i nc lu s i ve f i nanc e i nd i a re port 2014
76
had expanded their BC network to perform the same tasks
and there were two such parallel networks in the region stud-
ied by them and in certain villages, two or more BCs (one
corporate and one individual) operated simultaneously.
11. More than 2.5 million beneficiaries are withdrawing their
benefits every month using Aadhaar biometric authentica-
tion. Over 75 million payment transactions had been put
through until January 2014 and Rs. 4,000 crore had been
transferred to more than 25 million beneficiaries. A scale-up
of DBT is now underway (Pande, 2014). The new financial
inclusion mission also envisages expansion of DBT under
various government schemes through bank accounts of the
beneficiaries of PMJDY.
12. More detailed findings of the research discussed below are
contained in CGAP (2013).
13. The discussion that follows is adapted from evidence pre-
sented in Microsave (2014) to the Reserve Bank of India’s
Committee on Comprehensive Financial Services for Small
Businesses and Low Income Households (Mor Committee).
14. Findings of a Microsave study reported in Kapoor and
Shivshankar, 2012.
15. Cashpor Microcredit continues to be active as a leading BC
providing loans on behalf of several banks. It also pioneered
a model of supplementary fee-based savings services which is
reviewed below.
16. The category of NBFC-MFIs was created by the RBI on
2 December 2011. NBFC-MFIs have a rural branch network
of about 10,000 branches across 517 of the 653 districts,
with over 30 million clients, of whom over 90 per cent are
women. Over 75 million loan accounts for over 30 million
borrowers are now on the databases of two credit bureaus
(Prasad, 2013).
17. RBI Circular RBI/2010-11/505 RPCD.CO.Plan BC. 66
/04.09.01/2010-11 dated 3 May 2011 on Bank Lending
to Microfinance Institutions (MFIs): Priority Sector Status.
=
6381&Mode=0
18. Based upon interview and notes provided by Mr. Srinivas
Bonam, IndusInd Bank.
19. Details of model that follow are as reported in Grameen
Foundation (2013).
20. As of 31 March 2014, a total of 1,64,514 savings accounts
had been opened for Cashpor clients of the bank that is
offering such facilities—comprising about 56 per cent of
its active loan clients. Most of these savings accounts (76
per cent) were active in that they had a positive savings
balance (Cashpor Microcredit, 2014).
21. Grameen Foundation (2013).
22. The MFI made representations to the Bank to eliminate
the onetime account opening fee and to enable the savers
to ‘earn‐back’ their transaction fee through actual deposits
during the year. However, the bank has not yet accepted its
suggestions. The savings products of another bank were more
attractive to clients, particularly in that there was no account‐
opening fee, and no transaction fee, except in cases of more
than 10 transactions per month.
23. In that sense it can be argued that this space has been created
by the unwillingness or inability of the public sector banks to
serve these clients despite their deeper and more widespread
presence in rural areas.
24. These may be contrasted with the design and rates of interest
charged to SHGs under BC models involving Stree Nidhi
and NABFINS discussed in Chapter 2. An outcome of these
varied lending channels, along with applicable interest sub-
sidies and subventions, is that loans to SHGs are available
in different contexts at interest rates that range from nil to
26+%. This has important implications for the roles that have
emerged for SHGs and indeed their own internal dynamics.
This is discussed in Chapter 4.
25. These views are taken from MFIN (2014).
26. This view was also put forward by Vijay Mahajan, noted
microfinance practitioner in an interview with the authors.
27. These and other similar BC initiatives involving SHGs and
their federations are discussed in Nair and Tankha (2014).
28. There are three types of institutions that work for social and
economic transformation in the rural community through
women. The institutions are SHG at the village level, Village
Organization (VO)—at the village which has representatives
from the SHGs of a village and Block Level Association
(BLA)—a registered society at the block level which has rep-
resentatives from the VOs.
29. The account that follows is drawn from GBA (2014), Lahiri
(2014) and other material provided by GIZ.
30. Under the BC as BF scheme CSPs are used for loan monitor-
ing and paid commissions for recovery of overdue accounts
and various types of non-performing assets mainly from the
KCCs. Besides, the CSPs market the subsidized solar lighting
system to be purchased by clients and are paid to help the
bank with the paperwork related to the loan component.
31. Refer also to discussion on CSCs in Chapter 2.
REFERENCES
Ananth S. and T. Sabri Öncü, (2014), ‘A Critical Look at the
Expansion of Banking Services through the Business
Correspondent Model: Observations from Andhra Pradesh’,
Economic & Political Weekly
, Vol. XLIX, No. 8, February 22.
CAB-CGAP Survey (2013). Financial Inclusion—A National
Survey on Functionality and Sustainability of Customer
Service Points. Available at
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Lists/Knowledge%20Bank/Attachments/142/RBI%20
Survey%20Report.pdf
Cashpor Microcredit, (2014),
Annual Report 2013–14
. Available
at
