Pilot Project on ‘SHG as a Business Correspondent’
‘The Bank in our Village – Bank Hamare Gaon’
Background
The Business Correspondent (BC) model forms the corner stone of India's
financial inclusion strategy to ensure delivery of banking services across the
length and breadth of the country. An important milestone of having a bank
agent or a CSP (Customer Service Point) in all villages with a population of
more than 2,000 has been achieved. But despite the remarkable progress in terms
of geographical outreach, significant challenges remain. CSP and client
dormancy (especially in the rural areas) are high.
NABARD’s SHG-bank linkage program (SBLP) has supported the formation of
SHG networks with extensive geographical coverage and client outreach.
Convergence of BC based financial inclusion initiatives with SHG networks may
hold some answers to the current challenges in financial inclusion.
A pilot project was therefore envisaged to explore the potential of SHG
members functioning as Business Correspondents to offer banking services at the
doorstep of the village residents particularly women and poor households, with
backing from the SHG supporting institutions.
GIZ NABARD joint collaboration; RFIP (Rural Financial Institutions
program) supports the pilot program with the sole objective to understand the
feasibility , coexistence and mutual fit of SHG networks within the BC
ecosystem.
The Grameen Bank of Aryavart
(GBA) in cooperation with the GIZ-NABARD Rural Financial Institutions Programme (RFIP) has identified a well-functioning SHG
ecosystem that is being nurtured and promoted by Rajiv Gandhi Mahila Vikas Pariyojana
(RGMVP) for this pilot project. Bank Sakhis –
selected SHG members who have been acting as a link between the SHGs and the
bank –have been trained and equipped to carry out the function of CSPs.
Handholding/support as well as quality control and supervision capabilities
have been built up at the level of the block level SHG federation[1], with support from the RGMVP.
Project Objective and Area
In view of the above background, GBA with the technical and advisory
support from RFIP, decided to conduct a pilot on leveraging the SHG network as
a Business Correspondent with the key objective: “Leveraging
SHG eco-system for building a sustainable CSP network to offer formal
banking/financial services in un/under-banked villages”.
GBA and RGMVP chose villages at Sumerpur block
of Unnao district in UP, where the access to formal
banking services and its usage have been poor. The project began in September
2012. After the design of process and training modules, the enrollment
activities began in March 2013.
The Pilot Model- Stakeholder Analysis:
Bank:Grameen Bank of Aryavart is the Financial Institution
(Regional rural bank) in the project
§ Introduce BC and Bank Sakhi to the villagers as
representatives of the bank for providing doorstep basic banking services
§ Support BC in the promotion of banking services to the villages
§ Support BC in organizing and conducting financial awareness and literacy
campaign in the villages
§ Participate in the pre-enrolment meeting being organized by the BC in the villages
§ Provide training support to the Bank Sakhi as a BANK
SAKHI-CSP and SHG institutions regarding the process and procedure for the delivery
of banking services, sales and promotion techniques
BC and TSP: Bartronics is the corporate BC and Technology service
provider. As the organization a key technology service provider, it is playing
the dual role of both BC and TSP.
§ Provide enrolment kit (laptop, webcam, fingerprint machine, stamp pad, account
opening form, etc.), training and ongoing technical support to the BANK
SAKHI-CSP for the smooth implementation of enrolment activities
§ Provide training to the BANK SAKHI-CSP regarding handling of technology kits
and troubleshooting basic technical problems faced by the BANK SAKHI-CSP
§ Process data gathered by BANK SAKHI-CSP for opening of BSBDA
§ Provide transaction kit (POS device, cash book, stamp pad, etc.), training and
ongoing technical support to the BANK SAKHI-CSP for the smooth implementation
of transaction activities
§ Provide
training to the BANK SAKHI-CSP on the book keeping (how to maintain cash book),
cash management (minimum cash balance, maximum transaction limit, etc.) and
other transaction related matters such as beginning of day, end of day, etc.
RGMVP: Rajiv Gandhi Mahila Vikas Pariyojna
is the SHPI (SHG promoting institution) whose SHG federation provides the
network of its women led village level institution for providing banking
services to client in the villages. RGMVP provides the services and resource of
the following institution promoted by it.
Block Federation
§ Manage FI awareness building campaign, financial literacy workshop in its
geography
§ Co-ordinate
with BARTRONICS for installing enrolment kit, issues related to hardware and
processing of enrolment data (in electronic form)
§ Co-ordinate
with bank for approval of account opening application
§ Co-ordinate
with bank/BARTRONICS regarding payment of commission
Village Organisation
§ Manage FI awareness building campaign, financial literacy workshop in its
geography
§ Co-ordinate
with bank for approval of account opening application
§ Ensure completion of enrolment activities and smart card distribution to be
done by the BANK SAKHI-CSP as per the given timeline
§ Promotion of banking services with the help of SHG members in its village
§ Introduce Bank Sakhi to the village as a representative
of VO being assigned the role of conducting enrolment of villagers for account
opening and providing transaction facilities at the doorstep of the
villagers
Bank Sakhi : They are members of RGMVP promoted SHG federation members. Each Sakhi is allocated one Gram Panchayat
covering 4-5 villages.
