When we have seen that the Central Government is controlling
NABARD ( National Bank for Agriculture and Rural Development ) in India we find that the governments at the States
have done little to encourage the sustainability of the Self- Help Group ( S.H.G.)
in the rural areas of India.
We have some random examples of the governments of the South
India where they encouraged Self- Help Group ( S.H.G.) but came
down heavily on the micro-finance movement due to defaults, suicides and
politicization of the micro-finance institutions.
When the Self- Help Group ( S.H.G.) are dependent on the
funds from the subsidized programmes like SGSY, MGNREGA , tribal Sub Plan (TSP)
and Backward Region Grants (BRG) where the State governments have not taken
initiatives to help provide loans to the Self- Help Group ( S.H.G.) s. The
financial condition is made very tough due to the apathy and loss of foresightedness
in the State level machinery. The Self- Help Group ( S.H.G.) are now seen as a
source of revenue by the State Governments looking at the continuation in
charging the stamp duty fees for accessing Bank Loans, Court fees for the
recovery of the Bank Loans through the department of revenues ( through
Tehsildars, SDMs, Revenue Inspector and Bank Officials ) and taxes , octroi and levies on all kinds of purchases of the
inputs required by the members of Self- Help Group ( S.H.G.). There is no tax
rebate available easily for the members of Self- Help Group ( S.H.G.) through a
single-window clearance in the State level. The exemptions in taxes, duties,
octroi and levies are charged as if these Self- Help Group ( S.H.G.) members
are the members of industries of the organized sector. Even when there may be
some rebates available to these IGA for Self- Help Group ( S.H.G.) the claim
for rebates, exemptions, etc are so cumbersome, time consuming and full of
corrupt practices that a majority of the Self- Help Group ( S.H.G.)/ Clusters
/Federations / Implementer Organization opts
out of it. These expenses are not re-imbursed by any seed capital or
grant-in-aid from the programmes of NABARD and thus these relief are not
availed of.
Political Parties exploit the loanees – When the Bank loans
are sanctioned the loanees are huddled into some public meeting named as the Bank
Loan Mela, Rozgar Mela, Swa rozgari Sammelan, etc. where the idea is to get the
maximum mileage out of the process of providing loans to the members of Self-
Help Group ( S.H.G.). The local MLA, M.P., Leaders and workers of the ruling
political party converge to these meetings boasting of the good work they are
doing for the poor people. They deliver speeches abusive of the C4entral
Government while the Funds that may have reached the Self- Help Group ( S.H.G.)
through SGSY came from the Central Government’s Share in SGSY, PMSRY, etc.
while confusing the loanee as to who is the final do-gooder for them !.
Thus we find that the
loanees are forced to be a part of the
political rally and do as per the wishes of the ruling party. The reports at
the NABARD- Level will show that these Self- Help Group ( S.H.G.) have decided
the IGA as per there meetings and self-determined what is good for them but the
fact remains that the ruling party workers force the members to select the
activities which they ( the Party ) wants. The implementer may also be a party
to these forced IGA in the individual cases. Thus these new loanee get
demotivated on the onset of the loan receiving time itself.
The IGAs then start with the intentions to satisfy the
demands of the outside agencies and the profits thus the repayments drop
sharply after the first cycle of the income generation. The loanee decides not
to repay the loan feeling that the political party will one day declare a
loan-waiver. so why repay ? After three ofr four years of default i.e.
non-repayment of loans these laonees become a soft-targets of the ruling
Political Parties and become “politically encouraged Bank-defaulters”. The
Banks start stern warnings where they shout at the Branch Managers pointing to
the rising NPAs ( non performing-assets ). Banks then target the women, SC,
STs, minorities, economically poorer families for issuing the loan recovery
notices. Those members who might have revolted from the pressure of the ruling
political alliances they are targeted more. The notices are then followed by
the court notices for the final settlement or “one-time-compromising” of loans.
This shows a clear cut political vendetta in some of the most poorer and remote
areas where the local workers of the ruling political parties have made a
mockery of the rule of law.
The local moneylenders are associated with this system to an
extent that they find many opportunities to exploit the needs of the loanee
from the Self- Help Group ( S.H.G.). These events go unreported for the fear of
the Banks , Implementer Agencies and the Political Workers. We have several
cases where all the above three kinds of roles are found within on family of
the village.
