SHG transactions out of total transactions in month of April 2015  
  9. 9. 9 A Bank Sakhi doing an SHG transaction
  10. 10. 10 Bank Sakhi breaks social barriers Financial empowerment along with social empowerment Sakhi’s profile Uma Devi, 39 years old, mother of four kids, belongs to a high caste Brahmin family. Coming from a small fam- ily, she was not able to adjust to a large joint family after her marriage and she left her house because of increased work pressure. However, on being persuaded by her family and getting support from her parents-in-law, she returned back to her husband’s family. She herself tells this story and explains how things have changed as she learnt how to Uma Devi in a Block Level Association Meeting as a Bank Sakhi in her village Jagatpur “Jo mahila kal tak pallu ke bina kisi se baat nahi karti thi, aaj wahi Bank Manager aur Gram Pradhan ke bagal mein kursi pe baithti hai. Bank mein jaate hain to log kursi khali kar dete hain. Kehte hain – aap baithiye. Sab Namaste karte hain. Bachche bhi jaante hain chachi ke paas khata khulta hai” – “The lady that never used to speak in front of anybody without a veil, now sits alongside the Bank Manager and village representative on a chair. People offer her their chair to sit when she goes to the bank. Every- body greets her. Even children knows that this aunty opens bank accounts”, says proud Uma Devi on her new role as a Bank Sakhi.
  11. 11. 11 handle bigger responsibilities. Her husband is a farmer and earns hardly enough to take care of the expenses of raising four kids (three of them are girls). One of her daughters got recently married in January, 2015. Her journey as a Sakhi After 18 years of being a housewife, Uma Devi joined an SHG promoted by Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP). As she was fairly educated, she was made the treasurer of the SHG and so, she started visiting bank to do the financial transactions for the SHG. She got in touch with the Branch Manager of Gramin Bank of Aryavart and got to know about the “SHG as a BC” project and expressed her interest in joining the same. She was found suitable as per the eligibility criteria and was appointed as a Banking Correspondent (BC) agent. Her fellow SHG members also extended full support for her selection as she is very hard working. She has been a very good performer ever since. She has opened 624 accounts by April 2015 and has done transactions amounting to over Rs. 2.24 million. This is higher than the average enrolment of 393 done by other CSPs of the bank and even higher than overall average fig- ure of 449 by all Bank Sakhis. She serves four villages in her Gram Panchayat and on an average, does more than 500 transactions in a month. This is higher than the average of 372 transactions done by other CSPs of the bank and even higher than overall avg. figure of 386 by all Bank Sakhis till date. Earlier, it took a lot of convincing for people to open accounts but now be- cause of her efforts and word-of-mouth publicity, people know her and come to her for opening not just their own accounts, but of all their family members. The challenge: caste barriers Casteism is a major problem in her Gram Panchayat. Peo- ple have very conservative thinking and still believe in the traditional caste system. About 50% people of her village belong to Scheduled Castes. Coming from a place where so-called lower caste people are not even supposed to come in front of others, Uma Devi never hesitated in trans- acting with the so-called lower caste people, even though Uma Devi with Naziya Bano and other customers Customers’ Testimonials “Inka Kaam bhi achchha hai, swabhav bhi achchha hai. Koi chhoot-achhoot ka vichar nahi hai. Raat beraat zaroorat pade to phone kar dete hain, ye machine leke aa jati hain, Manager thodi na aate hain!” – “Her work and nature are very good. She never thinks about caste. If we need banking services even in odd hours, we just call her; she comes at our doorstep with her machine. No Bank Manager will do that”, -Naziya Bano, a Muslim customer of Uma Devi. “Chahe gareeb ho chahe ameer ho, apne bara- bar samajhti hain. Kauno unch-neech ka vichar nahi” “She considers poor and rich equal. There is no discrimination”-Pyarelal, another so- called lower caste customer of Uma Devi. “Bahar jaate hain to saas poochti hai kitna leke ja rahi ho, chachi ghar aake le jati hain to koi kuch nahi poochta”- If we go out to deposit money, mother-in-law asks how much are you taking with you. Sakhi comes at home, so no- body asks anything”, says one of her customers.
