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When Chetna Sinha, Founder and Chairman, Mann Deshi Sahakari Bank was speaking during a conference organized for women entrepreneurs in Mumbai, the 58-year old banker was not flaunting her public speaking skills, instead, she was inspiring young shepreneurs.
In 1996, Sinha founded the Mann Deshi Sahkari Bank in Mhaswad region in Satara District, Maharashtra. But getting her application through wasn’t a cake walk. During the mid-90s, her first application to set up the bank was rejected by Reserve Bank of India (RBI) stating that majority of the proposed bank’s promoters were illiterate. A few months later, these women reapplied for the license. During their meeting, these women argued with the RBI official saying their illiteracy is a result of government ignorance and challenged the official saying that, “tell us to calculate the interest on any principal and if we fail, don’t issue the license. Also, tell your officers to do it without a calculator and see who does it first”. And the rest it is history.
In a rendezvous conversation with Entrepreneur India, Sinha shares her vision for banks and importance of innovation in rural banking.
The Exclusive Clientele
Regions like Satara are known to be drought stricken regions in Maharastra where men mostly prefer leaving their families behind and migrating to a larger city, like Mumbai or Pune, for job opportunities. The households here are then managed by women.
Sinha, who was born-bought up in Mumbai and married a farmer called Vijay Sinha in Satara, worked to uplift the status of women in the rural area. A lot of these women walked up to her complaining the banks have rejected their application to start a savings account or to avail credit facilities citing that their transacting amount was too small, making them unaffordable clients.
She says, “I had no business plan or action plan as such. I just wanted to help them and so, we decided to start a bank.”
After they started off, one of the major challenges Mann Deshi faced was the rural women were not availing the bank’s services with a fear losing their working days. And hence, the bank decided to work around a model which would benefit its field officers and started door-to-door bank services for these women.
“Today, we are a member driven bank with no outside support and yet a profitable organization,” she added with pride.
From the beginning, Sinha and her team saw clients who were hardly educated yet wanted their bank to be computerized and technologically equipped. And hence the bank has tried everything possible to keep up to their expectations.
Giving us an example Sinha says, “Since our inception, we have been using point of sale (PoS) devices for receipts, instead of paper slips, for transaction purposes.” And just like any other bank, Mann Deshi has an option of mobile application and SMS banking services for their customers
Innovation for accommodation
Sinha feels it is wrong on the banking industry's side to expect the rural India to change instead corporates should innovate in their products and take measures to include them.
"These women do not have any collateral. When you go to the bank for a loan they will ask you for your profit and loss account or balance sheet. How do you expect these women to help the bank with these documents?The banking system in India has become so outdated. You have to come out from the traditional lazy banking. The bankers have to innovate in some or other way to include these people in the system. They have to keep it simple and understand their cash flows,” she adds.
Giving us an example of how Mann Deshi is innovating, she points to a wealth card offered by the bank – where the bank makes notes of the client’s assets which can also include her cows and any other cattle or her machinery, depending on the business. The wealth card helps the bank to determine the customer’s net worth.
Presently, the bank’s working capital loan book is about Rs 150 crore, its assets size is about Rs 92 crores and the deposits are Rs 97 crore. Mann Deshi’s gross NPA is Rs 2.3 crores
As a cooperative bank, Mann Deshi shares 30% of the revenue with the Government of India, which according to their CEO Rekha Kulkarni will go up by to 33% in FY2017-18 as the bank is hoping to cross the rupees one crore milestone. As of date, the bank has seven branches, of which six are in Satara district and one near Pune. They also have plans to scale up other districts in Maharashtra
Apart from the bank, Chetna runs Mann Deshi Foundation, a unique business school and digital financial literacy classes on wheels for women in rural areas while it also operates a community radio channel to educate and inspire other ladies in the area.