The defaulters of loans are organized to vote for the ruling
political parties so that they could get “loan-waivers” as a bargain in the
next government. The defaulters put all our effort to get the ruling party
re-elected in the State Assembly elections, local self-governments and all
kinds of municipalities. The farmers are organized in a way to win the Mandi (
Agricultural Market ) Elections. The elections are won by these false promises
for the loan defaulters but as the day pass by we see the same process of court
notices, defaulters disgrace and many kinds of disadvantages reach the house of
these compulsive defaulters. The recent sandals for the adjustments of loans
taken from the Cooperative Bank upto rupees fifty thousand is running into
crores of rupees in just two districts of Madhya Pradesh which is ,
incidentally , being investigated by NABARD, Bhopal.
When the political parties are themselves complicating the
game of loan, the Central Government Agencies like NABARD, SIDBI , IDBI and
even RBI can hardly provide any kind of relief to the common families who have
organized themselves into small Self- Help Group ( S.H.G.). These agencies have
not served the purposes for which they were created.
What is the way out of this recycling of poverty ?
The centralized, top heavy , full of useless power and
professional agencies have been targeting the ameliorating poverty in the rural
India.
NABARD, hence the RBI have failed to reach the poorer sections of the society
either through Banks or through Self- Help Group ( S.H.G.) s to provide loans
for them so that they can start some kind of productive and sustainable
livelihood
Statistics provided by the website of NABARD ( www.nabard.org) exhibits that by the year
2009-2010 Self- Help Group ( S.H.G.) linked with Banks ( i.e. given loans
through the local Branches of a Bank ) were 69.53 lakhs.
Now my calculation is
Even if we take an average of maximum 18 members in each
Self- Help Group ( S.H.G.) this should become 12.52 Crores of Indians.
When we take a minimum of 5 members per Self- Help Group (
S.H.G.) then this figure should be around 3.5 Crores of Indians.
Thus, we can safely say that the Banks provided service
loans in a range of 3.5 Crores to 12.5 crore Indian through Self- Help Group (
S.H.G.).
Again, more than 47% of
Indian are known to be BPL ( Below Poverty Line Level ) So out of a total of
112 crores we have 52.64 crores as BPL persons. Thus by 2010, Banks reached a
mix of population equal to a maximum of 12.52 crores which is about 10% of the total of 2012 Census .
Thus a
minimum of 5% and a maximum of 15% of Indians could get loans from the Banks
under the able guidance of NABARD through the formation of Self- Help Group (
S.H.G.).
( These figures have
been taken from the website and the question of validity and verifiability of
the data lies with NABARD )
My question is
this :
When NABARD has taken thirty years of time to reach a maximum
of 15% of the total population in India what time period will it take to reach
another 30% of the Indians through Self- Help Group ( S.H.G.) ?
In my assumption it could be well nearly another 70 years or
so.
What will you do ? Wait for Banks and honorable NABARD to
reach your door in a remote village in another turn of this century or die poor
?
I have the following suggestions to make :-
- Cut, edit and reduce the power of NABARD to regulate the already heavily-regulated markets for the Bank-loans to the rural areas.
The power that
is vested in these Centralised Banks have degenerated into corrupt practices in
Hugh numbers. The actions of the DDMs are supported by the Regional Offices of
NABARD while they have lost control on the loan activities of several
nationalized and private Banks. The Land Developemnt , Cooperatives and Some
Private Banks follow the instruction of NABARD but many of the big nationalized
Banks have been denying Bank Loans to the Self- Help Group ( S.H.G.) even after
the recommendations of the NABARD. This situation is detrimental to the
financial inclusion policy of the RBI and NABARD. What is the benefit of giving more powers to these Structures
when they are proving inefficient and ineffective to reach out to the majority
of the Indians ? The executive powers of NABARD should be reduced if they are
not able to generate compliance with the Banking system of India.
2. Penal Action through
Punishment and reward Sytem be Started for Banks :
NABARD, and thus the RBI, has been
reducing the flow of loans and grant in aid assistances to the implementors,
even when the higher budgetary allocations are made available to them. Instead of
reducing the non-budgetary expenses and the budget deficits they have been
increasing their expenses on salaries and other benefits, travel bills and
non-effective efforts to increase the percolation of the fund flow. They have
given excuse of the high (imaginary and non-realistic ) salaries provided to
the young energetic Managerial Staff of the private Banks. They fail to realize
that they have an aged staff with increasing family liabilities, placed in Big
places with inflationary pressures, have to maintain a Status equal ( sometime
greater that the ) District Magistrate, are inefficient in plain terms and have
shoddy decision making processes with no importance to transparency in their
decision making processes.
