Reach out to small borrowers, call participants

A THREE-DAY consultative workshop on ?micro finance?, organised jointly by Access Development Services and SIDBI, commenced at Hotel Noor-Us-Sabah Palace here on Wednesday.

india Updated: Nov 23, 2006 18:15 IST

A THREE-DAY consultative workshop on ‘micro finance’, organised jointly by Access Development Services and SIDBI, commenced at Hotel Noor-Us-Sabah Palace here on Wednesday.

Discussions were held towards drafting of a State vision paper on the subject. The main thrust was to ascertain the current status of the micro finance (MF) scenario and develop a vision statement and strategic plan for the sector in Madhya Pradesh.

Inaugurating the session, Agriculture & Cooperatives Minister Choudhary Chandrabhan Singh emphasised on increasing credit linkage to SHGs and developing alternative livelihood option for the target groups.

He assured Government support in achieving the goal. Former chief secretary and chairperson of Mahila Chetna Manch, Nirmala Buch, said the financers need to understand the difficulties of the borrowers, who are usually from BPL families and train them to manage and access credit facility.

“The entire MF functioning should be people-oriented and within an ethical framework, along with social mobilisation,” she held. Stating that MF institutions should not be clones of commercial banks, Buch said micro-financers should apprise borrowers with the fine prints of credit system and keep values of small SHGs in mind.

“MF institutions, instead of just limiting themselves to commercial viability, should look for social obligation and grow slowly and steadily. Instead of charging flat rate of interest, it should be on declining manner,” she suggested.

Speaking on the Government’s role and various schemes towards providing livelihood, Rural Development secretary A S Ahlawat said as the earlier Integrated Rural Development Programme (IRDP) had failed to achieve desired result, the Union Government in April 1991 introduced the Swarna Jayanti Grameen Swarozgar Yojana (SGSY), which emphasised on providing credit to groups, unlike individuals in the past. “It has minimised the risk of recovery failure and is benefiting a larger section,” he pointed out.

He said though there was no dearth of funds, there was a severe lack of skilled manpower which failed to bring effective results. Madhya Pradesh ranked first among all states in forming the largest number of SHGs (around 4 lakh).
The State Government, during the past two years, has effectively formed SHGs based on BPL survey. “We’ve instructed village panchayats to include at least one member from each rural household in SHGs,” Ahlawat added.

Access vice-president Bharat Parekh said the workshop was open to suggestions from participants, which would help in redesigning of schedule and a strategy document to reach the final vision. “A series of workshops should be held and a committee on reviewing be set up,” he suggested.

During the interactive session, while, Sambhav’s director Dr S K Singh said SGSY scheme could not be ignored in poverty alleviation, Pradeep K Ghosh of Oasis inquired whether any mechanism exists in monitoring of fund-flow vertically down.

“There has been a substantial increase in the flow,” replied Ahlawat, adding that as per SGSY guidelines the subsidy amount was paid after the loan portion, as a reply to the issue raised by Dewas-based NGO P Rao on bank-end subsidy.

State Bank of India’s assistant general manager (Agri-Business) S Chakraborty said there lies a confusion that rate of interest charged by banks is the cause of miseries, contrary to other factors respnsible. “SBI lends upto Rs 2 lakh to SHGs at 8.5% & 9% interests only and the need is to provide service at the door-steps of SHG borrowers,” he added.

First Published: Nov 23, 2006 18:15 IST