Vani Doraisamy

Trains 200 postmen in Pudukkotai, Chengelpattu districts

CHENNAI: A pilot project, aiming at making rural post offices into one-stop shops for dispensing loans to self-help groups (SHGs), is being implemented by the National Bank for Agriculture and Rural Development (NABARD) in Sivaganga and Pudukkottai districts.

This is the first time post offices have become enablers and facilitators of rural micro finance.

"We wanted to capitalise on the networking potential of the rural postman who is a friend of the community. We have trained 200 postmen in Pudukkotai and Chengelpattu districts to become points men for appraising and training SHGs. SHGs can now open accounts in post offices and get loans too,'' Prakash Bakshi, Chief General Manager, NABARD, told The Hindu .

A memorandum of understanding was signed between Radhika Doraisamy, Chief Postmaster General of Tamil Nadu, and K.V. Raghavalu, Chief General Manager, Tamil Nadu Regional Office of NABARD, in Chennai on Wednesday. Depending on the project's success in Tamil Nadu, NABARD will replicate the model elsewhere in the country. It was inaugurated at Karaikudi on Saturday.

The pact

As per the agreement, NABARD will bear the risk in case of default in payment. It will first give a corpus of funds to post offices, which will pass them on to local SHGs after appraising their credit worthiness. Initially, Rs. 34 lakh will be given to 116 post offices each in Sivaganga and Pudukkotai.

NABARD officials believe the default risk is very low. Out of the Rs. 270-crore worth of loans issued to SHGs last year, the repayment rate has been as high as 98 per cent. As many as 3.15 lakh SHGs are covered by NABARD in Tamil Nadu.

It has facilitated credit links between 10,000 SHGs in 12 districts. The new project aims at covering 5,000 more groups. "If the programme yields expected results, then we can look into opening other lines of credit through post offices, especially loans for farmers," Mr. Bakshi said.