  12. 12. 12 her husband and family did not approve of the same in the beginning. She faced a lot of problem in convincing her own family to provide banking services to them. Despite the social difference, Uma Devi facilitated account opening for them by going against the social norms. She convinced her family about the importance of her work and how she is instrumental in changing the lives of the so-called low caste poor people. Because of all her hard work, she is now able to break the age old barriers between the so-called lower and upper castes. New changed set-up People from the so-called lower castes now come to her house any time of the day and she also visits them for con- ducting banking transactions. With continued efforts, she has been able to win the support of not just her family members, but also her customers. This work has changed her image in the family. She is now considered to be a very knowledgeable family member and no major decision is taken in her house without consulting her. Her family members seriously consider her opinion before taking any important decision. What helped Uma Devi bring this change? She feels being a woman she is in a better position to do this job as she does not hesitate to visit people at their home. People also trust women more as they feel that women will not run away with their money. She feels this account is a great help to villagers who have to spend both money and time to visit bank branch for small value transactions. She is especially a big help to women who cannot save as they are not allowed to go out of the house. “Uma Devi bahut hi confident mahila hain. Unka koi kaam atak jaye to haath ke haath phone karke keh deti hain theek karwao. Jaise ki POS machine mein koi problem aayi, to turant Anwar sahab ko phone kar deti hain. Manch pe jake bolna hai ki hamari ye samasya hai, to koi aur nahi bol pata, ye bol deti hain. Pehli CSP thi jo seedhe laptop taang ke nikal padi Enrolment karne”– “Uma Devi is a very confident woman. If any of her work gets stuck, she straightaway calls and asks it to be straightened out. If it is to be said on a platform about any problem they are facing then nobody else can do it except her. She was the first CSP who hung the laptop on her shoulder and went out to do enrolment”, says her supervisor Rajneesh. Uma Devi is very happy playing the role of a Bank Sakhi. She feels proud that she can provide banking services to people who are not able to manage a regular bank account. Also, she has become a catalyst in promoting savings hab- it in villagers. In addition to the social service, she is also able to generate a monthly income and receives timely payment for her services which helps her manage her household expenses. To know more about Uma Devi’s journey as a Bank Sakhi, please see the video at http://www.aryavart-rrb.com/financial_inclusion.html
  13. 13. 13 From ignominy to popularity Journey of a Bank Sakhi’s empowerment Sakhi’s profile Bindeshwari got married in 2007, but she stayed at her par- ents’ place for another 2 years to finish her education. She was always a very good student and her teachers used to tell her that one day, she would do something great. She completed her Bachelor of Arts in 2009 but was not able to do anything meaningful after that. She then gave birth to her first child in 2011 and started remaining busy with household work. On and off, she would help her husband Balram in his business but even then, there wasn’t much to do. Bindeshwari later joined a Self Help Group (SHG) under Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP) for saving some money. Tough journey as a Sakhi When she heard about the ‘SHG as a BC’ project, she got very excited. She thought that this was an opportunity to use her knowledge and education for the betterment of her “Ye sochte the ke bas yeh hi sab kuch hain, aur main kuch nahi kar sakti. Ab inko bhi samajh aata hai ki hum kandhe se kandha mila kar inke sath chal sakte hain. Is kaam ke baad poore pa- riwar ka mere liye swabhav hi badal gaya hai”- “My husband used to think that I cannot do anything. Now he has realised that I am capable and can support him to manage household expenses. After becoming a Sakhi, behaviour of entire family has positively changed for me,” says Bindeshwari Bindeshwari with her husband in her village Gobraha in Sumerpur block of Unnao District
