Bangalore: Indian bank has opened a microsate branch in Bangalore on Tuesday. First such branch in the state, this specialized outlet will exclusively provide finance for urban self-help groups (SHGs) and non governmental organizations (NGOs) located in the area.

To provide the urban entrepreneurs formed as self-help groups with much needed finance, Indian Bank had innovated the concept of specialized branch for disbursing micro-finance to such SHGs and NGOs and named it as a microsate branch. This branch caters exclusively to urban poor and helps them get finance at easy terms thereby protecting them from the clutches of greedy moneylenders.

Touted as a 'one-stop shop' for the financial needs for urban poor, the microsate branch also takes measures to improve the standard of living of these people.  Small entrepreneurs like those making soaps, aggarbattis, candles, etc., which do not require sophisticated equipment and technical skills are provided small loans at very lenient terms. At present there are 12 microsate branches located across India.

The branch was inaugurated by the CMD of Indian Bank, M.S. Sundar Rajan and he said that by the end of March, the branch will release Rs. 25 crores for disbursing funds to SHGs. The loans given to SHGs are characterized by a high recovery rate of around 95 percent and this micro-finance scheme has given a much needed boost to the small entrepreneurs.

Other loan products, specially designed to provide security and promote education among the wards of SHGs have also been floated by the Indian Bank. Vidya Shobha, provides easy education loans and Janashree Bima Yojana is a health-care policy  which offers health insurance at a very low premium for members of SHGs.