Co-op bank promotes inclusion for India’s nomadic tribes

The Kalapur Co-operative Bank issues loans on a trust basis after building up relationships through social workers

A co-operative bank in Gujarat, India, is offering accounts to members of nomadic tribes, who have no permanent address or proof of income, on the basis of trust.

The Kalupur Co-operative Bank in Ahmedabad is the only independent bank in the country to issue loans to members of the Vimukta Jatis – who have taken up around 600 of its 4,500 accounts dedicated to microfinance, reports the Hindustan Times.

Since 2006, the bank has issued loans of Rs 50,000 to 100 nomadic tribals to purchase houses under a government scheme, and disbursed loans of a maximum of Rs 25,000 to others to expand their small businesses at a 10% rate of interest.

The bank can issue loans on trust because it has built up long-term relationships via the Vicharata Samuday Samarthan Manch (VSSM), an Ahmedabad-based organisation that works with nomadic tribes.

Bank staff join social workers from the VSSM on visits to tribe members to encourage to them to open savings accounts. The Hindustan Times report says many of them do not know what a bank is, or fear being arrested if they try to enter one. Others do not have a strong concept of months or dates, making it difficult to repay monthly instalments on loans.

VSSM, founded by activist Mittal Patel in 2004 to improve the status of India’s nomadic tribes, sends workers to collect instalments on loans, while the bank has a mobile van unit that travels into the rural areas to collect savings deposits.

It says the Kalupur Co-operative model is more suited to the needs of tribe members, many of whom are turning traditional practices into small businesses and selling goods.

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