G.V. Prasada Sarma
Exceeds target for SHG linkage in 2008-09
Poverty levels of groups to be ascertained before selecting them
Current year has been declared year of micro-credit plan
VISAKHAPATNAM: Having achieved a 129 per cent bank linkage to self-help groups in 2008-09, the Urban Community Development wing of the Greater Visakhapatnam Municipal Corporation is taking up a pilot project of total financial inclusion (TFI) in identified slums.
TFI aims to provide one source of financial support to members of self-help groups by freeing them of loans from various sources, generally borrowed at a high interest, and to fulfil their financial needs, according to UCD Project Director K. Srikant Prabhakar. Under TFI, eligible groups would be identified and a loan of Rs.5 lakhs is provided to them through banks to enable them to clear all their loans. The poverty levels of the groups will be ascertained before selecting them and priority accorded to start an income-generating activity to address their livelihood concerns.
Focus on suburbs
The pilot project aims to cover about 20 groups in each of the slums. The slums will be mainly selected from peripheral areas like Gajuwaka, Aganampudi, Duvvada, Paradesipalem, Simhachalam etc. Federation (equivalent of mandal samakhya in rural areas) facilitators will be trained and the Indira Kranti Padham specialists (GVMC has five of them) will involve themselves in the exercise.
TFI is an intervention introduced by the Reserve Bank of India for self-help groups and has already been adopted by the Society for Elimination of Rural Poverty (SERP), elaborates Mr. Prabhakar. Training the groups and cross-verification will be taken up before extending them assistance, says IKP Specialist (Institution Building and Capacity Building) A.V. Ramana Rao.
In 2008-09, GVMC set a record by achieving a bank linkage of Rs.50.86 crores to 5,843 groups against a target of Rs.40.91 crores. It is a great leap considering the fact during six years the bank linkage was to the tune of only Rs.54 crores. For 57 groups, Rs.5 lakhs - the biggest instalment an SHG is entitled to - is given. Besides, the peripheral areas with exposure to credit because of which banks were willing to learn were selected. Preparing micro credit plans, maintenance of records and documentation were closely adhered to besides closely coordinating with the bank officials.
This year due to micro credit planning and sensitising groups on documentation and involving new groups in the limited period available Rs.12.46 crores has been extended as assistance, says Mr. Prabhakar. It is quite a feat as the first two months was lost owing to the election code of conduct in force. As a part of the exercise, as many as 600 new groups were given bank linkage. This year the UCD has set for itself a much higher target than the Rs.52 crores it announced. The Mission for Elimination of Poverty in Municipal Areas (MEPMA) has declared the current year as year of micro credit plan.