Govt rolls out Rs 1400 cr loan subsidy for rural women self-help groups
Updated: Feb 04, 2014 03:30:56pm
New Delhi, Feb 4 (KNN) Rolling out the Rs 1,400 crore interest subvention on loans taken by SHGs, the government has announced that it would provide loans to rural women self-help groups (SHGs) at rates on par with loans extended to farmers.
Interest subvention for the loans taken by women SHGs is a significant initiative under Centre's National Rural Livelihoods Mission (NRLM) programme.
Rural development minister Jairam Ramesh said a low lending rate of 7 per cent will be applicable for loans of up to Rs 3 lakh availed by women SHGs.
The move would benefit a large number of women SHGs in Odisha, Jharkhand, Uttar Pradesh, Madhya Pradesh, Bihar, Chhattisgarh and Andhra Pradesh.
While addressing the press conference here yesterday, Ramesh said that the scheme would be implemented with “retrospective effect” from April 1, 2013.
In the first phase, it would be implemented in 150 districts, predominantly in the Maoist-affected areas where such SHGs would pay only seven per cent of interest. Gradually, it would cover all 640 districts in the next five years. These districts were chosen on the basis of those in the grip of Maoist insurgency, poverty and backwardness, the minister said.
This would cost Rs 650 crore to the government and would be funded from the Rs 2,600-crore budgetary allocation to the ministry under the National Rural Livelihood Mission (NRLM). However, in the remaining districts across the country, the women self-help groups would be compensated through rebate which will cost the ministry another Rs 750 crore, taking the total outgo on subsidised loans to Rs 1,400 crore.
“In (the financial year) 2013-14, total budgetary allocation for the NRLM is Rs 2,600 crore. Out of Rs 2,600 crore, we are spending Rs.650 crore for subsidizing interest rate in 150 districts and we are spending Rs 750 crore to subsidize the interest rates in the non-150 districts,” the minister said.
“So out of Rs 2,600 crore budgetary allocation for NRLM, Rs 1,400 crore is the total allocation for subsidising interest rates,” he added.
However, in the remaining districts across the country, the women self-help groups would be compensated through rebate which will cost the ministry another Rs 750 crore, taking the total outgo on subsidised loans to Rs 1,400 crore.
"This means that they would get loan at market rate only, but if they pay it back promptly, the difference in the amount between the market rate and subsidised rate will be credited to the account of women SHGs," Ramesh said, adding that the rates would be further lowered to 4 per cent for SHGs that repay loans on time.
According to Ramesh, the idea is to provide subsidised loans to all 640 districts in the next five years. "In 2012-13, 85 per cent of bank loans to SHGs were in four southern states - Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. I have spoken to the finance minister and banks and hope that new states will be added to the list in 2014-15," he said, adding that Bihar, West Bengal, Uttar Pradesh and Maharashtra are already picking up.
Currently, there are nearly 25 lakh Women SHGs in the country. The government’s target is to double these figures in the next five years. (KNN/SD)
Interest subvention for the loans taken by women SHGs is a significant initiative under Centre's National Rural Livelihoods Mission (NRLM) programme.
Rural development minister Jairam Ramesh said a low lending rate of 7 per cent will be applicable for loans of up to Rs 3 lakh availed by women SHGs.
The move would benefit a large number of women SHGs in Odisha, Jharkhand, Uttar Pradesh, Madhya Pradesh, Bihar, Chhattisgarh and Andhra Pradesh.
While addressing the press conference here yesterday, Ramesh said that the scheme would be implemented with “retrospective effect” from April 1, 2013.
In the first phase, it would be implemented in 150 districts, predominantly in the Maoist-affected areas where such SHGs would pay only seven per cent of interest. Gradually, it would cover all 640 districts in the next five years. These districts were chosen on the basis of those in the grip of Maoist insurgency, poverty and backwardness, the minister said.
This would cost Rs 650 crore to the government and would be funded from the Rs 2,600-crore budgetary allocation to the ministry under the National Rural Livelihood Mission (NRLM). However, in the remaining districts across the country, the women self-help groups would be compensated through rebate which will cost the ministry another Rs 750 crore, taking the total outgo on subsidised loans to Rs 1,400 crore.
“In (the financial year) 2013-14, total budgetary allocation for the NRLM is Rs 2,600 crore. Out of Rs 2,600 crore, we are spending Rs.650 crore for subsidizing interest rate in 150 districts and we are spending Rs 750 crore to subsidize the interest rates in the non-150 districts,” the minister said.
“So out of Rs 2,600 crore budgetary allocation for NRLM, Rs 1,400 crore is the total allocation for subsidising interest rates,” he added.
However, in the remaining districts across the country, the women self-help groups would be compensated through rebate which will cost the ministry another Rs 750 crore, taking the total outgo on subsidised loans to Rs 1,400 crore.
"This means that they would get loan at market rate only, but if they pay it back promptly, the difference in the amount between the market rate and subsidised rate will be credited to the account of women SHGs," Ramesh said, adding that the rates would be further lowered to 4 per cent for SHGs that repay loans on time.
According to Ramesh, the idea is to provide subsidised loans to all 640 districts in the next five years. "In 2012-13, 85 per cent of bank loans to SHGs were in four southern states - Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. I have spoken to the finance minister and banks and hope that new states will be added to the list in 2014-15," he said, adding that Bihar, West Bengal, Uttar Pradesh and Maharashtra are already picking up.
Currently, there are nearly 25 lakh Women SHGs in the country. The government’s target is to double these figures in the next five years. (KNN/SD)
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