Improving Group-Based Financial Services in India
Name of project: Improving Group-Based Financial Services in India
Project partner: World Bank Rural Livelihoods Project, Society for Elimination of Rural Poverty, Government of Andhra Pradesh
Country: India
Coverage: Targeting 800,000 informal savings and credit groups
Date began: June 2008
Technology used: Mobile phones or handheld devices, hosted information system, smartcards
Services: Building credit profiles on groups and their members
Clients: Targeting 9 million members of informal savings and credit groups |
About the project
The project aims to enable real-time accounting for 800,000 informal savings and credit groups, employing groups as village-level banking agents, and building credit profiles on groups and their 9 million members.
The project is a 3-part program intended to: a) help self-help groups (SHGs) access more and lower-cost loans from commercial banks by tracking their financial strength and repayment performance through a centralized information system with field-based data collection; b) reduce the costs of banking for poor and rural people by creating 30,000 village-level banking agents; and c) open up the possibility for banks to create additional products and directly service individual customers, by gathering SHG member and transaction-level data into a ‘rural credit bureau.’
Status of project
CGAP is advising the Society for Elimination of Rural Poverty (SERP) on the overall architecture of digitized recording and reporting system. This includes the design of a system of remote rural transaction collection and the compilation of this data into a centralized database. A key consideration is how much of the project area has sufficient connectivity to support a real time online approach versus an offline solution. The project is also trying a range of computing devices from laptops to handheld smartphones for managing field based group functions. These early tests are already in the field with a small collection of SHGs and would be rolled out across the state in the future.
SERP has also recently identified 20,000 of its Village organizations who will become Business Correspondents on behalf of banks. These initial bank outlet points will focus on government to person payments, and may in time transition towards additional services.
For more information please write to us at technology@cgap.org.
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