  14. 14. 14 society and to prove her real worth. Though Balram and his family did not approve of this much as they felt that this is not a stable job, Bindeshwari had taken a decision for herself and there was no looking back. But still family sup- port was lacking which pinched Bindeshwari a lot. Once, a government scheme was announced, to avail the benefits of which the villagers needed to have bank accounts. So, the local Bank Manager told Balram that he should let his wife work as Bank’s BC agent to help the fellow villagers in this as she is an educated lady. This made him feel proud of his wife and changed his attitude towards her work. Af- ter that he started supporting her. Bindeswari is currently earning an average amount of Rs 2,426/- per month which has made her family’s life very comfortable. This is higher than the average commission figure of Rs. 1,442 earned by all CSPs other than Bank Sakhis of the bank. Earlier there were no such earnings and maximum portion of the income used to be spent for meeting daily household expenses. Bindeshwari has opened RDs for her husband and for herself. All the family members are now insured and save a handsome amount monthly. Bindeshwari adds, “Pehle kuch bachta hi nahi tha, jo aata tha wo pati ke busi- ness or ghar ke kharcho me hi chala jaata tha. Par Bank Sakhi banne ke baad humne bachat ki aadat daali hai or is se humko bahut surakshit mehsus hota hai.”- “Earlier there used to be no saving at all, whatever we used to earn was spent on my husband’s business or household expenses. But after becoming a Bank Sakhi we have inculcated a habit of saving and this makes us feel very secure”. All this has solidified their relation. Bindeshwari feels she is an em- powered woman now. It was not an easy task though. Initially Bindeshwari was hesitant to meet people. Like other women in her village, she also used to cover her face. When she had to distrib- ute cards to her customers, she had to ask others for help. Gradually, she gained confidence. Now, after finishing her household chores, Bindeshwari leaves her daughter with her family and sets off on her bicycle to help people with- draw and deposit small amounts at their doorsteps. Now, more than 46% of her customers are active account users. This is significantly higher than the average active account usage of only 7% of client base enrolled by all CSPs other than Bank Sakhis of the bank as on March 2015. Recently, she also won the first prize for achieving the maximum number of unique customer transactions. She receives very good feedback from the villagers. According to her female customers, upon becoming a Bank Sakhi she was able to convince people to inculcate a saving habit. Women are more hesitant to come out of their homes. Villagers appre- ciate that a woman is supporting them in livelihood activi- ties. The Branch Manager of Gramin Bank of Aryavart also tries to help her in her endeavours. Her vision and dreams She feels sad that so many men in her village spend all their income on alcohol, leaving their wives with little or no money to run the house. When these women try to de- posit some money in bank, they are even beaten up by their husbands. Also, there are many widows and old people for whom it’s not easy to open and maintain a bank account. One day, Bindeshwari hopes she would be able to address all these issues through empowering these people by open- ing their bank accounts as savings can be their best protec- tion. She wants the turnaround time in account opening to be shorter and better service. It’s still a battle to win, but Bindeshwari is confident that she can now do anything. “Ab humara aatmavishwas bahut badh gaya hai, koi kaam karne mein sankoch nahi hota, kahin bhi jane ke liye boliye, hum tayar rehte hai. Yeh sab is naye project ki wajah se ho paya hai”- “Now my confidence has increased tremendously and I am not afraid to do anything. You ask me to go anywhere and I am ready. All this is because of this new project.” - says a confident Bindeshwari Bindeshwari starts her daily trip for serving customers in neighbouring villages
  15. 15. 15 Bank Sakhi promotes savings Inculcating savings habit among tiny tots Sakhi’s profile: from tailoring to banking Krishna Devi is a 45 year old lady staying in a small village called Mubarakpur in Sumerpur block in the state of Ut- tar Pradesh. She lives with her husband and four children. When she first heard about ‘SHG as BC’ project, she did not believe it to be true “Bank ka kaam koi mamuli kaam nahi hai jo ghar baithe hi kiya ja sake. Aisa kabhi dekha suna nahi, aisa laga, zaroor kuch gadbad hai” – “Banking is not an ordinary work that can be done sitting at home. Had never seen or heard any- thing like this, so I thought that there is something fishy about this concept”, says Krishna Devi. “Log humse poochte hain ‘kya milta hai?’ Hum kehte hain kamaai bhi hoti hai aur izzat bhi milti hai. Hum Lodhi hain, par Thakur bhi samman dete hain!” – “People ask me, what do you get as re- muneration? I tell them that I earn some money along with a lot of respect. I belong to a so-called lower caste but even the so-called higher caste people give me a lot of respect now”, says Krishna Devi. “Bada beta to bahut khush hai. Kehta hai ‘Mummy Manager ban gayi hain.” – “My elder son is extremely happy. He says that I have now become a bank manager”, says Krishna Devi. Kids throng Krishna Devi’s desk to make savings
