Home » GENERAL » Telangana Govt Ponders New Microfinance Scheme for Minorities

Telangana Govt Ponders New Microfinance Scheme for Minorities

After the debacle of microfinance-related suicides in 2010, the division of Andhra Pradesh and Telangana has given a new scope for Telangana to re-look at the legible lending ways by private financial services and stop the pervading role of Call Loans, which charge high rates of interest and indulge in intimidatory tactics to collect repayments.

While many microfinance institutions have shunned Andhra Pradesh and Telangana, many private and public banks refuse to lend funds for distribution in these two states, owing to refusal of repayment of loans in 2009-10 due to political interference and intimidation by anti-social elements. SKS Microfinance alone had virtually written off hundreds of crores during this period.

Now that loans under microfinance model cannot be replaced entirely, the Telangana government has decided to revive it on SEWA (Self Employed Women’s Association) model. The new scheme will provide Rs.25 crore for distribution in the districts of Hyderabad and Medak from 2016-16 Financial Year.

The group-lending model enatails a group of ten people together to avail a loan of Rs.1 lakh and the government will provide subsidy for the beneficiaries who repay on time. The microfinance scheme will cater the street vendors and petty businessmen from the minority community, who are prone to moneylenders. These gorup-loans will be attached to the Bank Linked Subsidy Scheme (BLSS) of the TS Minority Finance Corporation (TSMFC).

Moreover, the beneficiaries will not be given money directly under the scheme but they get goods and commodities directly for their business, so the loan will not be misused. SEWA is already running couple of microfinance units in Sadasivpet and Sangareddy successfully and it is being roped in for the implementation of the new microfinance scheme, said TSMFC officials.

Sewa’s third branch at Tolichowki in Hyderabad was recently opened by the Deputy Chief Minister Mohammad Mohammad Ali. In addition to SEWA, Janseva Cooperative Credit Society is also being roped in for distribution of microfinance loans under the government scheme.

Leave a Reply

Your email address will not be published. Required fields are marked *