This is the story of a marriage. A successful union of woman power with the power of institutional banking. In several villages of Tamil Nadu’s Kanchipuram district, otherwise famed for its Kanjivaram silk sarees, the two have come together to create a win-win situation that furthers the government’s agenda for financial inclusion.

Ask Sangeetha K. Coming from a landless family, Sangeetha and husband Kurvimalai live in Kalakattur village of Kanchipuram district and earn for the family of four by weaving silk sarees. They weave sarees in their one-room residence, for which the couple pays a monthly rent of Rs 400. “If I make three sarees – sold at Rs 4,000 a piece – in four weeks, I could earn Rs 12,000,” Sangeetha says, while showing her weaving machine which occupies two-third of the space in the one-room accommodation.

The income from one saree goes into the purchase of raw materials for the next, she adds.

A chunk of their earning, however, goes into domestic expenses, education of their two daughters, as also in repaying instalments for two loans from the village self-help group (SHG) and the government under the swarnajayanti gram swarozgar yojana.

After bearing all these expenses, earlier she couldn’t save a single penny. In fact, it didn’t matter even if she could, for Sangeetha didn’t have a bank account to set it aside.

It all changed in 2010, when the Chennai-headquartered Indian Overseas Bank (IOB) organised a camp in Kalakattur. Nearly 1,000 villagers got enrolled for the bank’s no-frills account the same day, Sangeetha being one. Now, she makes three transactions a month, and at the end of it she puts in Rs 500 in her account.

That, in short, is financial inclusion.

The power of three

That’s also woman power, of course, but it has only just begun. Now, when she has to make a transaction, Sangeetha doesn’t go to the bank; instead, she rings up fellow villager Devi, the local business correspondent (BC) for IOB. Devi, like all other IOB BCs, has been directly appointed by the bank.

Here’s the deal: immediately after calling Devi, Sangeetha alerts her neighbours, and minutes before Devi’s arrival, Sangeetha’s one-room home becomes a bank: Sangeetha and her neighbours are among a group of 2,300 clients Devi deals with in Kalakattur and neighbouring Balathottam village.

Devi disburses old-age pension (OAP) to 300 beneficiaries at their doorsteps in these two villages. She also makes payment to a few hundred Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) workers, travelling between the villages on a Scooty she bought with an IOB loan, offered at a lower interest rate (1 percent above base rate). Her monthly banking transaction at present is an average Rs 2,500, which translates to dealing with 10 customers every day.

Devi’s customers are mostly residents from the lower-income group, who normally lack enough cash flow required for savings. But constant conversation with the village women about various savings and credit schemes has yielded results – she has so far opened 10 recurring deposits in Kalakattur and Balathottam.

In the last four years, Devi says she has identified 25 SHGs eligible for loans – the groups have till date been disbursed loans amounting to Rs 3 lakh, to be repaid in three years. Not one has become a non-performing asset (NPA) thus far. Devi also helps the bank in recovering NPAs by invoking peer pressure and socially exposing the non-payers.

“There is nothing like rural delinquency here,” she says, when asked whether people intentionally falter.

Devi’s monthly income is close to Rs 9,000 – a financial boost to a family of four, which till now survived on a meagre income from paddy cultivation on two acres of land.

Devi is not alone. She is part of a troika who work in close coordination in a handful of villages in Kanchipuram district, and have humbled senior bankers sitting in IOB’s Chennai headquarters.

In neighbouring Orikai village, Maheswari’s story is very different from  Devi’s. Her husband earns a decent salary as an administrative officer with New India Insurance Bank, and her monthly take-home varies between Rs 12,000 and Rs 15,000. The couple could be called well-off in the village – but their work, and aim, remain the same: get the villagers included, and let them remain glued to the banking fold.

Having earlier worked for an NGO on health and social work, Maheswari’s job is to provide banking services to Orikai’s population of 2,000-plus as also Narapakam and Kolipakkam villages, each inhabited by less than 1,600 people and within an 8-10  km radius from Orikai.

On a typical day, customers start pouring into Maheshwari’s residence from 7.30 am. While she negotiates her daily chores around the house, her husband deals with the customers, who come primarily for MNREGA payments and general savings and withdrawal. As soon as she is out, Maheshwari takes out her handheld terminal, inserts master card into the device and authenticates herself through thumbprint. Now the machine, connected with CBS software of the bank through a GPRS connection, is ready for banking transactions.
By 8.30 am, she leaves for one of the villages on her Scooty and returns around 11 am, heading straight for the local IOB branch to withdraw money and make passbook entries. Post-lunch, she leaves for the third village and returns only in the evening.

Across these three villages, Maheshwari facilitates banking transactions for 120 customers daily. At her residence, she shows receipts printed from her handheld device: the first transaction was registered at 7.30 am and the last one at 8.30 pm in one of the receipts. The number of transactions, she says, goes up to 200 when the MNREGA workers queue up for payments.

“Imagine the load of work she has taken off the local branch,” KR Hariram, chief regional manager at IOB, Kanchipuram, tells Governance Now at his office.

Back in Orikai, Maheswari takes a printout of the performance statement from the handheld terminal connected with IOB. She has till date opened 2,181 accounts, of which 2,024 accounts are transacting. Catering to these account holders, she has transacted 42,243 times in four years. She offers pension to 450 people and MNREGA payments to a few hundred others.

Maheshwari has helped in the opening of eight recurring deposits (RDs) and is helping the bank make recoveries from  NPAs.

Recounting a recent success story, she says a middle-aged Orikai woman named Vrinda was the convener of an SHG that had taken a loan of Rs 4 lakh from IOB in 2008. By 2011, the SHG had repaid only 1.5 lakh, leading to the bank declaring the account an NPA.

Then it turned out: the SHG members had paid back the remaining 2.5 lakh but it never reached the bank.

On learning that Vrinda was the defaulter, Maheswari followed it up with her regularly: “I mobilised the SHG members and her (Vrinda’s) relatives and urged them to persuade her to pay back the amount. She wasn’t poor – her son works as an engineer in Mumbai. She finally paid the money in four instalments.”

Appreciating her active social work, the Bangalore-based Academy of Universal Global Peace conferred a doctorate on Maheswari in April 2012. 

Looking after Ayyangarkulam and Punjaiarasanthangal villages of the district is Balamani, who completes the troika. She has opened 2,000 accounts till date, of which 1,550 are transactional. She delivers payments to 188 OAP and 1,500 MNREGA beneficiaries.

In the two villages, Balamani has facilitated opening of 10 fixed deposit accounts, with amounts varying from Rs 10,000 to Rs 30,000. She has also facilitated credit of Rs 2 lakh to seven SHGs, and, like Devi, believes there is nothing called rural delinquency.

In Kanchipuarm, IOB has 83 BCs, of whom 73 are women. These BCs, says an assistant general manager working at IOB headquarters, are selected directly by local branches and there are no guidelines for positive discrimination for giving the job to women. “These women do their job passionately. They have a way with the village women, who are more committed to savings than most men,” says the IOB official.

The bank provides a regular income of Rs 4,000 a month to all BCs who have issued over 300 smartcards to customers. The bank pays commission to BCs on every credit or RD or FD accounts. They also get incentives for helping in the recovery of NPAs.

For the record, the bank’s BC attrition rate is only 2-3 percent.

These women BCs have gone beyond opening accounts and doing payments and withdrawals. The credit and loans to SHGs and individuals, though modest in number at present, is a positive sign of deepening of formal financial services in rural areas.