IIITB, Nabard, Syndicate Bank in rural credit databank pilot project

A group of banks and software companies has backed a project by the Indian Institute of Information Technology Bangalore (IIITB) to make giving loans to people in the villages more effective.

The project is expected to result in both a framework and a software application for "efficient credit delivery in rural areas", IIITB officials told Business Standard.

The idea is, various agencies collect data about villages that aren't being shared or analysed in a holistic fashion. So knowing how poor a farmer is along with how the rest of the village is doing will give banks a better idea of how much money the farmer will be able to repay and over what time.

Windows computer operating system maker Microsoft, which recently set up a research centre here to tap the rural market, has initially funded provided Rs 2.5 crore for the project.

ING Vysya and the National Bank for Agriculture and Rural Development (NABARD) are also involved and Syndicate Bank is "expected to come on board," the officials said.

A pilot is being run in Honnavara taluk, in coastal Karnataka, to test the concept: "We want to store in one place data collected by different agencies, including government and non government organisations. It will be put in a database and made available to those who helped create the database."

The data could include a villager's age, the land and cattle he owns or doesn't, and the people he must fend for. It will also aid forecasting, for instance, future demand in the market for produce that the village grows, so a bank may know the chances of recovering its loans and making some profit too.

One of the ways the villagers will interact with the banks, in this project, will be through kiosks, which could be customised or even branded to represent various banks, or act as a common point of access.

The data centre itself could be located in a bank or even with a private agency. It could be hosted by whoever commercialises the framework.

The project is being led by the centre for banking and information technology at IIITB. The "architecture of the software solution" could be proprietary to the institute, which could then licence it to the banks, IIITB officials said.