HCBL Bank reaches out to micro entrepreneurs

The lender is giving credit at 8% interest to those engaged in traditional handicrafts

Lucknow-based HCBL Cooperative Bank has started a novel initiative of handholding micro entrepreneurs engaged in traditional handicrafts such as chikan embroidery.

The bank has launched a scheme to offer credit to such entrepreneur-artisans at low interest rate of eight per cent. The bank would also chip in with its resources for marketing their products in national and international markets.

“We want to improve their living conditions by giving soft loans and offering support for exporting their ware. This would increase their income levels,” HCBL Bank Chief Executive Officer Pawan Kapoor told Business Standard.

The loan amount would vary from Rs 10,000 to Rs 50,000 and would be offered to chikan/zardozi artisans, who are micro entrepreneurs in their own right.

However, they get a miniscule share of the price paid by consumers, as there is a long chain of middlemen involved. Majority of these are poor and do not have resources to market their products directly.

The bank would allow these artisans to display their finished products in its branches for selling.

Last year, HCBL had started opening savings bank (SB) accounts of beggars under financial inclusion and motivating them towards self-employment.

So far, the bank had opened accounts of 150 beggars in Lucknow under the relaxed know your customer (KYC) norms of the Reserve Bank of India (RBI).

The bank works towards sensitising these beggars to leave begging and engage in self-employment.

Presently, HCBL has nine branches in Lucknow, Rae Bareli, Unnao, Barabanki and Sitapur. It has applied to RBI for opening five more branches in Varanasi, Hardoi, Kanpur, Lakhimpur and Noida.

“We want to spread to other states and are awaiting the RBI nod for the possible merger of an urban cooperative bank (UCB) in Bhopal, Madhya Pradesh,” he informed.

The Bank is doing due-diligence for similar prospective mergers in Pune (Maharashtra) and Gujarat.