Dr Nita Mukherjee describes the work of an NGO promoting financial literacy among Mumbai’s slum women
To meet Preeti Telang, head social initiatives of Swadhaar FinAccess (SFA) at her office, you have to walk almost sideways in a small by-lane of Kherwadi (Mumbai) through the slums that lie between the Bandra Terminus of Western Railway and the Western Express Highway and go up a rickety staircase and jump over several uneven floor levels. But the buzz and the bustle that you notice once you reach there, establishes beyond doubt the commitment of the group working for the cause of financial literacy among the women of Mumbai’s slums.
Says Preeti, “This is our work area and we chose to operate from where our target audience can have easy access to us and feel at home in approaching us.” Swadhaar FinAccess, a non-profit Section-25 company was started by a group of high-profile women with long years of experience in the financial and development sector (including Veena Mankar and Haseena Vahanvaty) in 2005 when micro-finance had become an accepted tool of financial inclusion. The term Swadhaar means self-support and reflects SFA’s objective of “helping its clients improve their financial circumstances—to achieve self-reliance, to increase their income generating potential and to ensure that they are able to meet their daily consumption needs.” Reducing the vulnerability of the urban poor to usurious moneylenders, increasing their income-generating & saving capacity and bringing their knowledge up to a ‘bankable’ stage are the areas that SFA works on. Once the women reach that stage, SFA helps them open ‘no-frills accounts’ with banks like Citibank, State Bank, Syndicate Bank, etc. So far, 643 such accounts have been opened for the ‘graduates’ of SFA’s training programmes.
The tool used by SFA is financial education. Preeti says, “It ensures that women not only gain credit, but also the ability to spend it wisely. Working with the slum communities in Mumbai, we have learnt that indebtedness is not only caused by lack of money but also by lack of knowledge. Women need familiarity with financial concepts, new attitudes about savings, and better skills in money management.”
SFA’s financial education programme also serves the networking purpose—absolutely essential in extension learning. Training programmes help build solidarity, give them an opportunity to interact and, through a process of collective learning, find solutions to their problems. Preeti says that they choose one working woman per family and the target age group is 25-50 years. So far, all the learners are married women with children—this profile helps spread financial literacy to extended families and the community as well.
Preeti’s forte is designing and developing communication strategy. Each learner is given a diary called ‘paise ki baat—paise kaise bachayen, kaise badhayen…’ (‘money matters—how to save money and multiply it…’). The diary has simple entries for home budgeting. SFA’s trained staff evaluate the learners on their home budgeting and account-keeping tasks that are set out in the diary. Until March 2010, around 1,500 women had completed the course offered through some 80 training programmes.
According to an external impact study conducted in 2009, the retention of attendance was as high as 86%. There is no formal examination but a certificate is issued and an identity card is given to enable the women to open a bank account. SFA has its outreach offices at four locations in Mumbai, namely, Kherwadi, Chembur, Malad and Andheri.
After the promoters of Swadhaar received the licence from the Reserve Bank of India to operate as a non-banking finance company providing micro-finance, SFA’s operations are restricted to financial literacy, savings and livelihood development programmes. The micro-credit portfolio has been transferred to a new company called Swadhaar FinServe Private Limited. SFA now depends mainly on donations and volunteers; it has tax-exemption under Section 80-G.
Aptech has appointed former Barclays Bank executive Easwaran Krishnan as the new head for human resources
Learning solutions provider Aptech Ltd has said that it has appointed Easwaran Krishnan as the head for human resources.
As a new member of Aptech's HR team, Mr Krishnan will direct the company's human resources functions to ensure that they “align with the company's goals and objectives,” Aptech said in a release.
Mr Krishnan, with corporate experience of more than 15 years, was working with Barclays Bank PLC in Mauritius, as the head of HR for the retail and commercial bank.
Various banks have indicated that they may not pass on the increased cost to borrowers—due to the RBI’s tightened monetary policy—immediately, as liquidity still remains sufficient in the system
Retail and corporate borrowers can breathe easy as bankers today said that an immediate hike in lending rates is unlikely, although the Reserve Bank of India (RBI) tightened monetary policy by raising key rates.
“There was no surprise in the policy as RBI’s action was factored in by the market. Thus, there would not be any impact on interest rates and status quo would be maintained,” Central Bank of India executive director Arun Kaul told PTI.
The RBI in its monetary policy for 2010-11 increased short-term lending and borrowing rates and the portion of banks’ deposits to be held with it by 25 basis points each, in a move aimed at controlling the inflation spiral without choking growth.
The RBI also said that it expects inflation to come down to 5.5% by the end of this fiscal from near 10% now.
The apex bank hiked its repo, reverse repo (overnight lending and borrowing rates) to 5.25% and 3.75%, respectively, while the Cash Reserve Ratio—or the portion of deposits banks park with the RBI—to 6%, in line with analysts’ expectations.
The hike in CRR, which will come into effect from 24th April, will absorb Rs12,500 crore excess cash from the banking system. Banks have already indicated that they may not pass on the increased cost to borrowers immediately as liquidity still remains sufficient in the system.
“There wouldn’t be any short-term impact on interest rates as there is enough liquidity in the system and the credit off-take is subdued,” said IDBI Bank executive director Sushil Muhnot.
According to Oriental Bank of Commerce executive director SC Sinha, the RBI's steps would help in taming inflationary expectations. However, policy action would not translate into interest rate hikes immediately.
Interest rates could go up after there is substantial pick-up in credit, Mr Sinha said, adding that it could happen in a couple of months.
According to RBI's ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks’ released yesterday, annual credit growth was 12.2%—half the pace recorded last year.
“I don't see interest rates going up before July. At this point, there is abundant liquidity in the system and liquidity is coming from overseas as well,” Yes Bank managing director Rana Kapoor said.
“The policy action would result in cost of funds going up which would be absorbed by the banking system. There would be very gradual transmission of policy action on retail borrowers, depending on the credit off-take during the course of the year,” Mr Kapoor added.
Royal Bank of Scotland country executive Meera Sanyal also said RBI's policy action would have limited impact as there is no dearth of liquidity in the system.