Oct10.pdf
Departmental Research Support Team
Are Banks Inclusive of the Poor?
THE
INDIAN JOURNAL
OF
SOCIAL WORK
Tata Institute
of
Volume 71, Issue 4
Social Sciences
October 2010
NOTES FROM THE FIELD
Are Banks Inclusive of the Poor?
DEPARTMENTAL RESEARCH SUPPORT TEAM (Department of Social Work,
Andhra University)

It has been observed in the past that the government and banks high-
light SHGs as collectives used for financial inclusion. Even the money
distributed to these groups has been impressive. However, it is impor-
tant to understand the process of loan acquisition. In this light, the pro-
cess of obtaining a bank loan by the three SHGs promoted by the
Department of Social Work, Andhra University, has been closely doc-
umented.
The following account illustrates the difficulties encountered by
poor women members of the Gullalapalem SHG, despite support from
the Department, to obtain a small loan of Rupees 12,000 from a public
sector bank (where they have an account), to purchase sewing machines
to make adda leaf plates (adda are large flat leaves that can be stitched
together and used as disposable plates).
The people who were involved in the process of obtaining the loan
were P.S. Vijaya Bhavani, Project Fellow of UGC DRS Programme,
Department of Social Work, Andhra University; Krishna Veni,
CHILDLINE
Programme;
Padma
Rani,
Secretary,
SHG
at
Gullalapalem; and B. Devi Prasad, then Coordinator, UGC DRS
Programme.
IJSW, 71(4), 623–628, October 2010

624
Departmental Research Support Team
Date
Activity
April 25, 2005
The adda leaf training centre, inaugurated for members of
SHGs of Gullalapalem, had 34 participants who are members
of three SHGs of Gullalapalem. In addition to P.S. Vijaya
Bhavani and Krishna Veni, two members from the SHGs of
Vasavani Palem were present as part of the exposure visit.
May 6, 2005
A letter to State Bank of India (SBI) Sriharipuram bank
manager (where Gullalapalem SHG had a bank
account) was drafted, requesting for a bank loan of
Rupees 12,000 to purchase sewing machines to stitch
adda leaf plates. Padma Rani visited the bank to submit
the letter. However, the manager was unavailable.
May 7, 2005
The next day too, Padma Rani visited the bank but the
manager remained unavailable.
May 9, 2005
Padma Rani met the manager who asked her to apply
for the loan in a prescribed application form that was
available with the District Rural Development
Agency (DRDA), Muvvalavanipalem. He added that
this completed form had to be attested with a letter
from the Department of Social Work, another letter
from the concerned group applying for the loan and
signed by all group members, and a group photo of the
SHG.
Padma Rani informed the same to the
Department.
May 12, 2005
Vijaya Bhavani contacted the DRDA, Muvvalavanipalem,
who said that the loan application proforma available with
them was not pertinent to urban SHGs as the DRDA was
solely working with rural SHGs. They advised Vijaya
Bhavani to contact the urban community development
(UCD) unit of Municipal Corporation of Visakhapatnam
(MCV) for the application form.
May 13, 2005
Following this information given by DRDA office,
efforts were made to contact the bank manager for
clarification about the proforma for loan application,
but he was once again unavailable.
May 16, 2005
The community organiser at the UCD, MCV, was contacted
by Vijaya Bhavani. She was informed that the concerned
bank could sanction the loan on request and there was no
specific application form available for the same.
IJSW, 71(4), 623–628, October 2010

Are Banks Inclusive of the Poor?
625
Date
Activity
May 26, 2005
Keeping in view the DRDA’s and UCD community
organiser’s information, Vijaya Bhavani visited the bank
manager of the Sriharipuram branch to discuss the course
of action. He phoned the Assistant Project Officer (APO),
DRDA informing him that there were no separate loan
application forms for urban groups and that the same
application form was used by both urban and rural groups.
He requested the APO to hand over a loan application
form to the SHG group of Gullalapalem.
May 28, 2005
Vijaya Bhavani and Krishna Veni went to the DRDA
office and collected the application form.
May 31, 2005
On filling the form, Vijaya Bhavani and Padma Rani
visited the bank manager and submitted the form along
with the required documents. The manager directed
them to a clerk and told them to contact him for any
further transactions.
June 10, 2005
The adda leaf training course was completed, but the
loan was not yet sanctioned despite daily visits by the
members to the bank to inquire of the same. The
concerned clerk was on leave at that time, but the
members were not informed of this and were instead
told that the loan sanction was in process.
June 17, 2005
On realising that the clerk was on leave, Vijaya
Bhavani directly approached the bank manager who
informed her that the rules had changed and the branch
did not have any power to forward the application or
release funds. Therefore, the application would have to
be submitted to the bank’s zonal office located at
Siripuram, near Andhra University. Only if the
proposal was approved, would the bank then sanction
and pay the amount to the group. He also said that
application submitted to the Sriharipuram branch be
taken back and submitted to the zonal office of the SBI
at Siripuram. Vijaya Bhavani collected the application
back from the Sriharipuram branch.
IJSW, 71(4), 623–628, October 2010

