IFMR Trust - Announcements - Kshetriya Gramin Financial Services in Uttarakhand

Kshetriya Gramin Financial Services in Uttarakhand

After its successful launch in Thanjavur district of Tamil Nadu, in June 2008, IFMR Trust’s Kshetriya Gramin Financial Services (KGFS) model has been extended to the hilly terrain of Uttarakhand.

Sahastradhara KGFS (SKGFS), a venture of IFMR Holdings, is set to commence operations in the remote areas of Tehri Garhwal, Pauri, Haridwar and Dehradun. (‘Sahastradhara’, literally “thousand-fold spring”, is the name of a sulphur spring with medicinal value, near Dehradun.)

Around 40 villages have been surveyed and locations for nine SKGFS branches identified.

Kshetriya Gramin Financial Services in Uttarakhand

The first SKGFS branch(in orange) in Agrakhal village, Tehri district

The locations are in sparsely populated rural settlements, accessed by winding roads that are often difficult to negotiate due to inclement weather. Says SKGFS CEO Anupama Joshi: "On an average, people here walk 7-8 km every day to earn a living." The main occupations are agriculture and animal husbandry.

The KGFS model employs advances in technology and financial markets to offer financial services in remote locations.

Each KGFS company set up by IFMR Holdings is a regional entity covering one or two districts. While the head office of a KGFS company is in an urban centre, branches are in rural areas.

In Uttarakhand, SKGFS follows the following criteria to select locations for its branches:

The maximum population of the village should be 1,200 people, as on March 31, 2008.

It should be at a distance of at least 7 km from an urban centre.

No more than one branch of a nationalised bank should be located in the vicinity.

Within a radius of 8 km, the maximum population should be 8,000 people.

An intermediary between people living in locations that meet the above criteria and various types of financial institutions, SKGFS branches will offer multiple financial services including savings, remittances, insurance, small-ticket loans and investments.

Recruitment and training of SKGFS field staff for the first two branches is already over. All field staff are from the region itself. Says Jagmohan, a trainee wealth manager who comes from an agriculturist family in a small village in Tehri district: "SKGFS will not only provide services to the needy but also generate employment opportunities for the youth."

The first SKGFS branch is in Agrakhal village, in Narendranagar block, Tehri district, around 40 km from Rishikesh. The area is known for its ginger production and has a large mandi (market).

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Kshetriya Gramin Financial Services in Uttarakhand