Self-Help Groups (SHGs) make branch-less banking easy

Self-Help Groups (SHGs) make branch-less banking easy
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Highlights

Tech savvy rural women are proving second to none when it comes to catching with technology-backed banking operations.So unique is their ease of doing business that they turned into niche players in scripting the success story of branch-less banking operations under Sthreenidhi to the tune of Rs 1,300 crore annually.

This strong network of committed womenfolk has created a unique institution of exclusive women-centric branch-less banking

Hyderabad: Tech savvy rural women are proving second to none when it comes to catching with technology-backed banking operations.So unique is their ease of doing business that they turned into niche players in scripting the success story of branch-less banking operations under Sthreenidhi to the tune of Rs 1,300 crore annually.

The entire operations have been run by the Self-Help Groups (SHGs). The Society for Elimination of Rural Poverty (SERP) forms the SHGs in the villages.

The SHGs form into village organisations (VOs) and Slum-Level Federations (SLFs). In turn, all the VOs in a tehsil or mandal will elect mandal samithis (MS). In all 14,901 village organisations and 556 mandal samithis have been formed.

This strong network of committed womenfolk has carved out the unique institution of an exclusive women-centric branch-less banking not present anywhere in the country.

Speaking to The Hans India, Sthreenidhi Managing Director G Vidya Sagar Reddy said all it takes for an SHG member is to call up a toll-free number connected to an IVRS facility which helps them avail a loan up to Rs 25,000.

The IVRS identifies the mobile number of the incoming call and forwards the application to the VO under which it had been registered.

The VO verifies application and gives online clearance. Then an encrypted file is sent to the bankers for approval of a loan. In turn, the Streenidhi approves the loan and transfers funds to the VOs.

The VOs disburse the loan amount to the SHG members in cash. The whole process is completed in less than four days. However, there is a credit limit fixed for each VO. The women who had availed the loan must promptly pay their EMIs so that others in the group could also avail the credit. Based on this credit rotation, each VO has been given ratings.

Those having better credit ratings would get enhanced credit limits “During 2016-17 financial year the recovery rate in the villages was 99 percent and in towns, it was 98 per cent. This reflects how the SHG women have been successfully running the branchless banking in the State, the official added.

Adding to this, now each VO has been given a tablet. This helps the VOs and SLFs to fill digital application with stylo pen, capturing digital thumb impression and iris data of the applicant. Once the captured data is validated online with Aadhar data, the loan disbursement would get automatic approval, the sources added.

Following this the State Bank of India and Andhra Bank had approved the VOs to act as their banking centres in about 1150 villages in the State.

Apart from successfully running in the field the representatives from the VOs also participate in board meetings of the Sthreenidhi. Thus, they are also involved in the decision-making process of how to further expand the technology backed branch-less banking. Plans are underway to expand the network to all the villages in the State, the sources added.

By V R C Phaniharan

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