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Govt’s failure to release fund hits SHGs

Govt’s failure to release fund hits SHGs
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Govt’s failure to release fund hits SHGs. The women SHG groups in East Godavari outnumber their counterparts in other districts in the State, both in number and in the matter of securing loans.

TDP failed to keep its promise to give Rs 1 lakh to each Group

Default on payment of loans has been attributed to poll-eve promise that the loans would either be written off or infusion of fund as was clarified later. Banking sources revealed that repayment of loans by the SHGs had dwindled to below 40 per cent from the highest of 95 per cent.

Kakinada: The women SHG groups in East Godavari outnumber their counterparts in other districts in the State, both in number and in the matter of securing loans. There are as many as 90,000 groups in both urban and rural areas in the district. They used to secure advances from banks regularly.

According to bankers, the 42 scheduled banks through their network of 650 plus branches provided advances to SGH groups. The women in these groups used to repay the loans regularly. But now outstanding amount from these groups has accumulated to Rs 1,350 crore as most of the groups defaulted on payment of advances. The prime reason for this is said to be delay in the release of capital infusion fund of Rs 1 lakh as promised by TDP government during the campaign for 2014 polls.

The women in the SHG groups were promised that their loans would be written off. But later it was clarified that what was promised was infusion of Rs 1 lakh fund for each group to strengthen the SHGs. Default on payment of loans has been attributed to poll-eve promise that the loans would either be written off or infusion of fund as was clarified later. Banking sources revealed that repayment of loans by the SHGs had dwindled to below 40 per cent from the highest of 95 per cent.

The announcement by Chief Minister N Chandrababu Naidu at a public meeting in Kakinada on Friday last that the funds for the women groups would be released on or before the AP formation day 2 June has raised hopes among the bankers. If the release is to the tune of Rs 700 crore, each group will get Rs 1 lakh. When contacted, the district lead bank manager (LDM), S Jagannadha Swamy said they were expecting improvement in repayment of loans by SHGs once the capital infusion fund was released.

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