Sanchayeeta (Saving) Daily Deposit Scheme of Cuttack Urban Co-operative Bank

Publication Date: 2004
Published by: London, UK: Alternative Finance
Document Type: Case Study

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Can daily deposit schemes be profitable in urban areas?

This paper assesses the functioning of the Sanchayeeta (Saving) Daily Deposit Scheme (SDDS) of the Cuttack Urban Co-operative Bank (CUDB) as an innovation in microfinance.

The paper highlights that:

• The Sanchayeeta Daily Deposit Scheme of the bank contributes 10% to total deposits, and 25% of total advances are to Sanchayeeta depositors;
• The agent plays a very crucial role in the banking operations, particularly for those small traders who are unfamiliar with formal financial institutions and have modest resources;
• Judging the saving behavior of the customer is very crucial to the success of the scheme;
• Sanchayeeta borrowers report a recovery rate of 80%.

• The Scheme is financially viable and can be sustainable if present arrangements, in terms of commission, etc. continue in future.
• Any financial institution that is able to hire smart collection agents without running into problems of their regular employment with it, can attempt to replicate the scheme in urban settings.
• It appears that the scheme gradually tends to cater to relatively better off sections of small traders which may result in the loss of its pro-poor small traders' image in due course of time.

• provides a useful model for any financial institution interested in extending its outreach in cost-effective ways,
• creates large number of jobs for young people who would otherwise be unemployed.