The central government ministries and departments annually spend billions of rupees in communication – TV and print media. Increasingly, there is a realisation that their communication is not reaching the intended audience. The Ministry of Rural Development has taken the corrective steps and introduced Bharat Nirman Volunteer Scheme to engage masses directly in development as also to educate them on various schemes.

With the new initiative, the decisions are delegated to the district level — whether they need a school, a road or water. “The objective is a bottom-up approach to ensure that the development programmes are not only more purposeful and result-oriented, but also binding upon the sarpanch and the district administration. Almost 70,000 volunteers are active all over the country and the number is growing,” informs Uday More, Director at Ministry of Rural Development.

The ministry’s network of State Institutes of Rural Development (SIRDs), set up in every state capital, plays an important role in mobilising villagers and creating awareness about the schemes available so that there is a demand. Villagers who volunteer learn about the rural development schemes available including those of other ministries. Each volunteer is told to engage with 10-40 households to understand their needs and problems, and communicate with them about the powers of their Gram Sabha.

What is the best strategy for building capacity in the community and linking it to the financial sector? According to Ashoka Chatterjee, Head – Institutional Finance, Bandhan Financial Services, there is no straightjacket solution. It has to be area specific, with the local government taking the initiative to identify the needs of a particular area. Swasthya Sahayika is a scheme by Bandhan, under which women are trained as health volunteers, addressing basic health needs, hygiene, food and water, sanitation, simple medicines and medication.

Bandhan’s targeting of the poor starts with bringing together everybody in the village community and asking them to identify the real destitute. They are given some equipment and training to earn a livelihood, and a small stipend for two years. After that she can approach a bank or Bandhan and build her livelihood.

Barnabe D’Souza of Don Bosco Research, points out that lack of education, financial literacy and limited awareness deprive the poor of the opportunity to take part in their own progress. His experience in trying to promote no-frills accounts in urban slum areas has been poor. Accounts are opened but remain unoperational, machines are not delivered on time, and biometric data collection is pending, besides other problems. NGOs work hard to connect a community with the local bank officers but before anything starts to move, they get transferred.

Many banks are working with SHGs and these work well particularly where co-operative movements have been successful, according to Kishor Kharat, GM – Financial Inclusion, Bank of Baroda.“

Self Help Groups (SHGs) have a good role to play in mobilising women at the grassroots. Rural banking is done mostly through SHGs and farmers clubs. “We are encouraging setting up of centres for financial literary and capacity building but what is required is creating a market,” says Kharat. For instance, small scale industries benefit from tie-up arrangements that the bank encourages with big industries so that the latter buys the SHG products. The other challenges are offering affordable insurance policies, the process of delivery, and creating an umbrella to cover assets, life, accidents and events — discussions are on to provide these services.

Accounts are opened but remain unoperational, machines are not delivered on time, and biometric data collection is pending, besides other problems. NGOs work hard to connect a community with the local bank officers but before anything starts to move, they get transferred

R V Verma, CMD of National Housing Bank says NHB is trying to take housing finance to the informal sector, an area that is perceived to be even more risky for the lender than normal consumption loans or productive loans since it involves larger volumes and over a much longer period of time. NHB is trying to help them create an asset of permanent value that they can use as collateral. The linkage between the formal financial market and the informal sector has been quite successful.

The Department of Posts with around 260 million small savings accounts; 20 million life insurance policies; 155,000 post offices reaching every part of the country; 500,000 employees of which 400,000 are in the villages; and, 53 million MGNREGA accounts, is well positioned to take benefits of government schemes to the people at the bottom of the pyramid.

Vinod Kumar, Director-Investment (PLI), Department of Posts points out that India Post’s Grameen Dak Sevaks are known to everyone in the village. They could work as volunteers. “Multiple government agencies have been working in different directions. It is the DoP, which can play the role as a focal point to offer the services from multiple agencies to the target group.”

The Ministry of Rural Development alone spends 800 billion rupees every year on rural development — this does not include agriculture or animal husbandry. You name a problem, says K Chandramouli, Commisisoner, Andhra Pradesh Academy of Rural Development, and the outcomes are flagship programmes with enormous funds. But they don’t converge, the community is not involved in planning, there are leakages, allocations are not spent, deliverables are not measured — even when there are good results, they are not sustained, and individuals have no ownership. Chandramouli commends the work done by Bharat Nirman Volunteers. “Unlike other programmes, reaching benefits to the unreached households is done by volunteers in their own village — which is why it is successful.”

Canara Bank looks at sustainable community development in two ways, says S S Bhatt, its GM – Financial Inclusion. About 400,000 people have been trained through Self-Employment Training Institutes. Segmented groups such as minorities, women, artisans and the physically handicapped avail of training through improved methodology and systems, project reports and guidance to set up suitable enterprises and market their products, thus providing end-to-end solutions. Under financial inclusion through SHGs, about Rs 30 billion have been disbursed through micro-credit over a period of three years, with women’s groups constituting 95 per cent of the beneficiaries. This is bringing about a revolution in rural areas as reaching out to women who traditionally do not come out of the house is a challenge. The bank has also developed a micro-insurance product for SHG members. In case of a casualty, the settlement is made within three days of the claim — this is convincing more people to come forward.

The DoP with 260 million small savings accounts; 20 million life insurance policies; 155,000 post offices; and, 53 million MGNREGA accounts, is well positioned to take benefits of government schemes to the people at the bottom of the pyramid

State Bank of India has maximum exposure with SHGs in Andhra Pradesh with lowest NPAs. While the bank has covered 77,000 villages till March 2012, the challenge lies in covering additional villages with populations less than 2000. The physical infrastrstructure and poor telecom network is a hindrance. The Customer Service Points and the machines, even though, are in place still do not have connectivity.

SBI has introduced several good initiatives such as Bank on Wheels visiting five to six villages per day, posting 1,000 probationary officers in remote areas for longer tenures, and imparting training in association with NABARD. Anchor NGOs are receiving monetary incentives by NABARD to set up SHGs in backward regions and within set time frames, and the government is including more districts.

There are those who are moving up from basic sustenance to rising livelihoods. Millions more need basic sustenance.

Bottom-Up Approach for Yielding Better Results

• Bharat Nirman Volunteers in community engagement are motivated by self-esteem and a sense of pride — an initiative that needs to be replicated on a massive scale
• Response to initiatives in rural areas is poor but acceptability increases dramatically when communicated by local level workers
• Area-specific benefit schemes and programmes derive better results
• Community participation with training, micro-finance and capacity-building are motivating factors
• End-to-end solutions are crucial for long-term sustainability and growth
• Deliverables must be measured to sustain good results
• The Department of Posts with its vast network, rural reach and literate manpower can be a viable focal point to deliver services from multiple agencies, converging products and saving overlapping costs
• Panchayati Raj institutions need to be better equipped and have adequate knowledge about programmes