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Govt to give Rs 1,400 crore subsidised loans for rural women self-help groups

04 Feb 2014 Evaluate

Ahead of the Lok Sabha polls, the government has planned to shell out Rs 1,400 crore subsidised loans to women self-help groups (SHGs) in rural India. As per the proposal, 3 percent interest subvention given to women will be effective on loans of up to Rs 3 lakh taken after April 1, 2013. The move is likely to benefit 3 crore women in 25 lakh self-help groups across the country.

During the first phase of government’s plan, Ministry of Rural Development will provide loans to women self-help groups in the 150 identified naxal-affected districts at rate of 7 percent as against over 10 percent market rate, making it equal to the crop loans to farmers. The rates for SHGs, who repay the loan on time, would be further lowered to 4 per cent. Further, the move will cost Rs 650 crore to the government, which will be funded from the Rs 2,600-crore budgetary allocation to the ministry under the National Rural Livelihood Mission (NRLM). Meanwhile, 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, making the total cost to government as subsidised loans at Rs 1,400 crore.

For the next five years, the government has planned to provide subsidised loans to all 640 districts and to raise the number of SHGs to 60 lakh enrolling 7 crore women as compared to present 3 crore. During 2012-13, banks had given Rs 21,000 crore as loans to SHGs and 85 percent of bank loans given to SHGs were in four southern states - Tamil Nadu, Karnataka Andhra Pradesh, and Kerala.

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