Repco Bank in tune with its objectives has formulated Mirco Credit schemes for poverty alleviation among rural poor more particularly among the repatriate settlements in the Nilgiris District through formation of Self Help Groups (SHGs) based on the study conducted by the bank in 2002.

The study report revealed that there was a lot of scope for implementing Micro Credit programme as every family was living in a debt trap and indepted to the local moneylenders who were charging interest at exorbitant rate at 240% which has made them to lead a miserable life and continue to live in poverty. The banks operating at the centre were not responding to the demand of the people resulting inadequacy of financial outreach by the formal banking system.

The bank which had started with 30 groups with a small credit portfolio of Rs.3.00 lakh, has now expanded its credit activities to more than 12000 groups with credit disbursement of exceeding Rs.100 crore within a period of three years and also achieving almost 100% recovery since inception. Under this model opportunities were provided for regular savings among the members of groups. A flexible approach was adopted with regard to fixing the quantum of finance extended to the groups which was mostly based on their requirements of funds, kind of economic activities engaged their capacity.

After having achieved this splendid performance, the bank has now proposed to go in for a massive expansion programme in the remaining districts all over Tamil Nadu with a focused attention on Mirco Credit programme with a lot of innovation to suit the most needy people. Accordingly a four year perspective plan for assisting 20,000 groups with credit deployment of 100 crores before March 2010 has already been drawn and is being implemented by us from the current year.

In the past we were depending on the NGOs for sponsoring of groups, capacity building activities etc., as our Bank was confined to lending only. Since the services of NGOs operating in a few centers were not satisfactory and left much to be desired for creating awareness, skill among the target groups, it was felt necessary to form a subsidiary, which should be of our own organization providing effective supporting services for our target groups. Accordingly our subsidiary under the name and style of "Repco Foundation for Micro Credit" has been registered as Section 25 company not for profit. This organisation shall be Role model for other NGOs in extending services to the self help group members.

This is a unique model, which is first of its kind in India being experimented by our Bank, wherein the target groups are sponsored to Bank by our extending credit facility and they also undertake monitoring capacity building activities of the beneficiaries etc., for improving the skill and consequently their credit absorption capacity. After developing necessary expertise in this regard, the foundation may graduate into an MFI, thereby discharging dual function of both lending as well as providing other services to the beneficiaries. There is distinct advantage in our own subsidiary playing the role of an NGO as we can have effective control over them and also ensure fair practices for the betterment of target group.