  16. 16. 16 Excellent performance But then she learnt more about the project from the lo- cal bank branch and started working as a Bank Sakhi with a lot of enthusiasm. She joined the ‘SHG as BC’ project in August, 2013. Since then, she has opened 750 savings bank account till 30th April 2015, which is more than 50% of the total population in her Gram Panchayat (1376, as per Cen- sus 2011). This is higher than average enrolment of 393 by all other CSPs (other than Bank Sakhis) of the same bank. She has also done over 16,000 transactions of savings bank account holder till April 2015. On an average, Krishna Devi has conducted 1,124 transactions/month in last six month till April 2015. She tries to spend as much time as possible to visit all the villages in her allocated area so that she can provide doorstep service to the people. She is now the primary bread earner in her family and her husband and kids support her in this work as well. Earlier her husband used to be the only bread earner and used to earn Rs. 1,500-2,000/- monthly. As a Bank Sakhi, she earns an average of INR 2,416 per month. This is higher than the overall average commission of INR 1,560 made by all the Bank Sakhis in last one year. This is also higher than aver- age commission of INR 1,442 of all other CSPs (other than Bank Sakhis) of the bank since Bank Sakhi project incep- tion. Even though she used to earn a living from tailoring before this but she finds the Bank Sakhi job much better as it gives her extra income and a lot of prestige. She feels like a mobile bank manager and the respect she commands in her family and village has increased. Sakhi’s impact on village’s financial behaviour Krishna Devi is happy that she is able to provide so many services to her fellow villagers. People have a lot of faith in her and look at her as a one-stop shop for all their financial needs. People in her village now have bank accounts which are so convenient to operate. With so much migration, par- ents and families of the migrants can now receive remit- tances in their accounts instantly. Children in her village have started saving their pocket money rather than spending it on junk food. They also buy books and pay their fees from savings made from this ac- count. This account is playing a very important role in in- culcating savings habit at a very Out of 750 savings Bank accounts opened in her Gram Panchayat, Krishna Devi has enrolled 130 kids in the age bracket of 10-14 yrs. and 58 children in the age bracket of 14-17 yrs. With 25% of her customer base being children, she is surely popular amongst kids! “Bachche jo dukaan bhagte the paisa milte hi, ab poochte hain – ‘Chachi machine kab shuru karogi? Paise jama karne hain’ Mela laga hai par bachche paisa yahan jama kar rahe hain”- “Children who used to run to shops when they had money, now ask her to deposit their money in bank ac- count. There is a fair in the village but children are saving with her rather than spending all the money”, says Krishna Multiple services offered Krishna Devi is also actively engaged in Business Facilita- tion activities on behalf of the bank: she offers Solar Home Lighting Solution loans as well as Kisan Credit Cards, she opens Recurring Deposit accounts and she distributes non- performing asset notices to customers. Through this she has helped the bank to recover loans worth Rs. 2.5 lakhs. She feels proud that she is playing a vital role in improving the lives of so many people. She feels that getting into this profession was one of the best decisions of her life. A so- called low caste tailor woman now acts as the local bank official for the village and also commands a lot of respect from high caste people in the village. Krishna Devi believes that this facility has great potential and her future is very bright. She will soon be very successful and known in her surrounding villages as well. Krishna Devi doing transaction for a senior citizen in his house
  17. 17. 17 SHGs as Business Correspondents Changing the traditional style of banking! Bank Manager’s profile Mr. Ramanuja Verma is the Branch Manager of Unchgaon branch of Gramin Bank of Aryavart in Unnao district of the state of Uttar Pradesh. He is one of those progressive bank- ers who believe that new alternative delivery channels can change the face of traditional banking and get more and more unbanked people under the banking fold. He is man- aging this bank branch for last three and a half years and is respected in the neighbouring villages. He narrates the journey of this new model with a lot of passion. He believes Branch Manager, Ramanuja Verma, outside his Unchgaon branch “Har garib ka khata, har garib ko fayda” “Ab ghar mein log bakse mein paise nahi rakhte.”- “Every poor’s account is every poor’s benefit. Now peo- ple do not keep money in boxes”, says Ramanuja. that this is a boon for him as it makes him feel good about providing services to more and more people while keeping the footfalls in the branch at a low level. It also gives him and his staff extra time to think about new products that can be offered for the betterment of the villages. He details out with great enthusiasm, the following advantages of this new model: “Har garib ka khata, har garib ko fayda” “Ab ghar mein log bakse mein paise nahi rakhte.”- “Every poor’s account is every poor’s benefit. Now people do not keep money in boxes”, says Ramanuja.
