SBI Chaawdi : Loan Camps for Self-help Groups....

SBI Chaawdi : Loan Camps for Self-help Groups....

MSRLM works for the empowerment of women through self help groups. Social inclusion is the base or the foundation which enables the poorest or the most vulnerable women of rural India to become members of community based organizations like the self help groups, village organizations or cluster level federations. Coming together and saving for thrift maybe the first step. SHGs go much beyond that since they follow "Dashasutri" the ten cardinal principles which include five economic aspects of regular meetings, savings, internal lending, repayment of loans, writing books of accounts and five social aspects of health, nutrition, sanitation, education, participation in panchayati raaj institutions, getting their entitlements and sustainable livelihoods. 

Following these ten principles for three months enables the SHG to become a financial institution by itself because it is then that they receive their revolving fund of Rs.15,000 /- which they use for internal lending on payment of interest. This way every member gets out of the clutches of the moneylender and also gets the opportunity to set up some small enterprise. Ten to twelve SHGs congregate to form a Village organization and 15 to 20 Village organizations form the Cluster level federations. 

Another important aspect is the preparation of the micro investment plan or the MIP which captures the desire and need of every member of the SHG to set up an enterprise. The cluster federation receives Rs.60,000 as community investment fund for creating better enterprises by the community. 

This too is a fund which remains with the community and is circulated among groups on payment of interest. So the SHGs and CLFs not only have a corpus but already have an experience of playing the role of mini-bankers by themselves before they approach the banks for linkages. 

Almost 30 years ago, National Bank for Agriculture and Rural Development (NABARD) had initiated this concept of Self-Help Group Bank Linkage Program (SBLP), revolutionizing the outlook of the country towards rural women. Banks started opening accounts in the name of women and they were channelised for creating sustainable livelihoods. 

This initiative was strengthened further through DAY NRLM which has taken the SHG Bank linkage to new heights. 

Self-help groups are now recognised as entities and entrepreneurs engaged in sustainable livelihoods and also promoting community development programs. 

Banks are coming forward to support their enterprises as can be seen in the increase of Bank linkage from Rs.500 crores in 2016-17 to over Rs. 1400 in 2018-19. Till date over 15 lakhs households have received loans over Rs.5700 crores. Maharashtra has a target of Rs.2400 crores for SHG bank linkage in 2019-20. While continuous sensitization and follow up with the banks has led to increased loans for SHGs yet hurdle-free access to finance still remains a challenge. The average size of loan and the timing is another major problem along with the delays in opening bank account of SHGs. There are instances of bankers asking for uneccaasry documents despite clear cut guidelines and instructions by the Reserve Bank of India. 

Committees have been set up at the state, district and block levels to monitor and support SHG financing yet field level realities are sometimes in contrast. It is often observed that SHG financing does not receive as much attention due to the small size of loans and the efforts needed for processing the same so there is a tendency among bankers to neglect this sector. Surprisingly, the private sector banks, largely ICICI and HDFC to some extent have made great strides in financing the SHGs. 

Studies conducted by MSRLM have clearly indicated great improvement in health, education, food security, savings , income and expenditure among the SHGs who have accessed finance and manage enterprises. Therefore financing of SHGs can be a good catalyst in transforming society. 

State Bank of India has certainly recognized and understood this aspect and has been working proactively for providing SHG finance. 

Last year they had conducted many SHG Bank loan Melawa and have grown phenomenally in increasing SHG bank linkage. 

Now, they had graduated and come up with a new concept for the year 2019-20 known as the SBI Chaawdi which was a unique blend of exhibition of SHG products and bank loan products. 

I had the fortune to attend two such SBI Chaawdis at Latur and Nanded along with the bankers and district administration. 

As Collector Latur , Mr.G.Shrikanth rightly said, the Chaawdi represented the two sides of a coin, Bharat and India. Bharat was the exhibition of products made by the rural SHGs to increase their livelihood and India was a bouquet of banking services and products which they could access e.g. loans for housing, vehicles and other needs. MSRLM was enabling them to cross from Bharat to India only because of the increase in their purchasing power due to varied options of access to livelihoods. 

Mr.Ashok Kaakde, CEO, Zilla Parishad,  Nanded emphasised on regular repayment of bank loans to get the benefit of interest subvention by way of zero percent interest. 

More than 500 loans were disbursed to SHGs in Latur and Nanded amounting to almost Rs.7 crores. 

The DGM of SBI, Mr.Mohapatra reiterated the confidence they had gained from financing SHGs of MSRLM due to the discipline maintained by the SHGs. SBI had recognized their potential in banking of SHGs as was evident from the special effort being made to organise such chaawdis all over Maharashtra. They were also planting 10,000 trees in Naigaon block of Nanded. 

State Bank of India, has a historical legacy of 200 years and is more like a parent protecting his child. The SBI Chaawdi was an effort to expedite bank loans as well as create awareness about the various loans which are available. 

The whopping presence of hundreds of women at both venues reflected their need and desire for banking finance. SBI had surely paved the way by organising SBI chaawdi. 

Chaawdi is essentially a public place which is the property of the entire community and a place of business transaction. 

By associating the name of Chaawdi to it's loan mela SBI had taken a positive step of taking SHG finance to the next level. Several such Chaawadis have been planned all over the state in the next few weeks by SBI. Thousands of women would be benefitting from it. SBI, had set a precedent which hopefully other banks would quickly follow.