Robin Hood Tantya Bhil (Tribal) Self Employment Scheme in Jeopardy: Banks Sensitization a Must
A Typical example
where a Well Designed Tribal Welfare Scheme meets a Roadblock due to Bankers Apathy and Unwillingness to take Business Risk
Tribal in Madhya
Pradesh
Madhya Pradesh is the second largest state in India with the
distinction of having largest tribal population. The population of Tribals in Madhya
Pradesh is 12.233 million constituting 20.27% of the total population of Madhya
Pradesh (60.385 million), according to the 2001 census. There were 46
recognized Scheduled Tribes and three of them have been identified as “Special
Primitive Tribal Groups” in the State.The Scheduled Tribe population in the
State is overwhelmingly rural, with 93.6 per cent residing in rural areas. At
district level, STs have returned the highest proportion in Jhabua district
(86.8 per cent) followed by Barwani (67 per cent).
Self Employment
Scheme for Tribal
Being a welfare state, the Government of MP has recently
introduced ‘Tantya Bhil Swarozgar Yojana’ (Self employment scheme) for tribal
youths. The scheme is supposed to be implemented through banks where the Government provides a 30% subsidy and a Guarantee to the Bankers as regard Returning the Loan. Under the
scheme, loans worth Rs. 50,000 to Rs. 2.5 million or more shall be provided to the eligible tribal youths towards creating self employment opportunities.
Under Tantya Bhil Swarozgar Yojana, the State Government also provides a 30 %
subsidy, subject to a maximum of Rs. 3 lakh and a 5% loan interest subsidy.
Besides, fees and service tax, Guarantee will also be given by the State
Government. A target has been set to benefit 5000 tribal youths under the
scheme during year 2013. A scheme that shall provide employable opportunities to other tribal in the belt.
Bankers Apathy
The fact that bank guarantees are being provided by the GoMP
has failed to impress upon the bankers who are unwilling to lend a helping hand
to the target population. It is a well known fact that the recovery rates amongst
the bottom of pyramid as micro finance / credit are much higher (almost 99%)
than the usual NPAs that banks have with the middle and higher income clients
including corporate. Yet, the bankers are unwilling to learn from the Self Help
Group (SHG) and Joint Liability Groups (JLG) and are not ready for loans to be
distributed under the scheme as they consider it a ‘High Risk’ game. For the
bankers, it is perhaps more difficult to devolve the guarantee on the State rather
than recovering from the tribal. In a typical case of Indore district near
Jhabua district, there were 250 applications under the tribal scheme for loan
of which 74 have been approved by the Tribal Department for loan by bank and
subsidy (30%) by the GoMP, and yet Only One Single Applicant has been fortunate
enough to get the loan processed by the Bankers.
While there is a complete synchronization between the GoMP
and the bankers in MP as regard the MP Financial Inclusion model called, ‘Samruddhi’
– Prosperity (at the Bottom of Pyramid), and the system is working well for all
G2P payments and bank accounts being opened at the doorsteps of the community,
the apathy of the bankers towards increasing their business risk by lending
under the scheme is highly regrettable and unfortunate. A dialogue between the
bankers and GoMP on one hand and GoMP and district administration including the
tribal department should be immediately initiated so as to resolve such
deadlocks. The state level bankers would do well to instruct their subordinates
and specially at the district level to ensure that the schemes of the
Government reaches the poor tribal seamlessly and offer them all possible
helping hand towards credit and asset generation.
Samruddhi Penetration Flaw
The Samruddhi (Prosperity)
model opens an opportunity for every citizen of MP to have their own banking
and financial identity. It facilitates an increase of money supply in the
ecosystem and hence serves a great opportunity for the state to achieve
financial deepening that usually refers to the improvement or increase in the
pool of financial services that are tailored to all the levels in the society.
This would typically precipitate an increase in the ratio of money supply to
GSDP / Other price index which ultimately postulates that the more liquid money
is available in the economy, the more opportunities exist in that economy for
continued and sustainable growth. The G2P services under the Samruddhi model
creates liquidity in the ecosystem while offering SCRIPT (Savings, Credit,
Remittances, Insurance, Pension and Term Deposits) as financial products could
serve the poor in different manner including covering the risks of death
(Insurance), longevity (Pensions), unemployment (deposits and savings) etc. However, such roadblock and stopping stones provide a setback to noble initiatives of the Government.
As mentioned in another blog of mine, financial inclusion is
incomplete and meaningless without the ‘teachable moments’ of financial
literacy and capacity building at the BoP. The real success of Samruddhi model
in MP shall be known only in due course of time as the model is still in its
initial stage and yet to reach maturity. However, the model is based on solid rock
foundation and follows the global best practices that could be replicated and
scaled across the country with greater political will of the governments. The apathy
of bankers such as cited above shall only create a bad name for the Samruddhi
model and hence corrective action should be taken up immediately. Best Wishes
to GoMP, The Tribal Department and May Better Sense Prevail to the Bankers to take the Samruddhi Model Marching Forward.
