Self Help Group members as Bank Agents – Empowering women to drive financial inclusion

Poor rural women (who are SHG members) working as Bank Agents and providing a range of financial services to their community – this has become a reality for almost 80 women with nearly 30,000 bank customers in India.

As a part of the Rural Financial Institutions Programme (RFIP), National Bank for Agriculture and Rural Development (NABARD) and GIZ initiated this project in 2012 to overcome a major challenge in ensuring financial inclusion of rural low-income households: the last mile service delivery. Dormant agents and inactive accounts pose a critical challenge to the otherwise very successful financial inclusion drive of the Indian Government (18 million bank accounts were opened in just one week after the launch of the newest financial inclusion programme – the Pradhan Mantri Jan-Dhan Yojana (PMJDY). Self-Help Groups (SHGs) are community-based groups of mainly women who come together to save and lend each other small amounts of loans. Through the Self-Help Group Bank Linkage Programme, about 74 million of these groups also have a bank account where they save and can receive larger bank loans. RFIP connected these two major programmes in India using community-based networks and their members as bank agents to improve the effectiveness of financial inclusion. The idea of SHG members as Bank Agents - or Bank Sakhis (friends) as they are called - was born!

The approach has been tested through two pilot projects in geographically diverse locations of Uttar Pradesh and Madhya Pradesh. The experience from the twin pilots has demonstrated better performance of Bank Sakhis vis-à-vis conventional agents through lower dormancy, fewer inactive accounts and lower agent attrition level combined with high customer satisfaction. Furthermore, by having an SHG member as the local bank agent, all SHG related transactions, which have been handled largely outside before, get included into the formal financial system .

A Bank Sakhi is someone who has been an SHG member involved in conducting banking and book-keeping activities of the group. As a Bank Sakhi, she provides a range of financial services on behalf of the bank to her community and is supported by the local SHG federation which provides capacity development, training, and financial awareness in the community. She is paid a commission by the bank for different services, which covers her costs and provides her with an income.

Despite the restricted mobility, limited social circle, and low comfort with technology, these Bank Sakhis perform better than conventional agents. On an average, the percentage of dormant accounts is lower than the conventional bank agents of the same bank. Attrition rate of the Bank Sakhis is also significantly lower than other conventional bank agents.

However, the impact of this approach goes beyond performance related numbers - it empowers women. The Bank Sakhis have gained tremendously in terms of recognition by their families and the community at large since they have taken on this job. They are able to cross social and cultural barriers by offering services to the whole community. About 50% of the Bank Sakhis’ customers are women (compared to the general average of ~35% for other channels). By empowering these women to become strong and reliable bank agents who serve their customers responsibly, financial inclusion becomes much more effective and actually reaches out to the excluded strata.

A Bank Sakhi registering at the local bank branch in UP
A Sakhi at home in UP, with livestock, another means of livelihood
Uma Devi enrolling an elderly customer in UP for a bank account to receive pension
Rajkumari visits a customer at home : enabling convenience at the doorstep in UP
Rajkumari spreading awareness among UP villagers about advantages of solar home systems : greening the environment
Village campaign in UP on financial literacy
Members depositing cash in their accounts through their local Bank Sakhi, UP
Bank Sakhis from UP at the bank branch to submit registers and accounts
Building capacities of Bank Sakhis in UP
Bindiswari on her way to customers in nearby villages in UP : last mile connectivity
Empowerment in action
Sunita Rainwal at a village camp in MP to increase awareness and enrollment : widening financial inclusion
Customers in MP identify themselves through biometric fingerprint : state-of-the-art technology
Shobha Baloniya opening bank accounts for SHG members in MP
Kanta Jatva provides financial literacy training to customers in MP
Pinky providing financial literacy training to customers in MP
Bhavna Chouhan - multitasker par excellence: Bank Sakhi and teacher at the local school in MP
Mithilesh Bhadoriya from MP counting cash and recording transaction details
Bhavna Chouhan at the bank branch to deposit money and submit documents
Lina Mina, a Bank Sakhi, at her home in MP