§ Ensure prompt and efficient service to be provided to the customers
§ Ensure safe custody of cash and equipment which are at their disposal.
§ BANK SAKHI-CSP shall not charge any fee or commission or any charges from
the customers
§ Maintain confidentiality with regard to customer information and do not share
any customer information with any third party except BARTRONICS and Bank
Leveraging SHG Institution: FI Enabler
The GBA and Adarsh
Mahila SHG Federation at Sumerpur
have short-listed 27 Bank Sakhis and Navyug Mahila SHG Federation 23
Bank Sakhis in a phased manner.
These Bank Sakhis have been trained on ICT-based
financial inclusion using classroom training modules and continuous
hand-holding supports provided by GIZ project team and community volunteers
appointed by the SHG federation.
The SHG federation constituted a Financial Inclusion Committee to
coordinate with the branch staff of GBA, Bank Sakhis
and RFIP for the planning and execution of financial awareness program,
enrollment, deployment of ICT hardware, transaction etc. in the project
villages.
Outreach and Usage of ICT-based Banking Services
As of 15th March 2015,
the SHG federations through the network of Bank Sakhis, have taken the
ICT-based banking services at the door-step of over 23,000
households spread over 174 villages at 47 gram panchayats. A few members of SHGs have opened individual savings accounts under
the project. Reason being such account (opened through Bank Sakhi)
provides flexibility, convenience and security. Unlike savings in SHG, the
members can withdraw money as needed. The members can operate account at the
door-step and also beyond banking hours. The outreach of ICT-based banking
services of the GBA leveraging SHG institutions, are shared below.
Particulars |
Unit
(No.) |
Particulars |
Unit
(No.) |
Bank
Sakhi |
50 |
Village |
174 |
Household |
23,000 |
Bankable
Population |
46,000 |
Enrolled
population |
22,033 |
SHGs
in the project area |
249 |
SHGs
members in project area |
2640 |
Members
of SHGs enrolled individually |
1903 |
% of
enrolled population |
48 % |
% of
enrolled Household |
48 % |
Bank Sakhi Performance- Key Indicators (as on
15th march 2015) |
|
Summary Key Indicators |
Value(in INR)/No |
No. of Bank Sakhis appointed |
50 |
No. of villages reached by
Bank Sakhis |
174 |
No. of bank accounts
activated through Bank Sakhis |
15666 |
No. of active accounts
(=with at least 1 transaction in last 3 months) |
8,294 |
Cumulative no. of
transactions (deposits, withdrawals) |
198763 |
Cumulative value of
transactions (deposits, withdrawals) |
Rs 27098304 |
Average no. of active
accounts per active Bank Sakhi |
320 |
Average no. of transactions
per active Bank Sakhi per month |
368 |
Average value of
transactions per active Bank Sakhi per month |
Rs 43,027 |
Monthly commission
fees/revenue earned by active Bank Sakhi |
1400 |
Cumulative no. of products
and services delivered through Bank Sakhis |
10 |
Over 48 % of bankable citizens have enrolled to use the formal savings services of GBA. 72 % of the SHG members have opened their individual savings accounts
voluntarily. The SHG institution is committed to take
the banking services to each and every under/un-banked household in the project
villages. It is interesting to note the usage pattern amongst the
account-holders.
Total
15,666 active accounts (Total 1,98,763 cumulative numbers
of transactions valuing Rs. 2.70 Crore have been
taken place till 15th March, 2015.)
Other Key Financial Products and Services Offered to the BSBD client of
project
§ Recently, the online
transaction facility has been rolled throughout
all the network of CSPs including Bank Sakhi-CSPs.
Through this facility, the clients can do fund
transfer on a real time basis within any 651
branches of GBA spread over 15 districts of UP.
§ MGNAREGS and government social security
beneficiaries such as pension (old age, widow) are
also availing banking services through the network of Bank Sakhis
after a Successful rollout of AEPS (ADHAAR enabled payment
system).
§
The
no-frills account holders are even receiving remittance from their relatives working in other cities into their savings
accounts. The clients withdraw the remitted amount easily at their doorstep
through Bank Sakhis using the POS device.
§
The
villagers having opened the no-frills accounts through the Bank Sakhis are also eligible for hassle free Over Draft (OD) facilities. The client, with minimal
documentation, can avail Rs.10,000 OD with the help of
Bank Sakhis. The OD amount upon approval by the bank branch, is credited into the savings account of the client.
The same can be withdrawn at the doorstep with the help of Bank Sakhis.
