In this post we are focusing our attention on the Village Bank. This wing of our Foundation has been helping many villagers quietly behind the scenes.
In fact our Village Bank is different from the usual commercial banks we are all familiar with. Its purpose is to help local villagers with small loans when they have come to a time of crisis in their lives or else to help in starting up a new small business. We charge a very low rate of interest, less than 5% per year, and we do not always enforce payment of these amounts. The loans go to villagers who are below poverty line and our staff check their circumstances as part of the process of setting up their loans.
I’d like to take you back to the first days of this unit and tell you about how we got support and funding we needed to start this service. The unit started on 10th December 2012. The main financial sponsors were Look East Australia, the Maleney Volleyball Team,, also in Australia, other individual Australian supporters and a number of people here in India. Our main aim is to give emergency financial support to the villagers. There are three staff working for the unit part time.
The loans are aimed at villagers living below the poverty line and we give preference to women applicants. Within these broad guidelines, we give top priority to those who are in financial difficulties caused by illness or medical problems. We have also offered loans for other purposes such as starting a small business, for marriage expenses, to pay for funeral expenses and to finance smallscale animal husbandry businesses.
How the bank operates
Three staff work for the PA Foundation Village Bank project. Dipak Mahato is cashier, Jaba Layek and Pinki Dhibar help the applicants to fill out the loan forms, which are used partly to check the applicants’ financial status. On the basis of this. they decide whether to offer a loan.
The maximum loan amount is rs/2500 and the minimum is rs/500. There is no time limit to repay the loan. The rate of interest is 5% per year. if we see the person is having problems in paying the interest then we usually forgive the payment.
The bank is open on two days in a week, Thursdays and Saturdays. On the first Thursdays and Saturdays of a loan cycle, we collect the applicants’ forms. On the second Thusdays and Saturdays we meet to discuss each applicant’s request. And on the the third Thursdays and Saturdays we pay out the loans.
To date we have now served 400 people, of which 100 have already repaid their loans. At present we have approximately 300 clients, of which 250 are women and 50 are men.
We can already tell many gratifying stories about local people who have take up a loan from us and have now successfully started a small business or begun to look after their family independently. Here are just two.
Case History Number 1
Kabita Kaibarta is a fisherwoman who live in Balarampur Village with her husband, two sons and a daughter. They belong to the fishermen’s caste. They were very poor. Although her husband works at a clothes shop, it was very hard for them to look after and fulfill all their family needs. Her children were trying to study and in order to continue they needed to find some extra money.
So one day she came to us and asked a loan of rs/2000 in order to start a fish business. Her idea was to buy fish at the wholesale market fish business means buying fish in wholesale market and selling them in local villages door to door. She showed strong determination in starting the business and the business was soon running well. After just one year she was able to repay the loan and began to make a real contribution to maintaining her family. We felt very pleased that our work could make a difference to one of our local families.
Case History Number 2
My name is Namita Mahato. I live in Village Dabar, near Purulia Town, with my husband and four children. My husband had been working as an agricultural labourer but we also had our own farming land which we were cultivating. Things were going well for our family.
But then one day my husband felt some pain under his knees. Day by day it got worse until it became unbearable. We did go to a doctor and he treated my husband’s leg for a long time. But there was no improvement. Since we depended on him for our livelihood we went to another, better doctor, who unfortunately had to advise us that he would have to cut off the leg just below the knee.
PA Foundation Bank helped us to arrange a successful operation. We also used another loan to start a small handicraft business making baskets and similar items. PA Foundation also arranged training for me so I can now make bamboo items. Now I am able to make all sorts of handicrafts and I sell them from village to village. Things are now running better for us as a family thanks to the help of PA Foundation Bank.
Sanjay Kumar Mahato