Mulkanoor Co-operative Rural Bank brings hope to villages in Andhra Pradesh

Reddy (right) with MCRB beneficiaries: Management rooted in common senseThe rhythmic chug of a water pump has acquired a familiar ring for the nearly 40,000 residents living in 14 villages of Karimnagar district in the backward Telangana region of Andhra Pradesh. In many ways it also epitomises the phenomenal changes that this 64 sq km patch of arid countryside has witnessed in the last 25 years, thanks to the efforts of a co-operative rural bank and its mentor, walrus-mustached A.K. Vishwanath Reddy.The Hyderabad Management Association's Manager of the Year (1981) award to 55-year-old Reddy last fortnight coincided with the silver jubilee celebrations of his brain-child, the Mulkanoor Co-operative Rural Bank (MCRB).Reddy's pioneering venture began 25 years ago on a modest scale when the young college drop-out thought of ways to borrow money to raise a kharif crop on his rain-fed lands. The idea of opening a co-operative gained momentum among his farmer friends, 373 villagers doled out Rs 2,790 as share capital and the MCRB was born on July 27, 1956.In the initial years many were reluctant to join since they feared that it was risky to pledge their land to borrow money. They had a lot to lose if the rains did not come and the crops failed.Enlarged Scope: From its role of advancing loans, the MCRB enlarged its scope to that of a multi-service co-operative society that provided a variety of economic, production, marketing, consumer and welfare services. Today, the MCRB is the envy of villages ringing its area of operations and rural bankers everywhere.It has 6,000 members with a paid-up capital of Rs 18 lakh, deposits totalling Rs 25 lakh, reserves of Rs 44 lakh and property worth Rs 38 lakh. A better measure of its progress is reflected in its turnover rate which has grown from Rs 35,000 in 1957 to Rs 2.50 crore at present.Most of the rural credit societies which mushroomed during the Nehru era have succumbed to unsavoury experiences and failed to deliver the goods. The MCRB's success - a rare exception - has been attributed to the sheer common sense of its managers, especially Reddy who has groomed its operations ever since its inception except for a three-year break.Reddy emphasises that the people's trust is a paramount factor in the growth of such an institution. "We have educated ourselves about the roles and responsibilities in a co-operative. This is why we have had few bad debtors," says he.Emphasis on agricultural development was so strong that at least 25 per cent of any loan had to be taken in kind in the form of seeds or fertilisers. When the electrification of the MCRB villages began, it advanced loans for pump sets, bought and distributed high-yielding varieties of seeds and set up facilities like rice and oil mills and godowns to process, stock and market paddy, sorghum, maize and eggs produced by the farmers.P.V. Pushpa, a widow, takes pride in the increased yields on her ten-acre farm. Says she: "We have not been able to increase our land, but with new crops and a small orchard for oranges, I have sent three children to college." Mallamma, 48, owner of a four-acre plot echoes the new found confidence of the villagers: "Had it not been for the bank my sons would have spent their time at the arrack (country liquor) shop and made us landless."Development Schemes: As the number of members increased the State Bank of Hyderabad stepped in to finance the cooperative. Several development programmes of the Government were implemented in the area by the co-operative itself.With planners emphasising the area development approach in the early '70s, minor irrigation schemes and dairy and poultry farming were begun with the help of the Agricultural Re-finance and Development Corporation. Farm graduates were also appointed to popularise modern agro practices.Impressed by MCRB's performance the National Cooperative Development Corporation funded the purchasing of farm machinery like tractors and silt-removing cranes to be loaned out to members.With the society making a profit of 6 to 10 per cent and with its increasing community responsibility, the MCRB bought rural debentures worth Rs 1.50 lakh from the state electricity board to electrify irrigation wells.In spite of its success, acknowledged by the Government, there have been few attempts to study the society's growth and performance. Notable exceptions were some of the nationalised banks and several cooperative institutions who sent their staff including senior officers for a stint with the MCRB (staff: 115) to study rural banking operations.Among others who evinced interest was the Multicoop Service Group (MSG), an organisation of co-operatives. Says MSG's Executive Director, M. Rama Reddy: "No other economic institution provides a forum for equal participation in decision-making to all sections of the community. Politicians and bureaucrats willing, the Mulkanoor success can be repeated anywhere if its management practices are followed."The Landless: A distinct failure of the co-operative is in its effort to help the landless poor who account for half of the 40,000 people living in the 14 villages. Argues Reddy: "Show me a successful experiment in rehabilitating the landless in a sustained manner and I will do it. Subsidies and doles have only made their condition worse. If we are to subsidise them we cannot declare dividends or expand our activities."The MCRB's success story is perhaps best summed up in the words of one of its Harijan members, Sadhur Mondiah. Says he: "Outsiders can never realise how our lives have changed. Thirty years ago we hardly had any clothes to wear and ate maize. Now we have clothes and eat rice. This is the change that people in the city cannot understand."Published By: AtMigration Published On: Nov 14, 2013 13:46 IST--- ENDS ---

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Mulkanoor Co-operative Rural Bank brings hope to villages in Andhra Pradesh

The rhythmic chug of a water pump has acquired a familiar ring for the nearly 40,000 residents living in 14 villages of Karimnagar district in the backward Telangana region of Andhra Pradesh.

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