VFS: Paving way to financial independence of rural women

   By Kuldip Maity ,  14-Jan-2019
VFS: Paving way to financial independence of rural women

VFS facilitated nearly 2.5 lakh customers to open accounts with various private and public sector banks and disbursed the loan amount to their account.

Having spent over two decades in microfinance, I am a staunch believer that poverty can be best addressed by not merely giving the poor access to finance but also by helping them to be integrated in the wider financial universe. To my mind this is the perfect example of “Sab ke Sath Sab ka Vikas”. Access to a transaction account – that helps him/her receive funds, save money gainfully and make payments through bank - is the first step towards this goal, as it serves as a gateway to other financial services. VFS facilitated nearly 2.5 lakh customers to open accounts with various private and public sector banks and disbursed the loan amount to their account. In the next step we organized a series of special initiatives to impart knowledge that will take women graduate from financial literacy to financial independence.

Our records will prove VFS helped the poor to be selfsufficient in extreme poverty-stricken areas, which are not catered by the commercial banks. VFS presently have over 4.6 lakh women customers. In the last financial year our customer base grew by nearly 40%. According to our internal survey after third cycle loan we can expect a customer to generate indirect employment for about two people from his/her family or community. That means we are not only helping our customers but people around them. Apart from our regular micro loans VFS launched Individual SME loans. To further the goal of financial inclusion through financial literacy, we have taken initiatives like CGT (Continuous group Training) and CAT (Customer Awareness Training) with our customers. This is to build social awareness about financial services and their implications. We are now focusing on helping our customers to take advantage of digital technology to improve their productivity. To help our customers to take advantage of the progress of digital connectivity in the country, we designed an online training course.

Any customer from States VFS has operational bases can participate in the course to understand nuances of the digital banking/transactions. To our utter satisfaction, the course received tremendous response, way beyond our initial expectations. We are also organizing various trainings at our different training centre and they are participating in the interactive sessions with great interest. Our assessment suggests that every single rupee lent by VFS was invested in productive activities enhancing not only the earnings of the member but also created indirect employment generation. What is more satisfying, in many cases our intervention helped create a selfsustaining ecosystem.

Successful VFS customers started encouraging neighbors to start savings at banks, taking advantage cashless transaction methods, and starting production of raw materials. It helps existing businesses to tap wider demand, create a value chain and reduces the risk of business for all. In short, it is quite evident that the impact of a VFS loan goes beyond our core business of lending money. We are not only helping create a strong rural economy by opening non-farm livelihood opportunities, but also helping the economy to formalize through broad-spectrum financial inclusion.