Bank sakhis challenge moneylenders in UP villages

Bank sakhis challenge moneylenders in UP villages

By USHA RAI | New Delhi | 1 October, 2016
Bank sakhis, moneylenders, Rajiv Gandhi Mahila Vikas Pariyojana, Uttar Pradesh, Uttar Pradesh villages, self-help groups, Anganwadi worker
The more educated of the women in UP villages were trained to be bank sakhis. Now these women are the harbingers of hope in their communities.
In a state where literacy rates are low and rural women have never set foot in a bank, the bank sakhis provide an invaluable service.

A new name is being added to the existing lexicon of village and block level development workers—the “bank sakhi”. While the ANM, the Anganwadi worker and the ASHA are well known beacons of hope for health delivery and child care, the bank sakhi is the financial representative of the self-help groups (SHGs) across UP. She is the one who is slowly but surely replacing the moneylenders in the villages across the 43 districts of UP, where the 131,175 SHGs of the Rajiv Gandhi Mahila Vikas Pariyojana (RGMVP) are active. She is recognised by villagers because she has access to banks and bank managers and can enable SHG women get loans with nominal interest for emergencies as well as to build their own assets and businesses.

Women like Usha Nag (45) of Dariabagh, Barabankhi, Savita (29) of Machreta,Sitapur, till a few years ago, did not have the courage to step out of their sheltered homes, but being more educated than other women in their village, were selected and trained to be bank sakhis. Today they are the harbingers of hope, of small but important economic empowerment that is changing the lives of women in rural UP.

Over 7,000 SHG members have been upgraded to bank sakhis and they look after some 89,000 SHG savings bank accounts in UP. It is estimated that they have facilitated loans worth Rs 420 crore over 14 years from banks for 34,000 account holders.

Bank sakhis help the samoohs (SHGs) in a block with their collective and individual accounts and enable access to loans. She is taught how to open and manage savings bank accounts; knows what documents are required for opening an account; bank managers know them; they prepare documents for availing the CCL (cash credit limit) facility; they conduct meetings of bank sakhis and help banks recover dues from the SHGs. The Community Resource Development Institution (CRDI) coordinator is like a senior bank sakhi who facilitates loans for a couple of blocks of the gram sangathan as well as reports to banks with all the documentation work. In a state where literacy rates are low and rural women have never set foot in a bank, they provide an invaluable service.

In 2007, the cash credit limit (CCL) facility was given to the RGMVP SHGs. With this facility, the CRDI coordinator or senior bank sakhi can get cash credit of Rs 1 lakh or more from banks and, interest is paid only on the amount that is drawn for loans. This is a huge benefit for the women and taking advantage of this facility, women have taken loans for buying land, buffalos, setting up grocery and cycle repair shops and even eateries.

Take the case of Usha Nag. Four years ago she saw several women coming and going from the RGMVP office just behind her home and on inquiry found they were members of SHGs who held weekly meetings, pooled in small amounts of money, shared experiences and got empowered as well as richer. With RGMVP support she formed the Pooja Mahila Samooh with 10 members, each contributing Rs 50 a month. Usha recalls, “the first time I went into a bank in March 2013, I was nervous. I had never stepped into a bank, leave alone have a bank account.” Today she is a senior bank sakhi, dealing with three banks—Grameen Bank of Aryavart, Central Bank of India and Bank of India—and handling financial dealings of all the samoohs of the gram sangathan. In March 2016, she received a CCL facility of Rs 50,000 and took a loan of Rs 25,000—Rs 5,000 for each of five women. Usha is handling the work of 400 samoohs in her block.

Well before she became a CRDI coordinator, in 2013 Usha took a loan of Rs 2,000 to be able to pay her child’s school fees. The interest on the loan was just Rs 40. After paying off the loan, the following year she took another loan of Rs 3,000 for the admission of her son to a college. Earlier this year, with a loan, Usha purchased and runs a general merchant shop in her village.

Savita, 29, joined the Vikas Mahila Samooh (SHG) of Machreta in Sitapur district in 2013. Though she had studied only till Class 8, she was more educated than others in her village and was made the bank sakhi. After joining the SHG, she is preparing for the Class 10 board examination privately because she wants to improve her work prospects. Her husband was against her joining the samooh, because the experience with an earlier samooh was not good. But she went ahead, quietly putting aside Rs 50 from her household expenses to pay the monthly deposit. Six months after her joining the SHG, her husband needed Rs 500 and asked her if she could arrange the money. She told him he would have to pay interest of Rs 20 on the loan. He returned the money with interest within a month, and asked where she had got it from. She confessed she had quietly joined the SHG. The husband, realising the value of the SHG, started giving her Rs 50 for her monthly deposit to the SHG.

The bank manager too, pleased with the quite efficiency of the Mahila Vikas samooh, offered a CCL of Rs 1 lakh. After consulting other SHG members, it was decided to give eight women, identified as the most needy, a loan of Rs 10,000 each. As a senior bank sakhi, Savita is overseeing the work of 500 SHGs in Machreta block. She handles two bank books—one with the CCL facility and the other, a savings account. The work that the bank sakhis do demands trust, both from the women and bank managers.

As senior bank sakhis, Usha and Savita earn Rs 1,500 a month. They set out of their homes at 10 am and return only after 5 pm. They handle Rs 1-2 lakh at a time, with banks providing CCL facility, savings bank deposits and revolving fund.

Savita, who took a loan of Rs 10,000 from the samooh and bought two bighas of land, says the respect for her has gone up in the village as well as in her home. She is called the Lakshmi of her home because she is today the major bread provider. The samooh is like our maika, mother’s home, she says. The samoohs have given loans in the middle of the night for pregnant women who needed to get to the hospital for delivery; helped another woman with Rs 3,000 for major surgery of a broken leg. Almost all the samooh members have taken loans to build an additional room to their home, buy buffalos and even set up their own shops.

When the federation of the samoohs meets, women raise their problems like not having ration cards or some senior citizens not getting old age pension, and with their growing clout, the bank sakhis are able to access these entitlements from the administration. Many of the women are contesting local elections and becoming grassroots leaders.

The educated, efficient bank sakhis are being further trained by the banks to become their business correspondents. They act like mini banks and with the help of handheld PoS machines provided by the banks, accept the deposits of the village women, providing them with bank receipts. These business correspondents can do dealings worth Rs 10,000 in a day. Fifty women are working as business correspondents in Unnao for the last three years. The Baroda UP Grameen Bank has identified 150 business correspondents, 50 each in Amethi, Sultanpur and Rai Bareli. The business correspondents get a commission from the banks for the business they bring in.

Senior SHG representatives have given talks on the power of the SHGs for women’s economic empowerment at the Lal Bahadur Shastri Institute for training civil servants in Mussoorie and the states of J&K, Punjab, Haryana and Himachal Pradesh have signed MOUs with the Federation of RGMVP SHGs for setting up SHGs in their states.

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