Branch Service Area Profiling<br />Sanjay Nagar<br />Study Conducted by MI Team<br /> - Ram Jayakumar, WM<br /> - Gopalakrishnan, WM<br />
Contents<br />Objective and Approach<br />Data Sources<br />Service Area Profile<br />Infrastructure<br />Financial<br />Educational<br />Health<br />Economic Activities<br />
Objective and Approach<br />Objectives<br />To understand and estimate the size of the economic and financial system of the branch service area <br />To profile the branch service area in terms of various businesses, income generating activities and their existing channels. <br />
Data overview<br /><ul><li>Structured Interviews - 20
Financial Infrastructure<br />Within the service area<br />Credit Co-operative Society - Sanjaynagar<br />Post office<br />Self-help groups<br />Money lenders <br />LIC agents<br />MFI-GramaVidiyal<br />Near service area*<br />Nationalized banks <br />SBI, Indian Bank, Indian Overseas Bank, Syndicate Bank, Repco Bank <br />Private finance companies<br />India Bulls, Muthoot Finance, Shriram chits, KumbakonamParasparaNithi<br />Western Union<br />*Distance - Located at Pattukottai which is about 6km from the branch<br />
Credit Co-operative Society<br />Distance from KGFS branch – 0.5 kms<br />Total number of members – 1200<br />Interesting product feature for crop loans<br />No interest charged on loans if repaid within 8 months<br />If the loan extends beyond 8 months then, interest rate of 12.5% applied on declining balance from day of disbursement<br />Average loan sizes<br />Crop loan – Rs 25,000<br />Jewel loan – Rs 20,000<br />Fertilizer loan – Rs 10,000<br />Total Loan Portfolio – Rs. 260 lakhs<br />
Self Help Groups<br />Active groups - 80<br />Members per group - 20<br />Savings<br />Compulsory monthly savings – Rs 100<br />Total savings – Rs 19 Lakhs per annum<br />Total estimated balance – Rs 51 Lakhs<br />Average balance per customer – Rs 3120<br />Loans<br />Average loan size per group – Rs 70,000<br />Total Portfolio – 56 lakhs<br />Interest rate to members – 24% p.a. diminishing<br />Duration 2 years<br />
Post Office<br />Situated in Aladikumulai (1 km from the branch)<br />Approx 50 money orders received per month with an average remittance of Rs 5,000<br />Total savings and Fixed deposits – 1.38 lakhs<br />
Banks and Other Financial Institutions<br />Commercial Banks (SBI, Indian Bank, Indian Overseas Bank, Syndicate Bank, Repco Bank)<br />Education loan, Tractor loan, Home loan, Savings & Remittances currently availed by people from the service area<br />Around 20 people from Sanjay Nagar have a banking relationship with banks<br />Other Financial Institutions (India Bulls, Muthoot Finance, Shriram chits, KumbakonamParasparaNithi)<br />Most branches in Pattukottai and operate through agents<br />Products - Tractor loans, Home loans and Education loan.<br />Average tractor loan is Rs. 2 lakhs, home loan is of 3 lakhs and education loan of Rs. 2.5 lakhs.<br />Interest rate is 16%+ flat p.a.<br />
Money Lenders<br />Five money lenders in service area, another 12 in nearby villages<br />Estimated number of borrowers - 300<br />Interest rates – 3% to 6% flat a month<br />Ticket size – Rs 2,000 to Rs 5,000<br />Duration – 3 to 24 months<br />MFIs<br /><ul><li>GramaVidiyal has a branch in Pattukottai and operates through their field officers
Follows Grameen model; formed 20 groups with 20 members each
Average loan size is Rs. 7000 to be repaid in one year and they charge an interest rate of 28% diminishing p.a.</li></li></ul><li>Insurance Market<br />Mostly endowment policies sold<br />Average premium per annum – Rs 1,500<br />Total premium collected by agents – Rs 12 lakhs<br />Maturity period – 15 years<br />Expected pay-off after 15 years – 2 lakhs<br />
Summary of Estimated Financial Market<br />*All figures in Rs. Lakhs<br />*All figures are approximate<br />
Educational Infrastructure<br /><ul><li>There are no public high schools in the service area and people have to travel to Pattukottai / Karambayam if they have to enroll in the public school</li></li></ul><li>Health Infrastructure<br />PHC<br /><ul><li>PHC in Enathi that caters to the entire service area.
1 doctor from Pattukottai and 2 nurses</li></ul>Pharmaceutical store<br /><ul><li>Pharmaceutical store in the service area in Aladikumulai.
Pharmacist prescribes medicines for minor ailments
Average medicine sales Rs. 400/day.</li></ul>Veterinary Hospital<br /><ul><li>Veterinary hospital in Enathi catering to the entire service area.
Treatment provided free of cost </li></li></ul><li>Economic Activities<br />
Income Generating Activities<br />For around 78% of the households primary source of income is agriculture<br />Around 7% of the households depend on remittances from abroad<br />
Agriculture<br />Agriculture is the major income generating activity with more than 70% of the population involved directly or indirectly in agriculture.<br /><ul><li>People have moved from paddy to coconut as it is less labor intensive
MGNREGS pays Rs.100/day for relatively less work compared to hard work in the fields
All lands are irrigated through wells and some get canal water.
Other crops like Cocoa have found people’s attention and a few farmers have started experimenting with it.</li></li></ul><li>Distribution of Laborers in the Service Area<br /><ul><li> Farm laborers constitute major chunk of the working population in the village.
Daily wage rate for Farm laborers is around Rs.300 whereas that of other laborers vary from Rs.100 to Rs.250.</li></li></ul><li>Expatriates and Migrants<br /><ul><li>Expatriates (Abroad)
About 400 Expatriates in Gulf, Malaysia and Singapore.
Average remittance per person per month is about Rs. 9000
Major channel for remittance - Western Union and nationalized banks.
About 75 migrants working in Kerala, Maharashtra and A.P.
Average remittance is around Rs. 5000 per month.
Channels used for remittance - banks and money orders.</li></li></ul><li>Retailers and Micro Enterprises<br /><ul><li> Retail provision stores, tea stalls and small hotels generate a sales turnover of around Rs. 1500 to Rs. 2500 per day per shop and their profit margins vary from 20% in the case of provision stores up to 50% in the case of small hotels.
The sales turnover other small businesses like the fish vendors, tailors, cycle shop and laundry shops vary from Rs. 200 to Rs. 500 a day and the profit margin is around 30%.</li></li></ul><li>Medium Scale Businesses<br /><ul><li>Three coir factories employing a total of 60 people and accounting for a total turnover of around Rs. 1 crore per year.
Coconut businesses provide employment for about 40 people in the area and the total turnover is about Rs. 1.5 crores.
Availability of cost effective labor, raw material and affinity to the market (Thanjavur and Pattukottai) are major factors for such medium scale businesses flourishing in the area.</li></li></ul><li>Milk Economy<br />Aavin pays its members once in 15 days. It transports the milk to the processing unit in Pattukottai. It also sells a few liters of milk to the people of the service area itself. <br />Some people have informal arrangements where they buy provisions on credit from the retail stores and the amount is directly recovered from the fortnightly payment that is to be received from Aavin.<br />
Public Distribution System<br /><ul><li>The PDS store offers provisions to the people at a subsidized price. The Price differential is about 50% in most cases when compared with other retail provision stores and it is 20 times lesser in case of rice.
The APL households can choose to buy only one out of rice and wheat and one out of the other 3 items whereas the BPL households can buy all the items from the PDS store.</li></li></ul><li>Thank You<br />