New Delhi, Dec 31 (UNI) Finance Minister P Chidambaram today called upon the banking system to get into financing urban poor in a larger measure using the vehicle of micro-finance and asked public sector banks to gear up to meeting the needs of Self Help Groups (SHG).
Inaugurating 1500th branch of the Indian Bank here, Mr Chidambaram said that while banks have increasingly over the last few years got into the business of micro-credit, they need to take a leap forward in this direction.
He took note of the fact that India has the largest number of SHG's as also the biggest programme of serving lunch to school children, namely the Mid Day Meal scheme.
The branch in the national capital will cater exclusively to scores of poor organised into groups. This will be the ninth micro-finance branch of the bank.
Mr Chidambaram lauded the effort of the Indian Bank in meeting the financial requirement of urban poor. He said they need to give exclusive attention to the poor and asked public sector banks to build confidence among them, so that they can take recourse to the widespread banking system.
He said that if they start banking by even putting in paltry sums, they will eventually get into the habbit of borrowing from banks. By making a small bigginning, the poor will develop confidence to borrow larger amounts, enabling them to set up their own enterprises.
The Finance Minister spoke about the yawning gender gap and argued that women should be able to undertake any activity which men do and perform.
Mr Chidambaram said gradually even private sector banks are getting into micro lending for the reason that the recovery rate from among the poor is as high as 98 per cent.
Mr Chidambaram said in many ways the urban poor are worse off then rural poor, even though if measured in terms of income they may be better off. This is because of the high cost of housing and because they have to contend with adversities like high level of pollution and poor sanitation.
The Finance Minister thus told the banks not to ignore this vulnerable section of the society and make all out efforts to meet their requirements.