626
Departmental Research Support Team
Date
Activity
June 18, 2005
Vijaya Bhavani and Krishna Veni visited the SBI Zonal
Office at Siripuram and were advised to meet the
district manager of the lead bank who examined the
loan application and asked them to submit a quotation
on the cost of sewing machines.
June 20, 2005
Krishna Veni again visited the Zonal Office with the
quotation as advised. However, the manager was
unavailable; she went to the bank three times on the
same day, but could not meet the manager. He was busy
in a conference and suggested that the application be
left on his table.
June 21, 2005
Krishna Veni called the Zonal Office and the staff said
that the manager was in a meeting/conference and to
call back in the evening. When she did, the staff gave
the same answer.
June 22, 2005
Krishna Veni called the manager on his cell at 8.30 a.m.
and his wife informed that he was getting ready to leave
for office and asked her to call back in half an hour.
When Krishna Veni called again at 9.10 a.m., the
manager’s wife informed her that he had left for
Chintapalli, a village nearby.
Krishna Veni then called the Zonal Office at 10.30 a.m.
and the staff informed that the manager might be
available in the evening.
June 23, 2005
At 9:00 a.m., Krishna Veni called the Zonal Office for
the Bank Manager. Nobody responded to that call. She
later tried his cell, which was answerd by the manager’s
wife, who responded saying that the manager was out
of station on official work.
At 11:00 a.m., Krishna Veni again called the SBI Zonal
Office and the staff informed that the manager may not
come to office that day.
June 24, 2005
Krishna Veni tried to contact the manager, who
remained unavailable.
IJSW, 71(4), 623–628, October 2010

Are Banks Inclusive of the Poor?
627
Date
Activity
June 26, 2005
B. Devi Prasad called the lead bank manager who said he
would finalise the loan application the next day itself and
asked him to send someone to his office.
June 27, 2005
Krishna Veni went to Zonal Office and waited for an
hour. Later, the manager informed her that he would talk to
B. Devi Prasad and as he was busy in a conference, he
needed some time to finalise the application. The manager
asked her to contact him on June 29.
June 29, 2005
Krishna Veni tried to call the manager, but could not
reach him.
June 30, 2005
B. Devi Prasad called a friend, who was also the regional
manager of the same public sector bank seeking his help
to hasten the loan process. As a result, the lead bank
manager called Devi Prasad and said that the position of
the application would be conveyed to him by the same
evening. However, the manger did not call back.
July 1, 2005
Krishna Veni called the zonal lead bank manager who
informed them that the application was returned to
Sriharipuram branch, as it was not in the standard
format. To process and realise loan, the standard format
should be filled and enclosed with the application. The
amount would then be released within 2–3 days. Krishna
Veni informed Padma Rani of the new development and
asked the latter to follow-up on the loan application that
was returned to the bank’s branch at Sriharipuram.
July 3, 2005
B. Devi Prasad called the lead bank manager and told
him that so far they have followed all their instructions,
and requested him to expedite the process without
further delay. The bank manager agreed to this.
July 4, 2005
Padma Rani visited the branch manager who informed
her that he had not yet received the application from the
Zonal Office. She then immediately informed Krishna
Veni of the same.
Krishna Veni then called the lead bank manager who
said he would check whether it was sent to
Sriharipuram branch or not.
IJSW, 71(4), 623–628, October 2010

628
Departmental Research Support Team
Date
Activity
July 5, 2005
Krishna Veni called the zonal manager and asked him
about the status of the application. He said that the loan
was sanctioned and the amount had been given to the
SBI Sriharipuram branch. She immediately informed
Padma Rani of the same.
Padma Rani visited the Srihraripuram branch and the
manager said that they had not received any
information regarding the sanction of loan from the
Zonal Office.
Later in the evening Padma Rani called Krishna Veni
and conveyed that the Sriharipuram bank manager had
called her and asked her to immediately come and
collect the loan amount as it had been was sanctioned.
July 6, 2005
Padma Rani collected the loan cheque from the bank.
Vijaya Bhavani visited the bank to enquire about loan
repayment process, interest rate, duration etc.
July 7, 2005
The members placed an order for the sewing machines.
July 8, 2005
The machines were purchased and handed over to the
members of the SHG.
IJSW, 71(4), 623–628, October 2010