The Hindu Business Line : `Extending micro-credit thru' SHGs is cost-effective'

THE Chairman and Managing Director of Corporation Bank, Mr K. Cherian Varghese, has said that extending micro-credit through self-help groups is cost-effective, collateral-free and almost NPA-free. The recovery is close to 100 per cent because of peer pressure in repayment.

Welcoming a gathering to launch 1,503 self-help groups (SHGs) at Kinnigoli on Sunday, he said that this initiative of a commercial bank joining hands with an NGO to promote self-help groups is the first of its kind in India.

Corporation Bank and SKDRDP joined hands in 2003 to form 1,500 SHGs covering 17,369 families in Mangalore taluk over a period of three years. "Because of the initiative and commitment from both the sides we were able to form 1,503 SHGs in just one year," he said. In the first stage, Corporation Bank hopes to disburse credit of Rs 15 crore to 1,503 SHGs.

Of the 17,369 members representing as many families, 10,629 are women. When women become independent, it would have beneficial impact on society, Mr Varghese said.

Mr Chidambaram also handed over the first multi-city chequebook — Corp Power Cheque — to the Dharmadhikari of Sri Kshetra Dharmasthala, Dr D. Veerendra Heggade, on the occasion.

Mr Hegde said that SKDRDP has formed 14,000 SHGs so far. These SHGs, which have 1.40 lakh farmers, have a turnover of around Rs 120 crore.

Mr P.K. Gupta, Executive Director of Corporation Bank, proposed a vote of thanks.

More Stories on : Rural Development | Credit Market | Karnataka

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page