The Hindu Business Line : Nabard plans to tap postal network to aid SHGs

THE National Bank for Agriculture and Rural Development (Nabard) will try to involve the post office network in Tamil Nadu to expand the self-help group (SHG) scheme, according to Mr C.R. Patnaik, Chief General Manager, Nabard Regional Office, Tamil Nadu.

Speaking to newspersons on Monday, he said that Tamil Nadu was a leader in the coverage under SHGs.

However, only a part of the potential has been realised and further expansion of the scheme will have to involve partners with the capacity to significantly expand the network.

Earlier, NGOs and commercial bank branches were involved, and post offices with their wide network covering every village were an ideal choice.

The programme is in its initial stage and discussions have been initiated with the Chief Postmaster-General.

It would be attempted in one district with Nabard providing the required funds through the post offices, which would be allowed to retain a part of the funds as a margin on interest.

With the boom in electronic communications, there is a drop in traditional communication routes involving the postal system.

Therefore, there are spare capacities available in the system that could be utilised for SHGs, he said.

Efforts are on to help SHGs in marketing their products. In Chennai, for instance, SHGs have been introduced to the private sector for possible opportunities to supply inputs.

Some SHGs have tied up with the Taj group of hotels to supply various materials including banana leaves, greens and vegetables.

Such attempts are in the initial stages and once both the parties concerned understand each other's style of functioning, the tie-up could be extended, he said.

Nabard and some NGOs have also set up showrooms in the city and elsewhere to showcase SHG products.

But marketing is an area where more focus is needed. To further encourage this programme, Nabard will be giving away State-level awards for performance to commercial banks, NGOs and the groups concerned on Tuesday.

In Tamil Nadu, over 1.1 lakh SHGs have been covered and linked to banks for credit support.

Of this, about 30 per cent has evolved to some form of economic activity for sustained revenue generation.

The project is a major success in India with the targeted formation of 10 lakh groups by 2007-08 likely to be reached by the end of this year. There are over seven lakh groups in operation now, according to him.

SHGs have emerged a major target for funding by the banks, which are happy with the percentage of recovery, which is higher than 95 per cent.

The programme has had a beneficial impact on the rural income with over Rs 2,000 crore disbursed throughout the country.

This has contributed more to the rural economy than some of the rural development programmes where over Rs 20,000 crore has been disbursed.

Credit flow to SHGs was Rs 1,022 crore in 2002-03, equalling the cumulative credit flow from banks between 1992 and 2002, according to Mr Patnaik.

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