India Post was all set to expand the project, but due to the pending resolution of the credit risk rating, the plan has been put on hold for the time being

The National Bank for Agricultural and Rural Development (NABARD) has developed cold feet over the disbursal of micro credit to Self Help Groups (SHGs) as planned earlier, in Gujarat and seven other states including the North East, through the post-office network. The hitch, it is learnt, is over the sharing of exposure to credit risk.

India Post has already disbursed Rs 1.35 crore among 165 SHGs in five districts of Tamil Nadu on a pilot basis and no default was reported. India Post was all set to expand the project, but pending resolution of the credit risk sharing, the plan has now been put on hold at least for the time being.

The other states where the project was to be implemented are Bihar, Karnataka, Orissa, Madhya Pradesh, Kerala, Maharashtra and Uttar Pradesh.

Postmasters have been specially trained in nurturing SHGs and making inspections. A simple interest of 9 per cent is charged on the loans out of which India Post gets a share of 3 per cent, with the remaining 6 per cent going to NABARD.

The scheme helps the Postal Department in cross-selling its financial and insurance services to the SHG members, thus strengthening their financial and life security besides underlining the continuing relevance of rural post offices and their close interaction with the public.

If implemented on a full scale, the scheme will reinforce their relationship with the rural people. Post offices in the country have already disbursed about Rs 2,900 crore as wages to beneficiaries of the National Rural Employment Guarantee Scheme (NREGS) through around 15 million accounts in nearly 70,000 post offices.

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