nabard - expanding financial inclusion & outreach in north eastern region
DESCRIPTION
Expanding the outreach of financial services / financial inclusion in the difficult terrains of the North Eastern Regions of IndiaTRANSCRIPT
B SB S SuranSuranGeneral ManagerGeneral ManagerNABARD,NABARD, MumbaiMumbai
In the North Eastern RegionIn the North Eastern Region
WHAT : FI is about the process of ensuring access toappropriate financial products and services
WHOM : society in general and vulnerable groups such asweaker sections and low income groups in particular
HOW: at an affordable cost in a fair and transparentmanner by mainstream institutional players
There is huge demand for micro-credit. however,penetration rate is low
Lack of formal outlets of banks + norms too tough ?
Inaccessibility of villages Poor infrastructure (transport, connectivity power)
Inadequate number of good NGOs: network, weak capacity ofNGOs, low understanding of SHPI staff !
Lack of mature credit culture – tendency to transact in cash only
Traditional practices in vogue : important to know thesensitivity of local people
Where are we in SHG promotionWhere are we in SHG promotion
SikkimAssam
Meghalaya
As on 31 March 2011, NER has3.24 lakh SHGs ?…0.4% ofcountry’s share. Credit linkagevery low
About 1.74 lakh SHGs have to bepromoted in the next 3 years if50% rural households have to becovered.
Limited potential exists ! Moststates have reached theirsaturation point ?
Quality & continuance an issue !
Jammu &Kashmir
Himachal Pradesh
UttarPradesh
Punjab
Haryana
Rajasthan
GoaKarnataka
AndhraPradesh
Orissa
MadhyaPradesh
Delhi
Gujarat
Maharashtra
KeralaTamilNadu
Bihar
WestBengal
Jharkhand
Sikkim
Assam
ArunachalPradesh
Nagaland
Manipur
MizoramTripura
Meghalaya
Chhattisgarh
Green coverage -good
17
Red < 50 %coverage
6
Yellow > 50 - 70 % 2
Brown >70 - 90 % 4
SHG savings coverageMapping- March 2011
Assam Meghalaya
Nagaland Tripura Ar.Prades
Mizorzm Mainpur Sikkim
SHGs 245120 10653 9866 34312 7079 4592 10306 2811
Ruralpopl(%)
49 23 4 69 37 51 29 6
Av savingRs
3344 3531 3679 9895 2632 3878 2331 6010
Av loanRs
78100 68200 79108 113600 47300 68300 48800 52700
NPA (%) 8.31 8.45 14.26 2.16 6.51 52.06 17.40 31.22
Branches/ L Sq km
977 580 277 1239 69 289 201
Use traditional systemsUse traditional systems --linkages with formal systemslinkages with formal systems ––NagalandNagaland Village Dev BoardVillage Dev Board egeg
Leverage government enabled systems : for SHG promotion likeLeverage government enabled systems : for SHG promotion likeDalbandhusDalbandhus inin TripuraTripura or Community Resource Persons.or Community Resource Persons.
Use of NGO as Business Facilitators for select districts to ensuUse of NGO as Business Facilitators for select districts to ensurerecontinuous escort.continuous escort.
Use of resource NGOsUse of resource NGOs –– field NGOs formatsfield NGOs formats Use ofUse of BCsBCs to reduce transaction costs.to reduce transaction costs. JLGs to meet larger credit demand. Evolving suitable credit products like cash credit forEvolving suitable credit products like cash credit for SHGsSHGs,,
voluntary savings etc.voluntary savings etc. Provide concessional loans ?Provide concessional loans ? Concessional refinanceConcessional refinance
Supply InterventionsSupply Interventions
Use of Dept of Post : for channelising Fin services delivery ? Where land patta is not available, agricultural loans may
be given based on user certificates or letter of comfortfrom local bodies.
Village Development Board / Local bodies may act asguarantors for agricultural loans where there are no landdocuments.
Village Development Boards can assist in loan recovery. JLGs may be promoted to meet the credit demand of
farmers without land documents. Special thrust for the promotion of SHGs in NER as this
could bring about Financial Inclusion.
Supply InterventionsSupply Interventions
Demand InterventionsDemand Interventions
Capacity building to improve skills and ability toundertake enterprises (Micro Enterprise DevelopmentProgramme). MEDP /MEPA
Creation of infrastructure/ marketing linkages,especially through public funds.
Awareness creation to propagate basics of SHG / JLG.
Simplification of processes to enhance demand.
Financial education/ literacy.
Insurance products.
Literacy is not necessarily a barrier to learning and education We can contribute even if we are illiterate (contrary to
normal belief where we see illiteracy as THE barrier tolearning & developing)
Savings: an important financial service need for the poor Savings : there is a need for enabling it and increasing
opportunity for it Savings : has the potential to fulfill a part of the lifecycle
needs Credit options: needs to be minimal Credit steroids: without the commensurate economic
capacities to repay loans… can lead to crisis.
Credit does not work in isolation. It has to be converged. Traditional Institutions which needs to be leveraged for
sustainable financial inclusion in the Region Marups in Manipur, VDBs in Nagaland, Xonchois of lower
Assam for expanding financial outreach in the state ?- poordocs, low relation with banks, high ROI,cash flow funding,reliance on one person, But find a way ….
Need for link :Traditional Instit. to the Formal Institutions mFIs and DOP can also serve the cause for FI ! But; high interest rate charged by the MFIs could lead to
reverse resource transfer of the primary assets of the poor tothe rich.