The flow of loans should be
regulated by the Central Governments through the Ministry of Finance and the
grant assistance provided to the Banks and thus to the NABARD should be put on
hold for another five years, unless the efficiency and professionalism is
proved by these conglomerates.
3. The preliminary
conditions for the encourager, motivator, Implementers for the formation and sustenance
of the Self- Help Group ( S.H.G.) should be relaxed :
The Self- Help Group
( S.H.G.) organize themselves into Clusters and than into Federation of Self-
Help Group ( S.H.G.). The Banks do not support these Structures which suitably
help these Self- Help Group ( S.H.G.) to attain a profit making and
economically viable entity. These organizations are not supported by any kind
of financial grant assistance by NABARD. The rules for help to these
organizations be relaxed and made profit making exercise for the members of
these Self- Help Group ( S.H.G.). Initial three-years’ support must come from
the NABARD and then followed up by the local Lending Bank Branches.
Instead of increasing the salaries of these managers who are
inefficient and anti-poor it is worth taking steps to strengthen the
micro-structures for the poor through their Self- Help Group ( S.H.G.) s. at
the village level itself with low salaries of the service- providing staff
members, efficient-accountants, low cost housing and low cost recovery of
loans.
4. Budgetary Allocation for these top-heavy Bnaks like NABARD be
reduced to anamount equal or less than the total amount of loan disbursed (
actually reaching the hands of the loanee) in that period.
The release of budgetary expenses for NABARD may be done on
a quarterly basis so as to maintain a recorded pace of work and verifiable mode
of work. The loan sanctioned and the loan disbursed should be similar and the
budget than can match this achievement for that quarter of the year.
5. All and every kinds of subsidies, benefits, increase and bonuses
to the Staff Members of the Nationalised Bank should be stopped and ket oh-hold for the next five year or so.
The performance in terms of the outreach of the loans to the
Self- Help Group ( S.H.G.), women, farmers and the youth of India should be
closely monitored and then rewarded or punished for non-performances,
under-cutting of loan figures, mis-reporting, inefficiency of Staff and under performances
of the Branches. ( which can be done case by case )
6. Adopt micro level technologies that will help the people.
All possible modes of latest technologies are untied to
reach out to the people of India.
We need more and new numbers of Branches at micro level. The Business Associate
Model is restricted to the wealthy and the relatives and friends of the
permanent employees of these Banks. New person hardly get any chance to get the
sponsorship for the new branches, BA Model and nano-Branches for the Self- Help
Group ( S.H.G.). This has to change in the coming years as the load on these
old stereotype ideas will increase manifold and new fresh ideas are needed to
provide an opportunity for others to flourish.
The Banks are very slow in investing on the technologies and
they are concentrating their services to urban centers of India. We hardly find ATMs, Credit
Cards, Mobile Banking, Net Banking and PDA Based Banking in villages far away.
The excuses are superficial as they do not want to invest on new technologies
for the benefit of the people. They also fear that the corruption will decease
due to IT based Banking processes. Many of the staff members are found lacking
in the simple use of a laptop and IT enabled services in NABARD itself.( can be
checked anytime by an online exam by an independent agency ) Why are they not
penalized when the private bank would have terminated the services very long
time ago. ?
7. Self- Help Group ( S.H.G.) Model is sustainable
More and more numbers of people should be encouraged to form
Self- Help Group ( S.H.G.) in their localities, open Bank Accounts and Save
money.This will increase literacy level for Banking procedures, mutual trust
among the community, money will reach the Banks in form of Savings and the
plans for the profit making IGAs will [percolate to the poor people through
these Self- Help Group ( S.H.G.), Clusters and Federation of these Self- Help
Group ( S.H.G.). The Schemes from the State and Central Governments will reach
these members faster. Governments should design programmes which can provide
tax benefits, exemptions, waivers, rebates, discounts and provide social
service through these Self- Help Group ( S.H.G.).
The poor people of India have to go a long way in order
to avail of the benefits designed for them.
The concept of Self- Help Group ( S.H.G.) can show us a
sustainable way to fight poverty in an indigenous way, purely Indian in nature.
Will we give an opportunity
to the ourselves ,WE , the people of India ?
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