http://news.monstersandcritics.com/india/news/article_1236367.php/Micro-credit_people_bank_a_huge_hit_in_rural_Assam_FEATURE_
Sikharhati (Assam), Dec 24 (IANS) Until recently Muhammad Siraj Ali, a young timber merchant in Assam, had neither heard of Muhammad Yunus nor about micro-credit that earned Yunus, a Bangladeshi, the Nobel Peace Prize. But Ali, like Yunus, had always dreamt of empowering the rural poor to fight against poverty. In July, he floated the idea of a non- conventional bank in Sikharhati village, 45 km west of Assam's main city of Guwahati. In less than two months, Ali and his associates got the bank registered under the Cooperative Societies Act as the Rani Bholagaon Khudra Sanchay Bank (Rani Bholagaon small savings bank). The two-roomed bank was established on Sep 1, with a handful of villagers and just Rs.80,000 ($1,795) in deposits. 'I didn't know about Yunus and his work. It was only after he won the Nobel prize in October that I realised that our concept was similar to the micro-lending facilities of the Grameen Bank in Bangladesh,' said Ali, the bank's president. In under three months, account holders rose from 12 to 1,500 with cash deposits growing to Rs.500,000 ($11,223). 'We have for long been thinking of ways to ameliorate the socio- economic condition of the people here. A vast majority of them live well below the poverty line,' Ali said. 'Unless the rural poor are able to get banking benefits by way of small credit, they would continue to suffer from poverty and helplessness,' he added. The bank was formed with the basic idea to connect the rural masses with the economic engines by way of offering micro-credit so that they can set up businesses or generate income by other means. 'Credit is a cost-effective weapon to fight poverty and could go a long way in boosting the general economic condition of the rural folks as the poor have always been kept outside the banking orbit because they are poor and hence not bankable,' said bank manager Haren Talukdar. The unique selling propositions of this bank are trust and accountability - a person can avail of small credit without any collateral, even without operating a bank account. 'A person with absolutely no source of income can also avail of a small loan. They do not require any documents and simply need their identity verified by the village head for getting credit facilities,' said Suren Mahanta, the bank's vice-president. 'All they have to do is to assure us that the loans will be used for generating income and not just to buy food and eat,' he added. At present the bank's jurisdiction is over 100 villages, half of them tribal people officially recognised as living below the poverty line. So far the bank has awarded credit of Rs.380,000 to 60 people with sums ranging from Rs.5,000 to Rs.20,000. Jagadish Thakuria was until recently unable to get two meals a day for him and his mother. He approached the bank for a small loan of Rs.5,000 to start a pig farm. 'The bank sanctioned the loan in a matter of hours and in three months time, I am beginning to notice changes in my life,' Thakuria said. In the first week of December, he repaid the first instalment of his loan amount. 'I bought some pigs and then started selling them at a premium. This bank is a godsend to people like us,' he said. There are several more like Thakuria who have benefited from the bank's micro-lending scheme. 'I took a loan of Rs.20,000 and started a tea stall right in front of the bank. Today I am doing well. I have just repaid the first loan instalment,' said Hiren Das, another beneficiary of the bank. 'Do you think I would have ever dared to approach a normal bank for a loan?' he asked. To attract investors, the bank had kept interests on deposits half-a- percent more than most nationalised banks - at five percent annually, while interest rates on credit has also been competitive than most other financial institutions at 15 percent. 'We are definitely going to lower the interest rate on credits by at least one percent within a year,' Ali said. 'There were some apprehensions about loan recoveries. But as you know this is a bank based on trust and goodwill. And then we are already getting the loan repayment instalments in time,' he added. The procedure for opening an account has been kept so simple that people can do without the usual bureaucratic red tape involved in conventional banks. 'You don't need a photograph or any document. All you need is to get yourself identified by the village head,' the bank manager said. 'The idea is to encourage the rural poor to have an account, avail credit facilities, and also learn the art of small savings.' Nine villagers act as bank agents for collecting money from petty shopkeepers and farmers on a daily basis. 'The minimum daily deposit is Rs.10 and this scheme is an instant hit,' Ali said. 'People cannot deposit Rs.10 in any other bank.' Moreover, the bank is utilising the resources of 60 government fair price shop owners in the locality as guarantors for providing micro- credit to the villagers. 'A villager can also come to the bank for a loan if certified by their respective fair price shop owner. Since the person is known to the shopkeeper, he or she stands as the guarantor,' the manager said. 'Our target is to increase the cash deposits to Rs.10 million and offer credit to at least 1,000 people within a year,' Ali said. And by the next three years, the target is to increase the number of borrowers to 5,000 - half the number of people residing in the 100- odd villages covered by the bank. And the enterprising team led by Ali definitely wants a few tips from the progenitor of the world's micro-credit movement, Muhammad Yunus. 'We are giving ourselves a year's time and then surely we would love to visit Bangladesh and meet Yunus to learn the finer nuances of the micro-financing system,' Ali said. 'Who knows, one day this bank might get the Nobel Prize for this trend-setting initiative. Nothing is impossible if there is a will.' KOUSHIK HAZARIKA http://koushikhazarika.co.nr
