Bridging the Gap . Poor and Banking system
One who earns less than $2 per day is categorised as poor as per UNO standards. India subcontinent is house to 50% of the total poor population of the world and India in Particular has around 30 crore people below poverty level. Social scientists categorise poor through various parameters like urban poor, rural poor. Nomadic tribes, backward classes etc , All the social scientists believe that one of the major reasons of poverty is dissconnection of poor from banking system.
Due to dis-association of poor from formal banking system they rely on local money lenders for there unforseen needs. Local money lenders charge exorbitant rate of interést and from here starts an vicious cycle from which poor never come out. In most of the cases poor are never able to repay the principal amount.
If we analyse poverty alleviation program of Bangladesh, which rely on providing small credit to poor people for starting ventures of there own choice. Grameen has been able to plug the gap and provides readz credit for poor they no longer need to rely on local money lenders for finance. Some times rate of interest charged by banking institutions is quite high but it is always less than the rate charged by Money lenders.
In india financial institutions have also started giving credit to poor through SHGs and Microfinance institutes. NGOs have to play a pivotal role in bridging the gap. Depending on the section of the society which each NGO works , NGOs must devise a strategy to make credit available to poor.
Akhar-Soh started a pilot project, we need to broadbase the approach and define the contours of the Plan. In last couple of Months we have made it mandatory for all the employees from the marginalized community which we serve to have bank accounts . We have allready extended it to akhar scholars, three out of five akhar scholars have there own bank accounts.
In next phase we shall target that all the students above 10th standard shall have there own bank accounts and money for there educational expenses shall be transferd to the bank accounts of each student. This approach will serve following purposes
1. Students will learn how to open bank accounts, how to operate them. As the money for there studies will be transferd to there accounts they will have to operate bank accounts. There interaction with outside world will increase. Once we have people trained in opening and operating bank accounts , we can utilise there services for opening bank account of all the people in Dera.
We can also make it a policy that whosoever wants any help from Akhar shall have his own bank account. People often need financial help and this check will motivate many people to open there bank accounts.
2. Transfering Money directly into the bank accounts serves many purposes.
1. It helps in tracking the amount transferd.
2. Prepearing balance sheet is easier and in case any one questions any entry we can always track the payment.
3. Sending Money directly makes students responsible for the money. They will learn how to use money. They will feel empowerd I remember when my dad gave me money and asked me to make payment to Kiln owner, it was a sense of being in control, sense of responsibilty and sense of being part of system.
An Empowerd youth is the most potent Weapon on earth
There are some drawbacks also we can always have checks to determine money is spent properly.e.g. We shall not transfer payments of current month unless previous month bills are not recieved by Akhar office.
Akhar office bearers will have to do some extra work and administartive expenses will also increase but looking at the long term benefits we shall go for it.
Due to dis-association of poor from formal banking system they rely on local money lenders for there unforseen needs. Local money lenders charge exorbitant rate of interést and from here starts an vicious cycle from which poor never come out. In most of the cases poor are never able to repay the principal amount.
If we analyse poverty alleviation program of Bangladesh, which rely on providing small credit to poor people for starting ventures of there own choice. Grameen has been able to plug the gap and provides readz credit for poor they no longer need to rely on local money lenders for finance. Some times rate of interest charged by banking institutions is quite high but it is always less than the rate charged by Money lenders.
In india financial institutions have also started giving credit to poor through SHGs and Microfinance institutes. NGOs have to play a pivotal role in bridging the gap. Depending on the section of the society which each NGO works , NGOs must devise a strategy to make credit available to poor.
Akhar-Soh started a pilot project, we need to broadbase the approach and define the contours of the Plan. In last couple of Months we have made it mandatory for all the employees from the marginalized community which we serve to have bank accounts . We have allready extended it to akhar scholars, three out of five akhar scholars have there own bank accounts.
In next phase we shall target that all the students above 10th standard shall have there own bank accounts and money for there educational expenses shall be transferd to the bank accounts of each student. This approach will serve following purposes
1. Students will learn how to open bank accounts, how to operate them. As the money for there studies will be transferd to there accounts they will have to operate bank accounts. There interaction with outside world will increase. Once we have people trained in opening and operating bank accounts , we can utilise there services for opening bank account of all the people in Dera.
We can also make it a policy that whosoever wants any help from Akhar shall have his own bank account. People often need financial help and this check will motivate many people to open there bank accounts.
2. Transfering Money directly into the bank accounts serves many purposes.
1. It helps in tracking the amount transferd.
2. Prepearing balance sheet is easier and in case any one questions any entry we can always track the payment.
3. Sending Money directly makes students responsible for the money. They will learn how to use money. They will feel empowerd I remember when my dad gave me money and asked me to make payment to Kiln owner, it was a sense of being in control, sense of responsibilty and sense of being part of system.
An Empowerd youth is the most potent Weapon on earth
There are some drawbacks also we can always have checks to determine money is spent properly.e.g. We shall not transfer payments of current month unless previous month bills are not recieved by Akhar office.
Akhar office bearers will have to do some extra work and administartive expenses will also increase but looking at the long term benefits we shall go for it.
Comments
But the "Sikligar Bank" we'll have to think also for our future endeavour , may be this will be a new concept but will prove to be a big success for our singhs
We have to make people understand the value of having bank account and savings.
By opening an account there association with the bank starts and later on when any one wants loan it becomes easier for him to get loan from bank. As he is known to bank account. That waz credit worthiness of the person also increases.
There is special scheme for people below poverty level through which thez can open bank account with zero balance.