  18. 18. 18 Decongestion of branch Earlier, his branch was always very crowded as people had to visit the branch for every petty issue. Now, there are 11 Bank Sakhis associated with his branch and people first go to them. Only if something remains unresolved do they come to the bank. Earlier, illiterate people, sick people and people who had to deposit/withdraw small amounts, could not do so because it took a lot of time and energy. But the account opened with Bank Sakhi is helpful for all –villagers now have access to so many services at their doorstep, bank has fewer footfalls and can therefore focus on other impor- tant things and it provides a source of livelihood to Bank Sakhi. Overall impact on the branch business has been pos- itive so far. With the help of Bank Sakhis, savings (low cost deposits) worth Rs. 50 lakhs have been mobilised through all savings accounts since May 2013 and nearly 90,000 transactions worth Rs. 1.5 crores have happened through these 11 Bank Sakhis linked to the branch of Mr Ramanuja in the same period. Earlier, more than 150 vouchers used to be filled each day at the branch on an average. But now it has gone down significantly to 90-100 vouchers a day. Since many customers are now able to avail basic banking services, particularly small transactions, through the Bank Sakhi, they need not go to the branch. If someone wants to do a high value transaction (more than Rs 10,000/-), then only s/he needs to go to the bank branch. “Koi 100 rupay nikalne aata tha, koi 200. Jo bada customer hota tha, wo wait karta reh jata tha”- “Somebody used to come to withdraw Rs. 100, someone else 200; and my pre- mium customers would have to wait,” says Ramanuja. Increased focus on loans, cross-selling and premium customers Mr. Verma says that because of so much work at branch earlier, not much attention could be given to other im- portant things like credit expansion or credit monitor- ing. He was left with very little time to spread awareness about various products offered by his bank, go to the field for survey, do background check on loan applica- tions etc. But with doorstep banking service for the cus- tomers, there are fewer customers to service at the bank and bank staff can focus on their premium customers who do high ticket size transactions. The Sakhis have also supported the bank to make its prod- ucts popular. They have started doing Business Facilitation work like encouraging people to take Solar Home Lighting System (SHLS) loan, open Recurring Deposit (RD) accounts, pay off loans on time and avail of Kisan Credit Cards (KCCs). Earlier, many villagers were not even aware of such facili- ties available at bank.The accounts opened with Bank Sakhi also provide an option to customers to receive various gov- ernment payments like wages of MGNREGA, pensions etc. in these accounts. It also facilitates customers to receive remittances directly in their accounts. The customers, with minimal documentation, can avail of overdraft facility up to Rs.10,000/- with the help of Bank Sakhis. Recovery of Non- Performing Assets (NPAs) has also considerably improved because of Sakhis’ support in delivering delinquency no- tices to defaulting customers’ residences. More number of customers While earlier only 10-12 accounts could be opened in a month, now about 6,000 savings bank accounts have been opened through Bank Sakhis between May 2013 and March 2015. This growth can be completely attributed to the support provided by this new delivery channel.Also the number of female customers is rapidly increasing.The male female ratio of clients enrolled by Bank Sakhis is 55:45 as against the bank average of 62:38 before the start of Bank Sakhi project. Also, he is getting a lot of children as his cus- tomers, which he says would support financial inclusion in a real sense in the longer term. Stress free work environment Earlier Mr. Verma used to lose track of time, after entering the bank. He would not remember when it was long past the lunch time and when it was time to go home. People would hover around him throughout the day. It used to make him sad to see old and sick people linger around the bank, waiting for their turn. Also, his staff was not happy with the workload. Now, everybody feels less stressed and they greet their customers with more happiness and energy. “4-5 baj jate the shaam ke, pata hi nahi chalta tha lunch time nikal gaya. Ab thoda saans lene ki fursat
