India - Helping rag-pickers to become entrepreneurs

After bringing rag-pickers under the banking network a year ago, the Dharwad-headquartered Karnataka Vikas Grameen Bank (a regional rural bank sponsored by Syndicate Bank) has now taken a step forward to identify entrepreneurship skills among them.
The bank has issued ‘laghu udyami’ credit cards to 25 women members of the rag-picking community.
The bank initiated the process of bringing rag-pickers under the banking network by forming five self-help groups (SHGs) of rag-pickers in Dharwad in June 2007. In September that year, the bank went ahead with credit-linking the five SHGs .
Mr M. Dhananjaya, Chairman, told Business Line that the SHGs, which were given loans, have started repaying the loans and now some of the members of the group have started depositing the amount in the bank. Credit cards
After observing the banking habits of rag-pickers for a year, the bank decided to develop entrepreneurship skills among the womenfolk and came up with the idea of extending ‘laghu udyami’ credit cards to them.
Mr Ullas Gunaga, who was actively involved in the formation of the SHGs, said that five groups were sanctioned loans to the tune of around Rs 5.25 lakh. The loans were closed before term, denoting their sincerity and promptness in credit dealings.
Added to this, five members of these SHGs have deposited Rs 10,000 each in the savings bank account of the bank. Members of these SHGs are illiterate and migrants from northern India.
Asked about the reasons for extending ‘laghu udyami’ credit cards to them, he said this will help them bypass middlemen in their work. Added to this, some women members have started persuading their husbands to start work using the items they collect while picking rags. Maintaining account
During the coming days, the bank plans to expose them to issues such as health, hygiene, and education, Mr Dhananjaya said. To a query on how these members maintain their accounts, he said that a social worker from the area, Ms Geeta Patil, is maintaining accounts for them