After studying this chapter, you will be able to:
Point of Contact (POC) Business facilitators help the business in several ways. Consider the following (illustrative list only):
The term business facilitator is formally defined in the financial sector as intermediaries performing a host of functions linking the banks / financial institutions and their potential clients (Concept Elaboration #1).
Concept Elaboration: Business Facilitators in Financial Sector
Business Facilitators are intermediaries such as NGOs/ Farmers’ Clubs, cooperatives, community-based organizations, IT-enabled rural outlets of corporate entities, Village Knowledge Centres, Agri Clinics/ Agri Business Centers, Krishi Vigyan Kendras and individuals like insurance agents, retired bank employees/teachers etc for providing facilitation services. Such services may include
(i) identification of borrowers
(ii) collection and preliminary processing of loan applications including verification of primary information/data
(iii) creating awareness about products, provide advice on managing money and debt counseling
(iv) processing and submission of applications to NABARD Financial Services Limited (NABFINS)
(v) promotion and nurturing Self Help Groups/ Joint Liability Groups/ Producers’ groups
(vi) post-sanction monitoring
(vii) monitoring and handholding of Self Help Groups/ Joint Liability Groups/ Credit Groups/ Producers’ groups etc.
(viii) follow-up for recovery, however, they shall not engage in cash handling including disbursements, collections, etc.
Business facilitators may be distinguished from business correspondents who may be defined as ‘banks in-person.’ These individuals and entities actually provide banking and financial services. Obviously, for this reason, business correspondents are more closely regulated than business facilitators who do not engage in the banking and finance business in the sense of handling deposits, repayments, etc.
The government facilitates business not only by formulating business-friendly policies but also by creating an institutional apparatus for the implementation of those policies. In the preceding chapter you have learned about the policies; in this chapter, our focus is on institutions.