Aug 16, 2010: Compared to the rest of the country, the progress of
microfinance in the North Eastern (NE) Region of India has been very
slow. Only 0.02 percent of total microfinance loans disbursed during
2008-09 was in the NE Region. The share of NE Region in the total no. of
existing SHGs is only 0.04 percent (NABARD, 2009).
Mr. Debobrata Das, DDM, NABARD Cachar, Assam
In this backdrop Microfinance Focus
talked to Mr. Debobrata Das, DDM, NABARD Cachar, ASSAM to know the
status of microfinance in the Cachar District and to unfold the factors
which are hindering the progress and growth of microfinance in the NE
Region in general and Cachar District in specific.
Microfinance Focus: Microfinance is an established tool to fight poverty today. What is your opinion for the same?
Debobrata Das: My opinion is that, yes, it is a tool
to fight poverty, because very poor people or the poorest of the poor
is getting financial assistance from microfinance, where as they cannot
get financial assistance from the banks and other formal sources for the
want of formalities, documentation etc. The poor people may meet their
requirement with the help of small amount of loan advanced by
microfinance and they also can save little amount with the help of
microfinance. In this process over the period of time they can elevate
themselves economically and socially.
Microfinance Focus: Can you shed some light on progress of microfinance in India and in Cachar District?
Debobrata Das: In India progress of microfinance is
in a few pockets only. Progress of microfinance is not evenly spread
across the country. Progress of microfinance is very low in the Eastern
and North Eastern part of the county. In Cachar District the progress of
microfinance is very very low.
Microfinance Focus: What are the reasons behind this low progress in Cachar District?
Debobrata Das: Presence of good NGOs
(non-governmental organization) is lacking in the district. There is no
lawful microfinance institution in the District and some organizations
are doing microfinance activities without proper license. Peopleís
mindset here is to get Govt. money and not to stand on their own feet.
Even Self Help Groups (SHGs) are mostly interested in getting subsidy.
Recovery rate is also low here.
Further institutional support for capacity building is lacking here.
There are no specialized institutions/NGOs to support capacity building
activities of the members of the SHGs. Government officials are also
responsible in a way that they are sometime telling people to form SHG
and take subsidy without properly monitoring the sustainability of the
SHG. They are simply after the number of SHG formation and subsidy
benefit of the poor; they are not accountable for the failure of SHGs
subsequently. Neither do bank officials are not providing whole hearted
support to the microfinance movement.
Bangladesh, which is very close to the State of Assam and also to the
District of Cachar, is making wonderful progress in the sphere of
microfinance but in the State of Assam and also in the District of
Cachar the progress of microfinance is very low even though there is
similarities between environment, socio-economic condition and cultural
affinity between the two places. Why this is so?
Debobrata Das: In Assam and In the District of
Cachar, people are mostly interested for subsidy oriented schemes. They
are interested to get something from the Government. Here personal care
to nurture the SHGs is absent. In Bangladesh, on the contrary,
personalized support for the members of the Group is very high. Md.
Yunus is a great force behind the success of microfinance there. In
Assam as well as in Cachar district mentoring and personalized support
is absent in the microfinance sector. Moreover, in Bangladesh,
microfinance is covered under the national priority scheme.
In Assam efforts are made for the formation of SGHs, but no efforts are
made to make the SHGs sustainable. What are your suggestions to make
the SHGs sustainable?
Debobrata Das: SHGs should gradually function as
activity based group rather than subsidy based group. In most of the
SHGs only the office bearer (President and Secretary) know the operation
of the SHG, other members do not know any thing. To make SHGs
sustainable over a long period of time, all the members are to be
empowered so that they can jointly think and take decision for the
progress of the SHG. For all the members of the SHGs, capacity building
training needs to be provided regularly.
Microfinance Focus: What are the different factors that can remove hindrance and make microfinance successful in Cachar District?
Debobrata Das: Presence of capable and dedicated
NGOs can remove the hindrance for the progress of microfinance in the
District. Proper identification and implementation of microfinance
projects for the promotion of microfinance in the district is highly
required. Moreover, Microfinance Training institute may be set up in the
Microfinance Focus: In Cachar District, apart from NABARD which other organisations are promoting microfinance?
