FOUNDATION ANNOUNCES KUALA LUMPUR MEETING Project to be evaluated at Second Regional Workshop in July Banking with the Poor (BWTP) is to be evaluated at a meeting in Malaysia over the period 6-10 July. BWTP began at a workshop in Manila in May 1991. There commercial banks and NGOs from eight Asian countries pledged to cooperate in a program of action research, aimed at providing "microcredit" to finance the productive activities of the poorest of the poor. FDC Executive Director John Conroy reports that each country has now produced a detailed case study, based on experience of the linkage between banks and NGOs, and that the time has come to evaluate these case studies. The workshop is supported by grants from the Asian Development Bank, AIDAB and UNDP. Participating banks and NGOs will meet in Kuala Lumpur to consider a draft report on BWTP, prepared by the Foundation as a synthesis of eight country case studies. They will be joined by representatives of major organisations active in supporting poverty alleviation (including the Asian Development and World Banks, UNDP, AIDAB, and the Asian-Pacific Development Centre, in whose headquarters the workshop will be held). Plans for expansion With an eye to the possible expansion of BWTP to new countries, FDC has invited observers from Indochina and the Pacific to attend the Kuala Lumpur workshop. They include a representative of women's credit groups in Papua New Guinea and a central banker from the Solomon Islands. Two Cambodian women active in community reconstruction will participate, together with delegates from Vietnam and China. These delegates will be asked to consider the relevance to their countries of the methods and philosophy of BWTP. Expected outcomes FDC Vice-Chairman Bill Taylor will chair the Kuala Lumpur workshop. He believes the meeting will come to firm conclusions about the usefulness of linking banks with NGOs to extend the reach of bank credit to sections of the population previously considered out of reach because of their poverty. Taylor expects firm recommendations will emerge to shape the policies and guide the actions of key actors in this process. These include commercial banks and NGOs, Third World governments and their central banks, and multilateral agencies and international financial institutions. Bilateral aid agencies, such as Australia's AIDAB, will be a particular target of the workshop's recommendations. Readers of BWTP Newsletter can expect to hear more of these recommendations, once they have been formulated. The Report on BWTP will be published with World Bank financial support. A Programme of Vysya Bank for Empowering Rural Poor S.R. Rannorey, Faculty member, Staff Training College, Vysya Bank Not withstanding the commendable progress achieved by the banks in reaching out to the rural areas, quite a big section of the rural population, particularly the poor, is outside the ambit of formal credit institutions. Given an opportunity they would like to come out of the poverty-trap to lead a decent living. In some parts of the country, some voluntary agencies have formed "Self-Help Groups" (SHGs), in the villages, with the idea that whenever a homogenous group of people share an environment together, they are bound to take up activities jointly for the welfare of the whole group. Recognising merits of this approach, our Bank has taken a lead in evolving a new programme of assisting such SHGs formed by voluntary organisations. We may also establish SHGs on our own in the pattern of voluntary organisations. This approach has resulted in the birth of our "Swayam Vruddhi" programme. What is the Rationale behind this Programme? Our aim is to see poor people live with dignity, sufficiency and responsibility. We believe that the poor are bankable and the poor themselves are likely to have better appreciation of their socio-economic situation. This thought made us to initiate our efforts in bridging the gap between poverty and prosperity by establishing linkages with the SHGs. The objectives of this programme in brief include inculcating the habit of thrift, banking culture in availing financial assistance for productive purposes and repaying the same to facilitate the process of gaining economic prosperity, and also acquiring collective wisdom in financial matters for organising and managing their own finances so as to distribute the benefits amongst themselves. This also provides scope for developing entrepreneurial abilities amongst the most downtrodden/neglected section of people. What are Self-Help Groups (SHGs)? Self-Help Group is a voluntary association of persons formed democratically without any political affiliations but with common interests. The main objective of the Group is to improve the economic and social status of the members vis-a-vis their needs and interests. While the Group's activities are of multi-purpose, they would have a special focus on thrift and credit management. Although unregistered they would function within the framework of an informal set of by-laws formed by the members themselves. These groups distinctly differ from the existing Co-operative Societies where heterogeneity is a common factor. These SHGs will have members ranging from 10 to 25 in number. Initially, we have launched this programme through our Bangarpet Branch in Mudugooli Village of Kolar District, Karnataka in the presence of Mr K. Bill Taylor, Vice-Chairman, Foundation for Development Cooperation, Queensland, Australia. Our Chairman, Mr Ramesh Gelli, lighted the lamp in the village signifying the light that our bank would be providing in the lives of villagers to move from the vicious circle of poverty to a virtuous circle of prosperity. We have started establishing linkages with the SHGs formed by MYRADA (Mysore Resettlement And Development Agency), a voluntary organisation in Chitradurga, Kolar and Mysore districts of Karnataka State, Ananthapur District of Andhra Pradesh and Dharmapuri district of Tamil Nadu. These linkages can also be established with other voluntary organisations, wherever they have established such SHGs. Indeed, considerable momentum for building the linkages between the SHGs and the formal credit institution has been generated under the aegis of Foundation for Development Cooperation, Australia, during the workshop organised and sponsored by the Foundation at Manila, in May, 1992. Representatives of World Bank, Asian Development Bank and other international organisations, senior executives of major banks and leading non-government organisations from Asia attended this workshop. The honour of attending this workshop from India was bestowed on our Chairman, Mr Gelli. What can you do? Those branches having no accessibility to voluntary organisations can also form the SHGs on their own in their service area on the pattern of voluntary organisations and meet its objectives. How to go about and other details are given in brief here. How to form Self-Help Groups? Identify the poorest of the poor people in the service area and while identifying the poor, emphasis should be laid on the homogeneity, in terms of socio-economic status, specific economic activity and people having almost similar problems and needs. Mostly the beneficiaries belong to socially and economically backward classes more vulnerable to natural calamities, and for whom the formal credit system is not accessible. Their needs generally are for consumption, or even production purposes. The selected beneficiaries are to be grouped in small size i.e. 10-25 members. Such Groups can comprise women, men or mixed. Activities of these Self-Help Groups In the initial stages these Groups should be educated in terms of social needs, health, adult literacy, etc., towards identifying their problems and finding solutions to do their own problems by themselves. Initially it is most essential to establish the credibility of the 'change agent' (bank) with the client system. Only after establishing the commitment and observance of cohesiveness of the group, the loaning activities should be undertaken by the branches. The groups should be allowed to form their own by-laws. We intend to quote some of the points, which can be taken care of while forming the groups and establishing the by-laws.
We reiterate, that only after the observance of cohesiveness of the Group, can loaning be made for income generation and asset creation activities. Some DOs and DONTs
Looking Ahead : This is a bold venture taken up by our bank. If we are to be true to our vision of seeing that everybody will have the full benefit of life, we must look beyond the routine and demonstrate God's love through service to the community. Come, let us join and empower the grass-roots of our economy to move from poverty to prosperity. Excerpted from "Pragathi", House Magazine of the Vysya Bank Ltd, July-Sept 1991. |