  19. 19. 19 milti hai.” – “Every day I had to skip lunch because of workload, now I get some time to breathe,” says Ramanuja. Bank Sakhis act as his additional support Mr. Verma feels that women are better at savings than men. They also have better convincing ability and when given responsibility, they are more accountable. He says that Bank Sakhis appointed under this project are very hardworking and committed to their work. They are very sincere and perform their duty with enthusiasm. In case they need clarity on something, they approach him and he is more than happy to help them. It is like he has got extra The Bank Sakhis have helped the Bank branch to achieve the following numbers as of 30th April, 2015 in addition to the 6, 000 Savings bank account opened and being serviced: ◗ 141 RD Accounts (Sep’14-Mar’15) ◗ 37 SHLS Loans ◗ 77 KCC/GCC by 7 Bank Sakhis ◗ 102  NPA recovery notices issued to account holders (by Bank Sakhis) ◗ 8 FD and OD accounts Overall experience Mr. Verma feels that working at the bank is both interest- ing and challenging at the same time. His position com- mands respect from society, but it has also feel put a great responsibility on his shoulders. Now, with the ‘SHG as BC’ project, this responsibility is being largely shared by Bank Sakhis who are playing the role of a catalyst in all the major functions of a bank – savings, credit, remittances and G2P payments. He feels that going ahead, all the banks should adopt a similar model as this is the only way government can achieve complete financial inclusion.
  20. 20. 20 Government to Person (G2P) payments at the doorstep Customer profile ‘A penny saved is a penny earned,’ this quote can be aptly applied to Pyarelal who is a daily wage labourer in Nan- mau village in Sumerpur block of Uttar Pradesh. He and his wife have 5 children. They both work as wage labour- ers and spend what they earn to meet their daily expenses. They belong to a Scheduled Caste and live in a small house while their parents live with Pyarelal’s brother in the near- by house. Not so good experience with previous bank account Pyarelal has an account in the Unchgaon branch of Gramin Bank of Aryavart, where he used to receive payments under Pyarelal with his family, outside his hut
  21. 21. 21 NREGA (National Rural Employment Guarantee Act). He used this account for withdrawing his NREGA payments and also to deposit small savings. But in order to do so, he had to spend almost a day which proved to be very costly because of the opportunity cost involved. Introduction to Bank Sakhi He came to know about banking at doorstep service through Uma Devi, the Bank Sakhi in his village. She con- vinced him to open a bank account with her. Since he has opened an account with her, he prefers using this account over his other bank account as it gives him a lot of flex- ibility. This account can be used 24x7 unlike regular bank accounts which can be operated only on weekdays and that too within specific hours. He says that this account can also be used to withdraw during festivals and other holidays as the Bank Sakhi stays in the same village. He tells proud- ly that he was able to save only Rs. 600/- in his previous bank account in last 2-3 years, but he managed to save Rs. 1,800/- in this new account in just 1 year. He says that now he understands the importance of saving small amounts at a regular frequency. NREGA payments made easy Now, Pyarelal is also getting his NREGA payments in this account. He used to withdraw the entire amount received under NREGA wages from his previous account, but now he withdraws as per his need and maintains some balance in his account as he knows that it is now very easy to make a withdrawal through the Bank Sakhi. As he has a big family, money is never enough. So he could not deposit much in his bank account but with the Sakhi, he makes it a point to deposit regularly, even if the amount is small. After all, it’s not how much you earn, but how much you save that counts! “Pehle to NREGA ka poora paisa ek sath nikal leta tha, kuchh to kharcha zyada tha aur kuch bank se nikalne ka kasht. Ab is naye khate mein bahut aaram hai, jab jitna man karta hai, nikal leta hoon, bachat karna bhi bahut assan hai. Agar ye suvidhaa pehle hoti to meri bachat bhi zyadaa hoti”- “Earlier, I used to withdraw the entire NREGA wages as my expenses were high and also withdrawing money from bank was painful. But this new doorstep service is very convenient. I withdraw in small amounts as needed. Saving is very easy in this new account. If this facility was available earlier, I would have a bigger corpus of savings,” says Pyarelal. Pyarelal doing transaction with Bank Sakhi
