India Post has inked an agreement with National Bank of Agriculture and Rural Development (NABARD) to facilitate micro-credit to women-run Self Help Groups (SHG) in eight states and north eastern states.

In this strategic partnership, India Post will lend the unparalleled reach it has gained into India’s remote villages and the credibility as a reliable family insurer through its various life insurance schemes to provide a big boost to NABARD for achieving its purpose of “facilitating credit flow for promotion and development of agriculture and integrated rural development.”

The latest agreement is inked after the resounding success of the pilot project that was implemented in Tamil Nadu as highlighted in Microcapital.org

This project was first implemented in 2006 as a pilot project in a number of post offices in two districts of Tamil Nadu…It was extended to three additional districts and all post offices in these five districts are currently participSo far, 165 SHGs have received these loans, for a total loan disbursement of Rs 1.35 million (USD 29 thousand). Additionally, 2,900 SHGs have been formed to create credit linkages with 2000 post offices in nine divisions of the state.

A presentation in India Rural Business Summit organized by Federation of Indian Chambers of Commerce and Industry (FICCI) provides finer details on the pilot’s working model, and metrics.

On the whole, India Post’s credibility among the rural and urban poor as one of the least corrupt, and hence the most reliable government organization, extensive reach, and success on a smaller  scale implementation seems to leave only the possible problems due to scaling up to worry about in this initiative.