Financial Daily from THE HINDU group of publications
Wednesday, Oct 26, 2005
Financial Daily from THE HINDU group of publications Wednesday, Oct 26, 2005 |
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Industry & Economy
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Rural Development Agri-Biz & Commodities - Agricultural Institutions Nabard prefers SHG linkage model for micro finance Our Bureau
New Delhi , Oct. 25 THE National Bank for Agriculture and Rural Development (Nabard) prefers to pursue the self-help group bank linkage programme than the Grameen bank model in assisting the micro finance disbursement in the rural areas. While differentiating between the two models, Mr S.K. Mitra, Executive Director, Nabard, said, "the SHG linkage programme is better suited to the Indian scenario and we have already laid sound foundations for disbursement of funds through the establishment of 196 regional rural banks and 336 district central co-operative banks". The SHG linkage model entails an NGO to act as facilitator between the bank and the SHG that wants to initiate micro savings through a savings bank account. It also fulfils the role as a credit intermediary. The Grameen Bank model is a more credit related scheme, where the NGO recovers the amount given out directly to the SHG and takes control of the money. Nabard has so far cumulatively lent around Rs 6,000 crore to the NGOs and other institutions as micro finance for the purpose of rural development. Mr Mitra was speaking on the sidelines of a three-day national conference "Empowering Livelihoods, State Policy, Private Initiative and Civic Actions" organised by Poorest Areas Civil Society (PACS) Programme. The Programme Director of PACS, Ms Kiran Sharma, said that it is focusing on a seven-year programme for empowering the poor by institutionalising and formalising the systems for the management of civil society organisations. With funding from the United Kingdom's Department for International Development, PACS, in alignment with the millennium development goals, has so far been able to disburse £20.5 million for project support to the NGOs and around £4.5 million for their capacity building. The presence of PACS spreads across 108 districts covering 12,000 villages in over 460 administrative blocks in six States including, Bihar, Chhattisgarh and Jharkand. Ms Kaushilya Devi, a SHG member from Maharajganj district said, "It took us some time to take the plunge, but once we did, we realised the power and the financial independence we got as a team and the ability to amend things that were functioning in the wrong fashion". The management consultants for PACS are Development Alternatives and PriceWaterhouse Coopers.
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