The target area of Samhathi has more than 85% people depending on daily wages/income for living and, despite their hard work, their financial situation only recorded negative growth over the years. A major reason for this situation is the financial slavery imposed up on them since generations through a crooked financial system controlled by middlemen and money lenders who charge 36% to 120% interest on the loans they provide to the poor traditional fisher folk, traditional coir workers and other sections of workers. Since most of these families depend on the sole income of their male member for living and nearly 85% women are either unemployed or underemployed, often they are compelled to approach the middlemen and the money lenders and that led them into a never-ending vicious debt cycle, where more often fresh loans are sought to keep paying the interest of existing loans. It was in this situation Samhathi entered the scene in 2001 and organized people under Self Help Groups (SHGs). During the past 15 years a network of more than 1600 SHGs was formed and total amount of transactions crossed 780 million Indian Rupess (11.14 million € ). So far the transactions were mostly routed through tie-up arrangements with selected commercial banks and so the funds made available remained inadequate. This has prompted Samhathi to move on to its own village based People’s Banking System to ensure sufficient financial resources are available to the villages through the SHG network to fully liberate the target 80 villages and 0.42 million people. It is in this context Samhathi has launched a 10-year long project called ‘Samhathi-Vision 2025’ and planned further widening and deepening of its interventions in the local economy, with each village having its own banking structure to help them manage all their financial resources and needs.
Every week all the SHGs/OFSHGs hold their meetings and along with other discussions and social matters, they involve in financial transactions – put in savings, sanction loans, accept repayments of loans, collect chit funds, put in savings to Higher Education Fund etc. The PB covers almost all the financial needs of the families and so it works as a total platform for the financial resource management of the village. Each Sangham (Village unit) has a branch of the PB under it and the banking activities are linked to other activities aiming the long term development of the families involved
The People’s Banking of Samhathi is manned and managed by professional banking personnel with a core banking software system to support. The software for the Core Banking is managed by a reputed Software Company while the data management is under the care of a multinational data management firm. The transactions aim to reach 1200 million Rupees ( 17.15 million € ) by the end of 2018 through PB’s 80 branches, seven Zonal Offices and the Central Office. The current growth rate indicates a higher volume of transactions and so the target could be reached earlier.