Indian Bank to open 12 branches for SHGs

Indian bank plans to open 12 new microstate branches to provide microfinance exclusively for self-help groups (SHGs) across the country in the next one year. With this, the total number of Indian Bank branches devoted to SHGs will reach 24.

Of the 12 new branches, the first will be opened in Dharmapuri district where the bank opened its first branch way back in 1989.

Speaking to the Business Standard, A Subramanian, executive director, Indian Bank, said the bank is waiting for Reserve Bank of India clearance, which is likely in the next few weeks.

These branches will serve as a 'one-stop shop' for all the needs of urban poor organised into SHGs. Apart from catering to credit needs, these branches will also provide non-credit services like training, counseling, and marketing.

Apart from direct loans to the groups, tailor-made loan products such as 'Vidya Shoba', an educational loan scheme for the wards of SHGs, and 'Grihalakshmi', a housing loan scheme are being implemented for the benefit of SHG members. Besides, a life insurance scheme (Janashree Bima Yojana) and a Health Insurance scheme (Universal Health Care Scheme) at low premium have been introduced by the Bank, he said.

He said that Indian Bank has been in the forefront in furthering the SHG movement in the country. The bank has so far credit-linked more than 2.30 lakh SHGs to the tune of Rs 1,600 crore, out of total advances of Rs 37,000 crore between April and February 2008.

SHGs, especially women SHGs, are doing very well in utilising bank credit and are prompt in repayments, said Subramanian. He added that the recovery rate has been '98-'99 per cent. The remaining one per cent would pay back their loans in good time, he averred.

An exclusive branch for micro-finance was opened by the bank in May 2005 at Chetpet suburb in Chennai. The branch has so far covered over 1.2 lakh families from 7,000 groups in and around Chennai through advances worth Rs 67 crore.

Following the success of the Chennai branch, 12 more branches were opened in other parts of the country including a second branch in Chennai, Bangalore, Vijayawada, Kollam (Kerala), Hyderabad, Nadiad (Ahmedabad), Pune, Bhubaneshwar, New Delhi, Kolkata and Patna during the first half of fiscal 2007-08.