Bank deposits of self-help groups cross Rs 17,000 crore

Nabard's financial inclusion training boosts SHG savings

National Bank for Agriculture and Rural Development (Nabard)'s financial inclusion training programs have resulted in bank deposits of self-help groups (SHGs) rising by as much as 88 per cent to cross Rs 17,000 crore as on March 2015 in India, as against Rs 9,000 crore in the previous year.

To improve the quality of interface between SHG members and banks for efficient and hassle-free delivery of banking services, Nabard had initiated a digitization program named 'EShakti' for SHGs on pilot basis in two districts --- Dhule in Maharashtra and Ramgarh in Jharkhand ---- in the current financial year.

The institution now plans to replicate this in eight more districts across Gujarat, Tamil Nadu, Karnataka, Orissa, Madhya Pradesh, Haryana and Assam in next four months.

Talking about the success of the programme, H R Dave, deputy managing director of Nabard said, "This has been possible because of the constant contact with SHGs under the financial inclusion programme over the past two decades. We made them understand the benefits of savings, which increased the deposits in the banks."

Since 1992, Nbard has been conducting financial literacy programmes across the country on standalone basis or in partnership with NGOs and forming SHGs even in remote areas.

Currently, there are 7.8 million active SHGs in the country, consisting of around 780 million members, 80 per cent of which are female SHGs.

"Now knowledge is sufficient amongst SHGs, but quality is the biggest issue with these groups and their financial planning. The main aim of EShakti is to ensure efficient functioning of SHGs in a proper manner with the use of technology," Dave said.

Nabard is also focusing on regenerating of all these SHGs with the EShakti programme. Gradually it will add more districts and target to cover the entire nation during the next 3-4 years under the digitisation programme. The bank has estimated the investment for extension of this exercise at Rs 1,200 crore.

"A bank manager will be able to track the activities of SHGs sitting in a room, including particulars like how much savings an SHG has or how regularly it meets and the profile of its members. This will not only help the banker but also change the risk perception of SHGs," said Dave.

The biggest challenge with SHGs currently is higher NPA percentage due to multiple financing, inadequacies in account keeping and other things. On an average NPA of SHGs stands at around 7-8 per cent, which Nabard intends to bring down to 2 per cent in the next five years.

"NPA is matter of concern and we want to bring it down as soon as possible. EShakti will surely help in it," Dave added.

To tackle such issues, Eshakti has been mooted in sync with the Prime Minister's Digital India Initiative. Volunteers trained by the Application Service Providers (ASPs) capture the data of the SHG and its members and upload it on a web-based server.

Nabard has given a tablet PC to the volunteer group, which is equipped with cloud-based apps, delivered front-end in regional languages.