Tie Ups are Important in any Developmental Initiative.

 A lesson on the importance of tie ups in a developmental initiative years ago.

Dinesh K Kapila

More than twenty years back, I was assigned three districts in Punjab. I tried to be a committed,

passionate, driven developmental banker. It was a once in a lifetime opportunity to learn all about governance, rural commercial activities, rural livelihoods, banking and credit and the impact of socio economic initiatives. At the district and sub district level. It taught many a lesson in humility and reality.  Once in the sub mountainous areas, a President of a small NGO and a Branch Manager of a PSU Bank (also the Lead Bank) met me during a visit to their block. The concern was for a village inhabited by primarily socio economically deprived communities, they were into weaving baskets, brooms, artefacts etc from wild grass - mainly Sarkanda and another species. They made a subsistence level living, dependent totally on the local commission agent cum trader for credit to buy inputs and the minor tools, money for an emergency and for the sale of the produce. The charges were usurious, this area would have money lenders charge 10 percent per month. It was here that I learnt to say that the Banks charged say 1 percent a month, rather than 12 percent a year. This only was understood by the rural folk residing in this region.

Well, to cut it short, we got on to it. Visits followed to the village, with the Sarpanch (Village Headman) and even the trader. The trader was himself just a person of  reasonable means, his house stood out, but nothing to say he was really wealthy. We met the women who worked on this activity and asked them about any intervention which could be undertaken by us. They wanted it all to be done by the Govt as a welfare measure – always the first preference but not really possible – and  ultimately we zeroed in on Self Help Groups (SHGs), Joint Liability Groups (JLGs) and issuing General Credit Cards to the men (a reality, had to exclude women) and credit limits were to be sanctioned to the SHGs and JLGs once they stabilised. To drive in cohesion, to upgrade skills and to create an conducive environment, A Skill Development Programme sanctioned by us was also proposed to be added. Then the Branch Head discussed it with his Office and his Regional Office, and he and the NGO went over to the SDM and BDO too. A small funding component to organize the SHGs and JLGs was also sanctioned. The total number targetted was 120 spread over two nearby settlements. 

All being enthusiastic about it, we went ahead with a formal coordinated approach and a time bound action plan. The NGO studied the costing in detail of the activities, the profit margins and the markets including setting up stalls at a couple of places. Finally we had all the sanctions and approvals in place and the surveys and groundwork completed. We then had a grand opening ceremony with the Zonal Head of the PSU Bank himself participating with enthusiasm. The SDM also associated as did the BDO. I was there as was the LDM and we made speeches too and we had songs and some motivational inputs. It was a very positive atmosphere and occasion. Nearly festive. The trader stayed away but only stated if it was for their betterment, then it was fine with him.    

Our commitments went very well. As did the response, specially for the training. It was positivity and high energy levels all the way – I was visiting as was the LDM and the DIC (District Industries Centre Officials). We had the formal review meetings also. The GCCs were issued and the JLGs and SHGs were also formed. There was certainly commitment and zeal all the way and there was no negativity.  We also had added components on awareness and empowerment. All were well received.

But as a year passed, I could feel the energy levels dropping and the morale dropping at the Bank and NGO too. The Sarpanch was disinclined to sit with us and said openly we would bring about his defeat in the next election. The reason - we could not sell the products. The products were certainly better now, even if not uniformly so as is natural initially.

But the NGO, being more attuned to socio economic development, found it difficult to organise the business in terms of scheduling, orders, advance, commissions, logistics, sharing with the women etc. The market was not hostile but was simply indifferent and treated the NGO as an outsider. The trader used to simply pass on only the job work to the women and would restrict his interaction to the men where it was simply about conveying the orders and when to bring over the finished products and then settle the accounts. The interaction was limited and confined to a few issues. All the networking, the storage, the negotiations of rates and commissions, logistics was handled by him or his associates.

The NGO was honestly stating by now that the initiative was too costly for him (I think he thought he could earn of it too) and that he was deploying his own funds also now.  Plus the prolonged close contact and visits were a cost too. The women and men, who would accept the commission and compensation from the trader readily – including his deductions for quality, would argue with the NGO for equal compensation for all. Then the products placed at a couple of offices would not sell and the women going there or employed to sell it wanted more compensation. The products at the offices would sell reasonably so as the shops were also selling brooms and the like.

Ultimately we – rather the Branch Head and the NGO, renegotiated with the trader informally and then with the trainees and the groups. It was a come down but the trader assured that considering the improvement in quality, he would enhance the compensation. That is the way it was then. We tried diligently and honestly, but the learning was also there. Slowly the initiative died out as did the buzz around it.

Years later, when posted as OIC Kashmir / Ladakh, I remembered this learning and experience consistently when working on initiatives for artisans.      

Just sitting around today, I thought of sharing this. Now times have improved as have levels of awareness and knowledge. But the core of the issue remains.

---------------------------------------------------------------------------------------------------

Sometimes what holds up the flow of credit. In rural India. I came across this letter written by me way back in 2004 -2005. To the Deputy Commissioners of Three Districts I was assigned to.
As you would be kindly aware, the captioned issue was raised by me at the recent DCC Meeting based on the feedback I got from bankers at the BLBCs, specially in kandi areas. The issue is that wherever the PSTC has installed deep tubewells or any irrigation work by any agency has been operationalised, the revenue records also need to be updated. The revenue records need to indicate that the classification of the land is now Irrigated, as per feedback, as of now, the classification of land continues to be ‘bairani’, that is, unirrigated and hence essentially uncultivable. Even if a banker were to advance a crop loan against a ‘baraini’ classification, it would face a problem with the auditors. This impedes the flow of credit. Hence in the interest of furthering the flow of credit to such areas, I would request that the classification be revised as appropriate. A remark as regards irrigation status on the said revenue document could be also considered.. I thought the issue as such should be brought to your notice for action as deemed appropriate.

• 1