Pandyan Grama Bank Model

Group-6
Augustine Kartikeya Nayan Paritosh Pawan

Agenda
Some facts about the bank Objectives, Functions Strategy Impact of microfinance SHG winning stories Sense of social upliftment Sharing the griefs Milestones & Objectives achieved Reasons But, everything is not so easy Criticisms and Suggestion

Known-Unknown
Public sector scheduled bank under Regional Rural Banks Act 1976. Established on 9th March 1977, Head Quarters at Sattur, then shifted to Virudhunagar, Tamilnadu state in South India. Issued and Paid up Share Capital is Rs 1Crore, held by Government of India (50%),Government of Tamilnadu (15%) and Sponsor bank - Indian Overseas Bank (35%).

 Management expertise by IOB Operations

15 Distt 213 Branches 5 Regional offices 985 Employees

Continuous record of Profit. Total Reserves exceed Rs 186.23 Crores.

Objectives
The Primary objective of the Bank is to finance farm & non-farm sectors and other employment generation programs. To empower rural womens. To meet the varied requirements of the discerning investor To promote/generate additional employment in rural areas through credit.

Functions
Creating self help group. Poverty alleviation program like IRDP,MAPP, & TAHDCO schemes. Cater to the financial needs of the rural people.

Strategy of PGB
Lending Strategy
Six months in convening regular meetings Keeping the records Maintenance of records Utilization of group saving & recovery thereon Grading of SHGs by official Group members also covered under various insurance schemes by LIC. Eligible groups recommended for assistance SGSY Children's of the members benefitted with scholarships

Impact of micro-finance on Banks profitability

Transaction cost minimized Improvement of credit portfolio and profitability Good recovery rate Loss-incurring branches turned the corner

SHG winning stories

Took plot a land on lease & took up floriculture. Purchased a power tiller & started hiring it out Started departmental store. Contract business Handicrafts businesses, SSI & Xerox centres

Sense of social upliftment

Eradication of liquor menace Transportation assistance Drinking water assistance Childrens education

Sharing the griefs

Consolation meeting in bad phase Relief material mobilized

Milestones
Deposits crossed Rs 2497 Crores Credit crossed Rs 3275 Crores Operating profit of Rs 66.83 Crores Achieved a recovery percentage of 96 % Disbursed a sum of Rs 4058 Crores during April to Mar 2012 for various farm & non-farm activities. Opened 10 New Branches NABARD has awarded "A" rating to PGB for the performance. Bank is Corporate Agent of LIC of India and United India Insurance Company, the first RRB.
Source:-Bank website (http://pandyangramabank.in/home.asp)

Objective Achieved
NABARD approved PGB to act as a SHG promoting institutions The bank so far has lent to 1,15,194 self help groups involving Rs 819.81 crore. It has also issued 3,86,034 Kisan credit cards involving Rs 615.63 crore Winner of Best performance award from NABARD Recognized as a Model Institution by NABARD for hosting Exposure visits on SHGs.
http://www.thehindubusinessline.com/industry-and-economy/banking/pandyangrama-bank-to-open-atms-17-more-branches/article4256192.ece

Reasons behind all this

Close interaction among the members. Unity and collective efforts in their aims (or) goals. Financial independence Greater awareness about useful skills and various government programmes Arresting alcoholism in their localities Eradicating the usurious transaction in their villages Awareness about legal marriage age, remarriage, child marriage, dowry, etc.

Everything is not so easy

Default in loan repayment Marketing problem Availability of raw materials Unskilled labour Force Entrepreneurs development programme

Source:Report by Fisheries College And Research Institute, Performance Analysis of fisherwoman SHG in Tamilnadu

Criticisms against microcredit

They are offered as the solutions or panacea to eradicate poverty. Poor are asked to look after themselves. Coercion and high rate of interest exist It does not serve the poorest of the poor who remain the unreached. About 95 % SHGs in India are women and men are left out not by the MFIs but by men themselves who are responsible for very limited success men SHGs. But, the microcredit availed by women, reaches such men who often misuse it and the repayment burden rests on women only. NGOs are illegally engaged in mobilizing money from the public or distributing their loan money in the garb of microcredit to the rural poor. SHGs movement is being politicized and run the risk of being hijacked by politicians. Source:Report by Fisheries College And Research Institute, Performance Analysis of fisherwoman SHG in Tamilnadu

Suggestion for future micro-credit delivery

Microcredit interest rate should be reduced. Loan repayment instalment term should be increased. Flexibility in loan repayment to suit change in their occupation structure and varying levels of income and savings. Providing subsidy loan for fisherwomen SHGs for innovative projects. Providing self employment loan for individual SHG members. Providing marketing facilities to the SHG products (Proper marketing channel could be arranged by the Government (or) NGO (or) private institutions). Providing self employment training to the rural people.

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