Rickshaw Bank, a new loan plan

The idea of a Rickshaw Bank, the first of its kind in the country, was mooted by Dr Pradip Kumar Sarmah, who runs an NGO, after he conducted a survey and found that most of the rickshawpullers did not possess a rickshaw of their own.

"Ninety five per cent of the rickshawpullers hired the rickshaw and a major part of their meagre earnings went in payment of rent which I thought was very unjust", says Sarmah, who heads a NGO, Centre for Rural Development.

The rickshawpullers could not approach any bank or financial institution as most of them did not have a permanent address and nobody was willing to introduce them, he says.

Against this backdrop, Sarmah conceptualised the idea of a Rickshaw Bank, a micro-credit scheme, under which a rickshawpuller would be given a package deal comprising a rickshaw, a license, uniform, photo-identity card and an insurance cover.

The entire package initially cost Rs 7,000 but now with the introduction of VAT and modification of the rickshaw design, the cost has gone up to Rs 9,000, he says.

The Bank was launched in November last with 80 youths receiving the loan but now there are 350 rickshawpullers who have availed of this package, Sarmah says.

The initial funding was provided by corporate houses ONGC, OIL and Hindustan Lever Ltd with each company sponsoring 100 rickshaws each.

The companies advertised on the back of the rickshaws and included social messages in Assamese, thereby fulfilling their social responsibility as well as acquiring mobile visibility.

Sarmah says that the insurance cover provided to the rickshawpullers have instilled a sense of security to them as he himself has been insured for Rs 50,000, the vehicle for Rs 5,000 and the third party insurance is for two passengers of Rs 25,000 each.

The rickshaws given to the pullers have also been innovatively designed by the design department of Indian Institute of Technology, Guwahati to suit the conditions here.

"We needed rickshaws which could weather rain in the North-East. The rickshaw designed by IIT, Guwahati, is 40 per cent lighter than the old rickshaws and has ergonomic advantages also. The seat is flatter and the rickshaw is safer because it does not tilt while taking a turn," Sarmah says.

Sarmah also got eight youths trained initially at IIT in assembling the rickshaws and the unit was set up under the supervision of the Rickshaw Bank where 22 people are currently employed.

Sarmah says service stations have been set up in eleven areas of the city so far where rickshaws are repaired and the puller can also pay their loan to the person managing the station. The instalment payment is Rs 25 daily with two of the pullers having repaid their loans so far.

The income of most of the rickshawpullers has registered an increase of 60 per cent and they are encouraged to save as most of them can now open an account either in the post offices or banks with the help of their photo-identity cards.

Sarmah says while conducting the survey they found that fuel for cooking was a major problem for most of these people and so it was decided that once their savings reached Rs 1200, they could take an additional loan of Rs 800 from the Rickshaw Bank for an LPG connection and 30 people have been provided with it so far.

Health was also an area of major concern and a deal has been finalised with Sankardeva Nethralaya in Guwahati and they have agreed to give free treatment to them and their family.

Sarmah had recently attended an International Seminar on Fostering Private Sector Development and Leadership at Geneva where several developing countries had evinced interest and wanted to start the project in their countries.

The Bank was also considering to offer franchisees at each district headquarters in the state and issue hundred more loans in Guwahati and initiate the project at Noida, near New Delhi.