Entrants's Name: Harishchandra Sukhdeve

Country: India

Field: Rural Development

Innovation - idea: Indebtedness to usurious private moneylenders has been one of the root causes of spate of suicides in various parts of India. MLFV envisages to replace and gradually eradicate private moneylending from villages. The rural indebtedness and private money lending can be effectively tackled through institutional finance by organized efforts of the Banks and SHGs.http://www.uncdf.org/english/microfinance/pubs /newsletter/pages/2005_06/news_lenderfree.php

Innovation - why it is pioneering: A pilot project run in nine villages spread over a vast territory of six districts was successful in completely eradicating reliance on private moneylenders in some villages and substantially reducing it in others. The MLFV could blend the formal financial services with strengths of SHGs and achieve not only financial inclusion but also social cohesion and commitment to community living.

Strategy - how it achieves impact: Villages were selected based on Self Help Groups(SHGs) penetration. The volunteers, especially women, were enlisted to promote further SHGs so as to cover all the families. SHGs were nurtured to become strong. Their functioning was monitored through village meetings and experience sharing workshops. A village credit plan for institutional lending was prepared based on a simple village survey. The credit requirements were fulfilled through bank only. But the SHGs too were given enough line of credit to help needy people in case of urgencies or when bank formalities were not possible for any reason. The proactive role played by the bank under my leadership as its Chairman increased peoples' confidence and participation. The project had many spin off benefits too, like reduced social discriminations, increased awareness about social evils like illiteracy, child marriage, alcoholism and commitment to environment protection. Besides women, there was increased participation by youth.

Strategy - growth plans: BANKS + SHGs = MONEYLENDERS-FREE VILLAGES (MLFV)! MLFV underlines relevance of the SHGs in gradually eliminating private money-lending & its attendant evils from the villages. MLFV recognizes that SHGs, besides facilitating timely credit, also offer best platform for counseling the farmers to reduce their distress.The project MLFV offers win-win situation for both banks and villagers while achieving the national goal of eliminating private moneylenders, poverty alleviation and sustainable development through financial inclusion. The project profile and our experience is widely shared on various forums strongly advocating for its implementation.

It has strong potential for replication by virtue of its simplicity. The SHG movement is very strong in India and now the world over. If all rural branches of various banks select one village in the first year and progressively increase the number by one every year, all six lakh villages in India can be covered within four years.

Impact to date: At least three villages under pilot project MLFV declared themselves as moneylenders free. One of the villages, viz. Sathewadi, which had a history of human sacrifice, was featured on front page by the leading vernacular daily "Sakal".Thanks to the SHGs and a motivated village volunteer, Smt. Vijaya Dhurandhare, village Sathewadi, declared itself free from moneylenders on 18th October, 2004. The entire village participates in SHGs; at least one person from each family is a member. They have so far mobilized over Rs.480,000 (US$11,000) in savings. The village women and youth borrow from the SHGs to pursue their vocations, businesses and agricultural operations, and no longer rely on private moneylenders for any financial requirements. It is now a moneylender-free village. It is certainly implemented in various models with SHGs as a medium to increase the outreach. The Govt. of India is considering to adopt it for implementation on a larger scale.

Future impact: The project MLFV is expected to achieve following results

For villagers: Freedom from the usurious, exploitative private moneylenders, timely, hassles free credit from banks or SHGs, increased savings/ habits of thrift, self reliance in financial matters with better bargaining power, less exploitation from middlemen, enhanced self esteem and self confidence, village empowerment through solidarity & brotherhood, reduced social conflicts, mutual counselling which would prevent anybody resorting to extreme steps like suicide, For Banks: Better utilization of loans and better recovery, reduced operating costs, improved scope and outreach to rural sector which offers huge potential, better image building, For the Society / Nation: Better social coordination and enhanced social harmony at village level, eradication of various social evils and empowerment of women and poor, better understanding and implementation of various government schemes, and reduced corruption.

Sustainability - resource base: The SHG movement is becoming very strong with various governments and institutions, private as well as public getting involved. Banks have realised the potential of microcredit and they are supporting not only with credit lines to SHGs but also in their formation. Many NGOs and MFI are getting support from govts., banks and private funds. The organised efforts on the lines of MLFV concept will however yield quicker results for reducing exploitation and corruption in financial intermediation. It is observed that the brotherhood and solidarity achieved through increased self esteem makes villagers more involved in other social endeavours enhancing its sustainability.

Major challenge for the field: Vested elements destroying the democratic fabric of SHGs, SHGs becoming family affair of a few local influential people, Political interference while implementing on larger scale, Villagers exposed to globalisation may bring in conflict of interests creating stressful situations for implementing agencies, Private moneylenders creating hurdles and misunderstandngs,

Contact Information:

Name: Mr. Harishchandra Sukhdeve - Senior Executive in a Commercial Bank
Country: India

Bio: Hailing from a remote village, I have first hand experience of rural poverty and various rural problems. As a banker working in backward areas I have had good opportunities to work for rural development. In my earlier career I used to formulate and implement Village Adoption Schemes.

As a Chairman of a Regional Rural Bank I had a broader canvas which I tried to use for various innovations in systems and procedures and ddelivery of credit to rural people. I insisted for village level camps for preparation and processing of kisan credit card proposals. It helped us double the number within one season. I also prepared a comprehensive loan scheme called eZI Kisan Credit Card (eZI KCC) introducing a new concept based on average cropping pattern (instead of proposed cropping pattern)for assessing working capital requirements. I consider that farming is a continuous profession of the farmers and they should get regular line of credit instead of short term crop loans.

I also used our large customer base and good contacts for some social initiatives like helping flood affected villages with in-kind donations, encouraged staff for helping Tsunami hit people, etc.

In my day to day banking operations also I innovate frequently. I was the first to introduce non-stop 9 hours banking in city branch several years ago when there was no such concept in vogue.