Flicker of hope for new life in a bank rising from the ruins of catastrophe

Frontline: Bhuj, Gujarat

Up a dusty staircase in this earthquake-shattered city, men cluster around a blank computer screen. The desk on which the VDU is perched is almost the only item of furniture in the middle of a gloomy, uncarpeted concrete expanse. A moment later a generator starts, the strip lighting comes on, and, to a quiet cheer, the computer winks into life.

Up a dusty staircase in this earthquake-shattered city, men cluster around a blank computer screen. The desk on which the VDU is perched is almost the only item of furniture in the middle of a gloomy, uncarpeted concrete expanse. A moment later a generator starts, the strip lighting comes on, and, to a quiet cheer, the computer winks into life.

This is the headquarters of the Kutch Gramin bank, which specialises in lending to the rural poor. Now it is the bank's main branch as well. "The earthquake demolished our branch building around the corner, but luckily the safe was very strong, so the looters couldn't get into it," said SP Vadher, 43, an official in the finance department. "We have sent most of the contents to Bombay for safe-keeping."

Depositors are desperate to draw out their money and start putting their lives back together, but the bank needed to get its computer going first. Thanks to risky looking improvisation by a man clutching a handful of bare wires, that appears to have succeeded.

"We managed to find the generator, and from tomorrow we reopen our doors," said Mr Vadher. "All our other 33 branches save one are functioning, even where the staff are sleeping in the street and operating from a room in a half-collapsed house."

The only exception is in the town of Bhachau, 50 miles to the east, which seems to have been wiped off the map. Most of its clients are probably dead.

The Gramin bank ("gramin" means "village" in all the main languages of northern India) is modelled on the original in Bangladesh, which pioneered the idea of micro-credit for peasants, lending a village woman as little as £2 to buy chickens, which she repays out of the profits from selling eggs. The Indian version is different: instead of being a grassroots movement, the country's 196 Gramin banks are partnerships between the government and state-owned banks.

Micro-credit is essential in what the bank's annual report calls the "vast, backward border district of Kutch", which had already been crippled by more than two years of drought when the earthquake struck.

"Our smallest loan is around 1,000 rupees (£15) to groups which make and sell the famous Kutch embroidery," said Mr Vadher. "We will lend for any economic activity, to small and marginal farmers, to retail traders, to buy trucks and tractors. Most of our staff are local. I am from a village near here, and I joined Gramin after passing the banking exams."

Some of the bank's 180 staff are still missing and at least one is among the more than 30,000 killed in the disaster. "Nearly every one of us has lost someone in their family," said Mr Vadher. "We are trying to do relief work just among our own employees, finding tents for them to live in.

"When we had a cyclone in Kutch three years ago we allowed our debtors to postpone repayments. If we did not exist, people would fall into the hands of the money-lenders. We charge 13 to 17 per cent on loans. They charge at least twice that, anything up to 100 per cent. We have enough on hand to help people get back on their feet and resume economic life. That is better than relief or donations, because it gives people more dignity."

* The Independent's earthquake appeal, organised by the Disasters Emergency Committee representing 15 major charities, has so far raised £30,000 for the victims of the earthquake.