Microcredit in post office: study on the attitude of postal staff towards SHG post office linkage programme

Abstract

The Department of Posts (Indiapost) is the Universal Service Provider for mails in India. Indiapost offers communication services (Letters, Postcards and Registration), transportation services (parcel and logistics), financial services (Savings Bank, Money Order, Insurance) and premium services like Speedpost. It has a vast network of around 150,000 post offices with 89 % of them in rural areas. Indiapost is providing savings bank services for more than hundred years. The Post Office Savings Bank is one of the oldest and largest banking institutions in the country. It operates currently around 20 crore accounts. Indiapost in the recent years has focussed on partnering with various other financial institutions to enlarge the range of products it provides e.g Western Union Money transfer and UTI Mutual Fund. There is a proposal by Indiapost to set up Post Bank of India (PBI). The aim of the Postbank is to provide full banking services primarily to the rural poor who still do not have the privilege of modern banking facilities and have to depend on the informal sector for their credit requirements. In line with the above initiatives of retailing new financial products and the evolving policy approach of setting up a Postbank, Indiapost started a pilot programme in association with NABARD for disbursement of microcredit in its rural post offices. The postmasters who are involved in this microcredit programme are largely branch postmasters (the rural post office is generally called a branch office) who are called Gramin Dak Sevak Postmasters. This study seeks to examine the attitude and motivational levels of the postmasters in disbursing microcredit in post office. The purpose of the research is to understand the attitude of the postmasters towards their clients, their views on NGOs involved in post office work, their attitude towards objectives of the programme and their levels of motivation in disbursing microcredit. The study shows that majority of the postmasters reside near the village they serve and have higher levels of motivation to disburse microcredit. This could be due to their positive experience in this programme for the last 3-4 years. However they lack clarity on the objectives of the programme and have issues in understanding whether the programme is to serve the rural poor or to generate revenue for the department. Postmasters perceive that recovery of loan is an important factor in selecting group members while forming groups. This goal ambiguity may override the programme objective of serving the rural poor. The postmasters have a positive view of the poor and SC/ST and view female borrowers as more trust worthy than male borrowers. Postmasters do not view the work of NGOs associated with post office microcredit work favourably. They have a negative view of the work of NGOs associated with post office microcredit work. The study concludes that Indiapost should design its training programme to remove goal ambiguities and leverage the positive levels of motivation of postmasters and their positive view of their clients to effectively disburse microcredit to the rural poor.