Indian villages were miles away from mutual funds, insurance and even
equity trading. Thanks to Internet Kiosk and the ATM duo which has made
it possible for rural India. This kiosk has been set up by ICICI Bank in
partnership with network n-Logue Communications in remote villages of
Southern part of the country. This is known as Proxi Banking. With the
help of fibre optic cables, this kiosk works on wireless in local loop
technology.
Reasons for setting-up of Proxi Banking
- 58% of rural households still do not have bank accounts.
- Only 21% of rural households have access to credit from a formal
source.
- 70% of marginal farmers do not have deposit account.
- 87% households have no formal credit.
- Only 1% rural househlods rely on a loan from a financial
intermediary. · The loans take between 24 to 33 weeks to get
sanctioned.
- Consumers bribe officials to get loans approved which varies
between 10 and 20 per cent of the loan amount.
- Branch banking in rurals is a loss-making.
Benefits to rurals
- Small loans given for buying buffaloes.
- Loans for setting up a tea shop.
- Life and non-life insurance provided.
- Weather insurance given to farmers.
- Insurance policies sold to farmers like groundnut, castor, soya,
paddy crop, etc.
The Proxy Banking is an innovative approach to rural lending and
will add to the government's expanding base of kisan credit cards and
the good old guidelines for agricultural lending.
