Banks are now concentrating more on the rural area than before. ICICI bank alone has set up a target of Rs. 2000 cr for micro finance in rural areas. Conducive policies of the government like doubling the agricultural credit within next three years will increase bank finance in rural area. Low default rate, greater opportunities, reducing margins in other sectors, government's commitment to free the farmers from money lenders's clutches are encouraging the banks to lend more in rural areas.
Sivamma is a 36-year old woman from the Guntur district of Andhra Pradesh. She runs a small scale hair business employing 250 women who collect human hair from nearby villages in exchange for little toys for children. The collected hair is sold to a leading hair exporter based in Chennai, wherefrom it eventually goes to several western countries for fabrication as wigs and hairpieces.
It was some five years back when Sivamma approached Spandana, a microfinance initiative based in Guntur for a loan of Rs. 2000. Today, her return on investment is more than a hundredfold. She owns a cemented house, a gas connection and is also providing higher education to her two children. Sivamma does not hide her gratitude to Spandana for the enormous role it played in changing her life: "Besides being timely, these loans made me work hard, for how else I would have been able to return their installments on time? The pressure induced me to take risks which turned out in my favor. It is primarily through such continuous support that my income has gone up; I have also been able to improve my dwelling and procure a number of additional household items." |