Debobrata Das: DRDA (District Rural Development Agency), Commercial Banks and RRBS are promoting microfinance alongside NABARD.
Microfinance Focus: Please highlight the initiatives made by NABARD in the last 3 years for the promotion of microfinance in Cachar District.
Debobrata Das: NABARD has implemented SHG Promotion
Institute scheme in the district. Under the scheme it has sanctioned the
formation of 50 SHGs for Moniarkhal Youth Club, 50 SHGs to Seva Kendra
and 500 SHGs to Desh Bandhu Club.
It is imparting training for microfinance awareness in the district,
and is conducting microfinance awareness programme for different
durations, from one day to three days. NABARD is also sponsoring SHG
members to sell their products in various melas, exhibitions etc. to
increase the exposure of the members of the SHGs and thereby making them
Microfinance Focus: How many SHGs are formed by your office in Cachar District during last few years.
Debobrata Das: NABARD is not directly forming SHGs.
Therefore, it is very difficult to say which SHGs are formed by NABARD
and which SHGs are formed by others. At present there are 6973 savings
linked SHGs and 4992 credit linked SHGs are in operation in Cachar
Microfinance Focus: Are you playing any role in the sphere of financial inclusion?
Debobrata Das: NABARD is having two funds namely, Financial Inclusion Fund and Financial Inclusion Technology Fund
for promoting financial inclusion. Under Financial Inclusion Technology
Fund NABARD has given grant support to Assam Grameen Vikash Bank, for
providing banking services to the rural poor at their doorsteps through
the introduction of Smart Card and similar other services.
Through the formation of Farmersí club which is formed under their
initiatives NABARD is promoting financial inclusion. It has come out
with a policy to involve the farmersí club members as Business
Facilitator (BF) or Business Correspondence (BC) for spreading financial
inclusion. NABARD is also conducting financial literacy awareness
programme from time to time. Besides, SBI has identified 18 persons to
act as business facilitators for promoting financial inclusion in the
Microfinance Focus: Microfinance
is also focusing on micro-enterprise development. Whether NABARD is
taking any step for micro-enterprise development in Cachar District.
Debobrata Das: NABARD is conducting micro-enterprise
development programme for matured SHGs covering different activities.
In Cachar District also MEDP may be conducted for the matured SHGs.
In Cachar District, some people think that formation of SHGs under
NABARD is not beneficial; rather formation of SHGs under DRDA is
beneficial, what is your opinion for the same?
Debobrata Das: Formation of SHGs under NABARD is a
misconception. NABARD is not directly involved in SHG formation. It is
assisting NGOs for formation of SHGs. NABARD follow the system of
development through Integrated Income Generation Activity (IGA), where
as DRDA follow subsidy based approach. Here the mindset is to get
subsidy that is why people like DRDA lead SHG formation in Cachar
Microfinance Focus: Which factors in your opinion are hindering growth of microfinance institutions in this region?
Debobrata Das: There are a few reasons which are
hindering the formation of good microfinance institutions in this part
of the country. Poor communication and connectivity is one such factor.
Roads are in very bad shape which is hindering smooth movement of people
and microfinance activists. Repayment ethics which is crucial for the
success of microfinance is very poor in this part of the country,
moreover personal contact and support for the promotion of microfinance
institutions is lacking.
Microfinance Focus: For
the development and growth of microfinance in Cachar District, what
collaborative work NABARD and Assam University can take up in future?
Debobrata Das: Assam University and NABARD can
jointly conduct training programme for the members of SHGs/ NGOs/
Anganbadi workers/ and bank employees. Trainers Training Centre can
function under the guidance of the University with necessary financial
support by NABARD. Collaboration may also be made with other
organisation for financial and other support.
Microfinance Focus: With Microfinance Focus, we are trying to promote the best practices in this sector. Do you have any specific suggestion?
Debobrata Das: Publication may be tries in the
regional language, as most of the SHG members are poor and less
educated; therefore, the best practices can only be replicated when the
people will be able to understand and feel it. Circulation of the
magazine may be increased. Different stakeholders of microfinance must
know about the magazine and about its publications.