Transformative Contribution: SBI transforms the lives of Andhra farmers

Background
• K.S.N. Murthy – DGM Inspection, IAD – corporate office of inspection deptt, Hyderabad
• December, 2000-01
• RM of 2 districts – Mehboobnagar and Nalgonda districts – backward districts, part of Hyderabad module of Hyderabad circle for 16 months
The Initial State
• Totally rain dependent agri dependent area, grossly underdeveloped districts, dry land
• Farmers grew sunflower when it rained, mostly daily landless laborers, jobless when it is not raining
• Migrated to far off places in search of work in the off-season
• Very low standards of living
• Trapped in the clutches of money lenders.
The Proposed Solution
• Mr Murthy attended a NABARD organized 5-day sensitization program for AGMs of banks including SBI in 2000 in Tirupathi.
• Came back to the region, discussed with NABARD Hyderabad area regional office for a similar sentisitization for his BMs and Field Officers
• BMs generated ideas as to the benefits of SHGs for the bank
• Tracked how many accounts were eligible for SHG linkage: 10-100 accounts in each branch
• First targeted groups of women existing for some years because lower default rate
• Organized a meeting of all groups outlining the benefits of forming an SHG
• Conveyed message: Scheme with no corruption, no need to pay anything to any middleman
• Encouraged and enabled them to learn to at least sign their names, and not put thumb impressions
Realized End State
Customer Wins
• Activities: Floriculture, vegetable growing, trading in vegetables, fish vending etc
• Standard of living improved
• Children sent for higher education, technical education, colleges based on income generated by the SHGs
No more money lenders (who lent @36-60% rates)
Bank Wins
• Some delays initially, but good no of SHG linkages that year. #1 or 2 in the entire state of AP. Many meetings in large groups
• 98% recovery, 100% with a little bit of follow up
• Failure only where the Group Leaders misused the group’s money
• In Vizag, got PM’s Commendation Letter for similar work