By Our Reporter
Shillong: The disturbing percentage of 95 percent of Meghalaya’s population remaining outside the financial inclusion ambit has called for a convergence between different departments of the state government and the banking sector to bring about holistic development of the rural sector.
The lack of banking services in the rural areas coupled with geographical problems in the state has become a stumbling block for development, Chief Minister Dr Mukul Sangma observed.
“With the Credit-Deposit ratio standing at only 38 per cent, there is a need to pull in the banks as partners to address this problem and make banking services available to every households in the rural areas”, Dr Sangma said.
Dr Sangma was delivering the inaugural session of the four-day basin development week with special reference to the flagship Integrated Basin Development and Livelihood Promotion Programme (IBDLPP) organized by the state government at Yojana Bhavan here on Monday.
The week which began with a conclave on financial inclusion and workshop on climate change adaptation saw the participation of National experts on financial inclusion, Micro finance institutions (MFIs), bankers, government officials and NGOs.
A simultaneous consultation on climate change adaptation where the Government of Meghalaya is partnering with the German agency GIZ is being held at a separate location.
The Chief Minister pointed out the ground realities facing the rural sector in Meghalaya and stated upfront that banks were reluctant to partner with the government despite assurance of 20-25 percent credit flow.
“At present, the state has 39 blocks and if banks cooperate then there are possibilities of creating another 39 blocks”, Dr Sangma said. He felt that this is the only way to ensure credit flow to the rural farming population of Meghalaya.
The Chief Minister drew the attention of the audience to the linkage between agriculture and culture in Meghalaya and stated that at one time people farmed livestock and took them as gifts for marriages etc. Not people have almost given up livestock farming because of the insecurities involved.
Meanwhile, chief secretary WMS Pariat stated that the presence of rural banks in the rural areas has slightly increased to 45 percent at present from 22 percent in 1969. “This is not a desirable increase and we have to look for ways and means to further enhance this sector”, he said.
Pariat lamented that despite push, the rural populace have not been able to avail even the basic banking facilities. “Focused policy is only limited to open up banking facilities but the same is not enough as the rural populace needs to be encouraged to also avail credit services of banks”, he opined.
The chief secretary further stated that financial inclusion is a misnomer in rural areas leading to a situation where people cannot come out of the shackles of poverty. “Banks and micro finance companies needs to be set up in the rural areas to facilitate lending to the agricultural and other sectors” he said.
Later during the panel discussion, national experts on financial inclusion and micro finance spoke at length on the challenges for financial inclusion in North East while suggesting ways and means for the government to take up measures to tackle this problem.
The panelists stressed on the need to include micro-finance institutions under one umbrella while shifting focus to economic inclusion first as financial inclusion without economic inclusion will not go a long way.
They were also of the opinion that the government should invest more in technology while focusing on the savings mechanism stating that it has high welfare potential.
Meanwhile, they have also pointed out that in the North East compared to other states in the country, the relationship between the NGOs and the government is very amorphous. “The convergence is missing”, they observed.
Overall, they have stated that mass awareness and capacity building of the rural populace on financial inclusion is imperative for them to understand its importance for economic and livelihood development.