The Kalanjam Community Banking System

By:-Ashish kumar BarnwalPankaj Kumar BarnwalXidas,Jabalpur

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Introduction

The Kalanjiam Community Banking Programme focuses on women and believes that localised financial institutions owned and controlled by women are an effective strategy to impact on poverty and gender issues.

The primary unit of community financial institutions is the Self-Help Group of 15 to 20 poor women and is called the Kalanjiam

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Contd…………

Kalanjiam is a Tamil word which means “grain storage jar.”

The programme has taken the shape of a movement called the ‘KalanjiaIyyakam’ working towards bringing more women into the fold of the Kalanjiams;

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Contd…………..

The Kalanjiam Movement is implementing a number of innovative programmes for reaching out to more women.

The Kalanjiam Foundation has been promoted for up scaling the Kalanjiam nested institutions model.

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Vision

To reach nearly millions of poor families

and impact on their livelihoods in a significant way.

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Mission

• Up scaling the Kalanjiam Program;• Create, Nurture and Sustain Community

Organisations of women in Microfinance for Development;

• Deepening the Microfinance for addressing poverty.

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Guiding Principles• Promotion of Self-regulation and

self-renewal process;• Promotion of people institutions with

the prime focus on self help, mutuality and sustainability;

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Contd……………..

Value collaboration with mainstream financial and development institutions;

Working with poor women to address poverty and development of women.

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Products/Services

• Savings

• Credit

• Insurance

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Women's Savings & Credit Groups (15-20 members) Primary Groups at Village level.

Local Banks

Federation of groups (150-200 groups) At the

Block level

Cluster Development Association

(15-20 groups) 4-5 nearby

villages

Nested Institutions

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Reach•Exclusive focus on poor reaching out to 257,928 poor women;•Geographical spread-5,604 villages/slums of 103 locations of 25 underdeveloped districts.•States- Tamil Nadu, Karnataka, Madhya Pradesh, Orissa.• Union Territory- Pondicherry.

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A number of 32 commercial banks and Regional rural Banks are currently involved in the linkage programme with the Kalanjiams through 192 bank branches;

Through this linkage, bank is providing a bulk loan to group and group acts as a financial intermediary and takes the responsibility of managing the loan among members and repay to the bank;

This group lending reduces the transaction cost for the bank and helps to reach large number of clients;

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The direct linkages by groups has significantly influenced the profitability of these branches and resulted in institutionalising the collaboration.

Many banks like ABN AMRO, Canara Bank, SIDBI have sanctioned loans at competitive rates with flexible terms and see a great business opportunity in future.

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The programme has promoted 47 federations which are different levels of growth process in terms of addressing financial and social development needs of poor women.

It has initiated many social development programmes which include housing, infrastructure, health, education, sanitation, drinking water, skill building, insurance and business promotion.

These federations have established linkages and entered Memorandum of Understanding (MoU) with local, district administration, municipalities, apex banks, CAPART, HDFC SIDBI, NABARD and industrial houses.

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Many federations actively participate in promoting philanthropy in each location by way of supporting education of children through scholarships, donations to people affected by fire accidents, floods and other calamities, and for meeting major health expenses of other members - and their families.

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References

• http://www.dhan.org/kcbp/frames.html

• Karmakar, K.G. (2002), Rural Credit and Self-Help groups, Sage Publications, New Delhi.

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THANK YOU !

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