lending a helping hand

Around two-thirds of Indians do not have access to the banking services. Globalisation opens up huge business opportunities to the Indian banks-some are having global strategies, some are increasingly opening offices in foreign lands, yet a very large segments of our population are still starved of basic banking services. According a study, only 20.8 per cent of households in rural areas and 15.3 per cent of households in urban areas reported cash borrowing from any sources during 2002-03. Even smaller number of people finds it enjoyable to park their saving with banks. This situation had an overaching influence in giving birth to and creating a work niche for Creditwatch, a unique organisation in the country that works for creating space and giving voice to the poor in operational policies of Indian Banks. We have been contributing very significantly to our objective by adopting both demand side and supply side intervention roles of the following types during the last one decade:

• Advocacy for improving credit access

• Financial literacy programme for the poor

• Business development programme for self employment

• Market and Research Surveys on credit access, agricultural practices, rural development

• First rate micro finance training to (nearly 350) NGOs, (100) Block Development Officers and (120) SGSY group leaders

• Soft skill training and credit delivery design to Micro Finance Institutions and development agency staff.

Our role in Poverty alleviation and self employment programme

In recent years, State Governments have been reorienting more and more of their poverty alleviation and youth self employment programmes in favour of credit funding along the subsidy. However the results of credit-subsidy based programe are mixed. Even the optimistic estimates say that not more than one-third of the sponsored cases gets bank loan support. While implementing governments agencies blames the risk averting mind set of banks, banks seems to be worried about the doubtful quality of the sponsored cases. Creditwatch can come forward with its well tested intervention tools to bring banks closer to the primary stakeholders of scheme beneficiaries and the secondary stakeholders of grass root state government agencies.

Special Strength of Creditwatch

We are eminently suited to play a positive intervention role to improve credit access to the beneficiaries of sponsored cases because of the following factors:

1. An exclusive focus on poverty alleviation through improving access to financial services in general and credit in particular

2. The promoter and the supporting staff are all ex bankers having experience of working in Eastern & North eastern states in senior capacities

3. Strong expertise in training of staff and beneficiaries in human resource development, financial management and entrpreneur development sector

4. Shares common mission with banks in spreading banking services among the poor.

Our intervention tools

Our intervention strategy usually takes a holistic view of all factors that facilitate a positive credit decision by branch mangers in the context of the specific social and economic infrastructures of a region. Broadly, following are the important components of such intervention:

1. Capacity building for core competence needs among the borrowers that are required to be satisfied for improving credit performance

2. Providing timely and effective counseling and escorting, services to the beneficiaries during period of credit use

3. Negotiation with local banks for successful credit decision in favour of beneficiaries

4. Wide dissemination of success stories among banks, public organisations and government agencies

People behind planning our intervention strategy

We have the benefit of services of best talents available in the field of economics and banking. Following well known personalities will provide their expertise and experience in designing intervention strategy:

Dr. Pradip Har, Founding Director, had been a senior officer of NABARD and was in charge of northeastern states and Principal of Regional Training College at Bolpur, West

Bengal before starting Creditwatch. He has been active in the area of banking education and training and advocacy for several years.

Dr. Rajesh Chakrabarti is associated with the School of Analytical Finance at ISB, Hyderabad. He taught at Georgia Tech’s College of Management, Atlanta, USA. He is a scholar at CII’s India Development Foundation and has previously taught at IIM, Calcutta and at the University of Alberta, Canada, been a Visiting Scholar at the Federal Reserve Bank, Atlanta, USA

Implementation of the project will be responsibility of a dedicated residential team

of ex-bankers.

What is next- Partnership with State Government

We share with state governments a mission of making credit available to the poor.

We are inclined to enter into partnership with the government nodal agencies in implementation credit-subsidy based poverty alleviation and youth employment programme.

Terms and conditions of partnership

To select in each district, in consultation and active support of DRDC and other nodal departments, SGSY groups awaiting grade II rating and beneficiaries sponsored under youth self employment schemes.

To impart three-day training course on Wreen Siksha(Credit Management Course) and enable them to acquire skills and knowledge on financial and credit management, credit negotiation and loan repayment.

To prepare report card on each of the selected groups/beneficiaries and give feedback on their creditworthiness to help banks make positive credit decision.

To monitor income generation process of and escort beneficiaries, during the first six months after they get credit.

To provide six monthly feedback to DRDC, other nodal agencies and banks on income generation trends and credit status of the participants.

State Government sponsored Credit management course