Date:01/08/2008 URL: http://www.thehindu.com/2008/08/01/stories/2008080151220300.htm

Tamil Nadu

Post-offices suspend new loans to self-help groups

M. Balaganessin

NABARD pilot project comes to a standstill

PUDUKOTTAI: An all-India pilot project, introduced by the National Bank for Agriculture and Rural Development (NABARD) to sanction loans to women members of self-help groups (SHGs) in Aranthangi postal sub-division in Pudukottai district, has come to a standstill, with the postal department refusing to accept savings deposits and open new account in the name of the SHGs.

The pilot project, aiming at making rural post offices one-stop shops for dispensing loans to women members of SHGs also wanted to convert the rural post offices into enablers and facilitators of rural micro finance.

The project was introduced in November 2006 after a memorandum of understanding was signed between the Postal Department and the NABARD in Chennai. As per the agreement, the NABARD would have to bear the risk in case of payment default. While NABARD allotted a corpus fund to the post-office and collected interest at the rate of 6 per cent, the post-offices were permitted to charge interest at 9 per cent.

Shortly after the introduction of the scheme in the Aranthangi postal sub-division comprising Aranthangi, Avudaiyarkovil and Manamelkudi taluks, it was planned to form a total of 232 SHGs.

A total of 166 SHGs in the district got an average loan of Rs.25,000 each, according to official sources. Even as the district unit of the NABARD had recommended the sanctioning of loans to another 24 groups, the postal department had directed the post-offices not to receive deposits from the SHGs until further orders.

“The scheme aimed at capitalising on the networking of the post-offices in interior rural areas where women members do not have access to banks. We have formed a total of 400 SHGs in these blocks. We are now shifting the SHGs to the banks for credit linkage,” says M. Kulandaivelu, Managing Trustee of the Rural Development Organisation, Arimalam, one of the non-governmental organisations forming the SHGs.

District Development Manager, NABARD, R. Anand, said that the issue was discussed at the district-level bank officials meeting when it was decided to urge the Postal Department not to dispense with the scheme.

A State-level co-ordination meeting of banking officials in Chennai would resolve the issue, he said.