In a move to promote financial inclusion in rural India, Hindustan Unilever Ltd. (HUL) is collaborating with public sector bank, the State Bank of India (SBI), to open bank accounts for poor rural consumers. The collaboration will start with the launch of a pilot program in Maharashtra and Karnataka, which will leverage HUL’s Shakti Ammas or women customer service representatives who distribute the company’s products across villages. To date, 12 Shakti Ammas have opened approximately 1,000 bank accounts for rural customers. In the next one year, HUL and SBI plan to expand the project across India with a target of having HUL’s 43,000 Shakti Ammas open more than 300,000 bank accounts. Namrata Singh, TNN, Apr 7, 2011, 01.57am IST

MUMBAI: There’s fortune at the bottom of the pyramid. But as much as corporates like Hindustan Unilever (HUL) would like to tap into this pool of consumers, they would also want to ensure that the rural folks not only get access to capital, but also generate savings. In a step to promote financial inclusion in rural markets, HUL’s ‘Shakti Ammas’, a network of self-help groups that distribute the company’s products in remote villages with a population of 2,000 and less, will now be opening bank accounts for people.

HUL has tied up with leading public sector bank, State Bank of India (SBI), to kick off a pilot project on financial inclusion in Maharashtra and Karnataka. At present, 12 Shakti Ammas, as customer service providers, have opened around 1,000 accounts, and the plan is to roll out the project across the country in the next 12 months. With a network of 43,000 Shakti Ammas enrolled with HUL, in excess of 30 lakh bank accounts are expected to be opened in the next one year-each Shakti Amma is expected to open at least 70 accounts.”The objective is to bring about financial inclusion in rural areas. By doing this, we strengthen the Shakti network and also provide villagers with the opportunity to access capital,” said Hemant Bakshi, executive director, sales & customer development, HUL.

As for the bank, the project would lead to more customers in rural areas and a platform of trained personnel who are capable of managing bank accounts in remote areas. It also assists the bank in meeting the objective of improving financial inclusion, which finance minister Pranab Mukherjee has been urging the banks to achieve.

HUL will expand the project in phases. Most of the villages where the project will be carried out have a population of 2,000 or even less. “In most villages where we have started the project, we have achieved 20% penetration-i.e. almost a fifth of the households in the villages are participating in the financial inclusion project. Interestingly, almost 80% of the participants are women who find this a friendly and accessible way of reaching the formal financial system,” said an HUL spokesperson.

Financial inclusion, a key determinant of sustainable and inclusive growth, is capable of unlocking the potential of savings, consumption and investment propensities of the poor. The finance minister had announced in Budget 2010-11 that all unbanked villages with population of 2,000 and above will be provided with basic banking services by March 2012. Banks propose to provide banking services to these villages by either opening branches or through business correspondents and technology that facilitate branchless banking in the hinterland.

Reports suggest that only 5% of around 6 lakh habitations in the country have a bank branch. The section of population with a bank account is just about 40%. Experts said that the idea of financial inclusion should be more broad-based, so that people are able to not only access credit but also various financial services and products through the banking access point.