·
In the recent Solar promotional drive
by the bank, more than 60 SHLS loans have successfully disbursed in Sumerpur in the month of Oct 2014 to Feb 2015.
BF
activities –At glance
Particulars |
Project Area |
No. of RD accounts opened by 30 Bank Sakhis |
569 |
No. of KCC loans |
13 |
Amount of KCC (Rs. lakh) |
14.83 |
NPA amount collection (Rs. lakh) |
51.04 |
No. of bank notice given to the delinquent
clients |
848 |
No. of overdraft (OD) / loan facilities |
16 |
No. of solar loans |
62 |
No. of inward remittance |
60 |
No. of online fund transfer |
3062 |
Sustainability
A Bank Sakhi is doing average 500 no. of transactions in a
Gram Panchayat. Since April 2013, 50 Bank Sakhis have facilitated over 1,98,763
no. of transactions. The network of SHG
institutions have gone beyond their traditional role of inculcating savings
habits amongst female members, but have also encouraged savings habits amongst
the villagers in general.
A Bank Sakhi-CSP is doing on average 500
no. of transactions in a Gram Panchayat. She is
earning above Rs.1,400 per month. She recently started
the Business Facilitation work.
Parameters |
Unit
(Monthly) |
Rate |
Incentive |
For
providing basic savings transaction facility through POS device to NFA
account holders |
|||
Fixed
commission |
If
>500 transactions |
Rs.500 |
Rs.
500 |
Transaction |
1000
transactions |
Rs.
1.25 per transaction |
Rs.1250 |
For
helping village members in using other financial services from the bank |
|||
Loan
approvals of OD / KCC |
10
applications |
Rs.100
per application |
Rs.1000 |
Recovery
of NPA/Overdue |
Rs.2,00,000
amount recovered |
Rs
1.50 per 100 |
Rs.
3,000 |
Monitoring
of loan accounts |
50
loan accounts |
Rs.20
per account |
Rs.
1,000 |
Notice
to OD/NPA borrowers |
50
notices |
Rs.10
per notice |
Rs.
500 |
Sale
of solar home lighting system |
5
solar lighting system |
Rs.100
per system |
Rs.
500 |
Average
monthly earning |
Rs.
6,750 |
Phase 2 of Pilot Project:
New Initiatives: The project will continue to
leverage technology and SHG based network to provide doorstep banking services.
Dual
Authentication and digitization: The
Pilot project has entered Phase 2 from June 2014. Project added 23 new Gram Panchayats with an objective to scale up the services and
strengthen the CSP network of SHG federation members. In the second phase of
the project; SHG software for integration with the POS operated by
Bank Sakhis successfully been launched and tested in
the operational area, by which SHGs’ accounts can also be
operated through POS machine by Bank Sakhis.
In nutshell with the help of
this, digitization of the SHGs’ records is quite possible which is very unique
and one of its own kind in the country. Once the software will roll out
operationally in both the blocks, Repayments in the CCL and Term loans accounts
and deposits in SB accounts of SHGs will become much easier and can be done
from the meeting place of the SHG on same day, which will save valuable time
and cost which used to occur for going bank branches for SHG transactions.
POS (Point of sale) based enrolment services: The project will facilitate enrolment of
clients’ right at the place of sakhi through the POS
machine. Currently, the clients have to participate in the enrolment camps
which are held periodically in one of the selected GP, wherein the clients of
nearby villages come and participate with KYC documents. With this, the
enrolment rates are expected to improve along with saving of time of the
client.
Ru Pay based debit and Ru Pay KCC: The Bank will soon introduce Ru Pay KCC and Ru Pay debit cards through the CSP platform. This will help
the clients to withdraw cash at CSP touch pints without the hassles of going to
Bank branch.
Risk Management and result based Monitoring systems: Results based monitoring systems as per
global GIZ policies will help quality adherence. The BLA (block level
association) level monitoring mechanism will be strengthened for effective CSP
delivery.
MIS systems: Phase 2 of the project has graduated to elaborate kind of MIS to plan, allocate,
track and monitor CSP activity at GP and village level. MIS will help in
evaluation process eventually (planned for end of 2014.)
Key Learnings:
Case Study 1
Financial Empowerment along with Social Empowerment
Sakhi’s Profile
Uma Devi, 39 years old, mother of
four kids, belongs to a high caste Brahmin family. Coming from a small family,
she was not able to adjust to a large joint family after her marriage and she
left her house because of increased work pressure. However, on being persuaded
by her family and getting support from her parents in law, she returned back to
her husband’s family. She herself tells this story and explains how things have
changed as she learnt how to handle bigger responsibilities. Her husband is a
farmer and earns hardly enough to take care of the expenses of raising four
kids (three of them are girls). One of her daughters is getting married in
January, 2015.
Her journey as Sakhi