SBI does a yeoman's job for Vidarbha farmers

State Bank of India (SBI) has embarked upon a unique project to educate and empower farmers in two talukas of Wardha district in the Vidarbha region.

Under the scheme, which is part of the national mission towards total financial inclusion launched by public sector banks, SBI intends to encourage savings, provide insurance cover and micro-credit.

The scheme, initiated at the behest of the finance ministry, directs PSU banks to offer micro-credit facility in districts where they are operating. The programme was aimed at improving the credit delivery mechanism to ensure an "inclusive approach." The scheme plans to cover the entire district in due course of time.

SBI has gone a step further and decided to impart basic banking knowledge and money management to illiterate farmers besides offering them insurance facilities.

Though Jalna district in the Marathwada region was identified for the mission in Maharashtra, SBI has independently launched a parallel programme in Wardha and has opted for two talukas of Arvi and Deoli.

"We want help farmers in these places which are hit by a spate of suicides for want of adequate credit facilities," explained SBI's business head Moin Qazi.

The bank plans to cover the entire district within a year. "A lot depends on the success of the project in Arvi and Deoli. We are offering credit facilities, assistance in opening and maintaining a savings bank account and also insurance cover," Qazi said.

SBI has modelled the scheme on the patterns of its highly successful self-help group project. Group of five marginal farmers are identified to offer credit on collective basis. The money has to be used for setting up irrigation facilities and other rudimentary farm infrastructure activities.

SBI plans to distribute Rs 15 crore and Rs 13 crore as loans to farmers in Arvi and Deoli, respectively. This is big money by any standards. It may be recalled that in Vidarbha farmers had committed suicide as they could not repay loans as less as Rs 5,000.

According to the scheme, money will be distributed through personal interactions with group members and will have a group leader. Members will be motivated to save the money and handed over it to the group leader in an envelope. The leader subsequently deposits the money in the bank.

Qazi said members can withdraw the money in case of an emergency. The project also includes has provision for kissan credit cards and encourages women to form groups to avail separate loans.