  22. 22. 22 Doorstep delivery of remittances lead to a lot of savings Customer profile Rama Devi is a mother of four but for the last 17 years, she has been living in her village, Kodrabakt Kheda with her youngest son and only daughter. Her husband and other two sons are working in Mumbai as daily wage labourers. She expresses her inability to live with her family in Mum- bai as the cost of living and education there is very high and she also has to look after her small piece of land. Besides taking care of her small plot, Rama Devi also works as a labourer in others’ lands to augment her income. Her family in Mumbai send her money as and when they have some savings. Earlier, they used to send money through other villagers coming back from Mumbai. It used to take many days for Rama Devi to receive this money and it was not very safe also.Therefore, for meeting immediate needs, she sometimes had to take short term loan from other vil- lagers or the local goldsmith at interest rates as high as 10% per month! Her previous banking experience She also has a bank account in which she used to receive her payments under the National Rural Employment Guar- Rama Devi standing outside her house
  23. 23. 23 antee Act (NREGA). But she says that it was a nightmare to withdraw money from that account as she is not literate and had to depend on others to fill her withdrawal form and wait for long hours for her turn. Even after waiting in the queue, if there was any mistake in the form, the teller would make her go through the entire process again. In order to visit the bank branch, she also had to forgo a day’s earning as well as spend money on transport. This is the reason, she was scared to save and transact at the lo- cal bank branch. She preferred saving at home so that she could have easy access to cash. Introduction to Bank Sakhi She came to know about this new doorstep banking ser- vice through Bank Sakhi Rajkumari as they are distant rela- tives. When others in her village started opening accounts through Rajkumari, she also followed them. Her family in Mumbai now send her money in this account, which is now received the same day. Rama Devi now feels very happy and relaxed as she does not have to worry about any emergen- cy for money as the Sakhi stays in the vicinity and there is no hesitation in interacting with her. She can now pay for her expenses on time and does not need to borrow money from anybody. She does not need to keep money at home either. This account not only provides interest on her sav- ings but is also saving a lot of money which she was un- necessarily paying as interest on short term loans taken to meet her emergency needs. Rama Devi finds it easy to discuss her queries regarding banking facilities with the village Bank Sakhi i.e. Rajkumari as she is easily approachable, available and a female SHG member from her village only. Rama Devi does not find it difficult to interact with a female bank agent and feels mo- tivated, convenient and comfortable to avail banking ser- vices from her even at odd hours. Inculcating savings habit in kids Her kids have opened their own accounts too and instead of spending their pocket money, they prefer saving in this account for future use. She is extremely happy as her chil- Rama Devi with her youngest son and cattle “Line lagaye raho. Mil jaye to mil jaye, nahi to lage lage bank band hi ho jaye! 2-3 baar laut aana pada. Bahut akadte the sahab, zara sa galat ho jaye to. Hum kehte hum to padhe nahi. To adhikari kehte – To hum toka padhai den kya!” – “Keep standing in the queue; if you are lucky you will get it else the bank will close for the day. I had to return 2-3 times from the branch without doing the transaction. The officer used to behave very arrogantly, if there was any mistake in the bank withdrawal form. I used to say that I am not educated and the of- ficer would say, ‘Now do I have to teach you?’” - Rama Devi on her experience with operating bank account in the neighbouring bank branch dren are also learning the importance of savings at a very young age, which she says will help them throughout their life. With a smile on her face, she says that the Bank Sakhi is a “panacea for all her problems”.
  24. 24. 24 A Bank Sakhi doing enrolments and transac- tions using her Micro-ATM. Seema Devi tallying her cash balance and updating transaction register at day-end KYC! Rajkumari seems to know her customers well
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