The Hindu Business Line : Where SHGs are a bank's top client

"Most of the groups comprise tribal and Dalit women. They have taken loans up to Rs 3 lakh! We've never had problems with them as far as repayment is concerned."

Recently in Rayagada

After hearing depressing tales of tribal women in Kashipur district, where even the odd women's self-help group just makes monthly deposits in the bank, without taking out the money for any economic activity, it was a pleasant change to hear about an RRB (Regional Rural Bank) branch in Rayagada town with a group of SHGs as its largest client.

Last year, the Koraput Panchavati Gramya Bank credit-linked 19,000 self-help groups, "this year the total should cross 30,000," says D.N. Das, Branch Manager of the bank in Rayagada.

It is a beaming banker who expresses "full satisfaction" with the repayment of the loans taken by SHGs. Most of the groups comprise tribal and Dalit women. As you casually ask him about the loan amount availed by SHGs, he says, "Some groups have taken loans up to Rs 3 lakh!" He adds, "Two years ago, we gave a loan of Rs 3 lakh to the Kalyani group in Rayagada and they have already repaid Rs 1.5 lakh. We've never had problems with women's group as far as repayment is concerned."

It is with delight he explains how this "dynamic group" has taken "on a man's job. Putting up chandwas (marriage tents) for marriage festivities. They take contracts for the whole celebration... from the tent decorations to the chairs and tables." He adds that the bank is unable to grant above Rs 3 lakh for a single group of 10 to 15 women, as these groups are also "eligible for sponsorship under the Central government programmes."

But compared to women's groups, in the loans given to individual men, "particularly those that are eligible for government subsidies, the track record for repayment is very poor."

But among the SHGs "there hasn't been any defaulter. Ours is a small bank and our total annual credit is around Rs 1.7 crore, of which nearly Rs 80 lakh would have gone to the SHGs, including funds under the SGSY (Swarna Gramya Surojgar Yojana)."

On the kind of business ventures undertaken by SHGs, Das says, "Oh they do all kinds of things. Some groups do dhal processing and sell loads of pulses; others make brooms and sell them at a good profit. We've financed poultry and fish culture; the groups take the tanks on lease for 5 to 10 years from the gram panchayat and rear fish. For poultry and fish culture, we've given loans of up to Rs 3 lakh. There are all kinds of diversifications in what they want to do. They come and discuss their ideas with us."

But do bankers like him spending time for adivasi or SC women? "Of course, they are our topmost customer; certainly we find the time because over the last few years they have become our major clients."

Das describes a sea change in women's attitude towards bank and finance, when he says that 20 years ago it was unthinkable for a Dalit or tribal woman to come anywhere near a bank. "But now things have changed drastically... the way they dress has changed, the way they talk is changed. Above all what has changed the most is their confidence level; they know they can borrow money at interest, fund some profitable venture with it, and improve their lives."

(To be concluded)

Response may be sent to rasheeda@thehindu.co.in

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