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| Local NGO boosts MF business in North-East |
| Supratim Dey / Kolkata/ Guwahati Aug 24, 2010, 00:34 IST |
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When most commercial banks and big micro finance (MF) institutions are reluctant to enter into MF business in North-East, a local NGO – Nightingale Charitable Society (NCS) is showing the way.
Starting with a meager sum of Rs 4 lakh in 2004, NCS which has been spearheading MF lending in sub-urban Guwahati for all these years, is the only hope for thousands of under-privileged people today.
Hundreds of women from sub-urban Guwahati are mini entrepreneurs now, thanks to NCS.
Interestingly, though hardly anyone of the women beneficiaries is aware of the term 'micro-finance', they are all for praise for the financial support that they got from NCS. Dipanjali Devi, mother of a minor, who lost her husband in a road accident couple of years back, is a self-employed person with financial support from NCS, so is Jayanti Mushahary who now runs a confectionary business.
MF lending assumes greater significance in North-Eastern Region given the fact that financial inclusion has been dismal in North-East due to poor penetration of commercial banks. The average population covered per bank branch (based on the Census Population 2001) in Assam stands just above 20,000 in March 2008 which is quite unsatisfactory in comparison to the national average of 14,000 population during the same period.
It was in late 1990s when Mantu Nath Sarma, after completing his Masters, toyed with the idea of “entering into a business of lending to the poor.” The idea was finally given shape in 2004 with seven other companions.
“In 2004, I had a rough idea of micro finance, but then I knew the significance and its need,”said Sarma, who is the secretary of NCS. It all started with Rs 4 lakh, refinanced by Rastriya Gramin Vikas Nidhi (RGVN) and North-Eastern Development Finance Corporation (NEDFi), and since then, as Sarma said, there has been no stopping.
After undergoing various training programmes of national and international organisations over the years, NCS has evolved into a well-managed MF institution in Assam. It has now introduced the join liability group (JLG) model, as was propounded by Bangladesh's Md. Yunus, besides introducing other professional management skills. From its lessons and exposures, it now lends only to women, as according to Sarma, women are more sincere in managing their loan money and repaying the amount.
Currently, NCS has a client base of 17,000 and targets another 3,000 by the end of this fiscal. Sarma regretted that due to sheer reluctance of commercial banks to refinance MF institutions, NCS has not been able to grow at desired pace and increase its client base over the years.
"I know 17,000 as a figure is very less. But then, none of the commercial banks are willing to enter into MF business by refinancing institutions like ours. We are suffering from severe credit crunch," lamented Sarma.
Sarma attributes this hesitant attitude of commercial banks to "lack of awareness regarding the scope and need of micro finance among the managerial level staff".
If one goes by the figures of National Bank for Agriculture and Rural Development (NABARD), only 0.02 percent of total microfinance loans were disbursed during 2008-09 in the North-Eastern Region.
Narrating his tale of bitter experiences with the commercial banks, Sarma said for the past two years, State Bank of India (SBI) has been sitting over a loan proposal of NCS. Same has been the attitude of other banks like Canara Bank, Central Bank and Punjab National Bank. Till date, commercial banks have not approved any loan to NCS, citing one or the other excuse.
"There is vast difference between what the senior officials of these banks speak to us at various MF seminars and platforms and the attitude at the ground level," added Sarma.
According to him, it was only RGVN and NEDFi which are willing to refinance MF institutions, but then they too tread the path cautiously. Recently, NCS was awarded for its 'excellence in enterprise creation and contribution to the growth of the economy of North-Eastern Region' by NEDFi.
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