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Fall in SHGs’ loan repayment rate in EG
The loan repayment rate stood at 70 per cent this year and is falling further. Two reasons were attributed to it. Firstly, bank managers are not in touch with the SHGs and the borrowers are not attending the monthly meetings. Bank managers should visit the borrowers at least once in three or six months to find out their problems.
Kakinada: The loan repayment by SHGs is falling in the district. Earlier, East Godavari district topped in implementation of loan scheme for SHGs.
The loan repayment rate stood at 70 per cent this year and is falling further. Two reasons were attributed to it. Firstly, bank managers are not in touch with the SHGs and the borrowers are not attending the monthly meetings. Bank managers should visit the borrowers at least once in three or six months to find out their problems.
The loan amount of Rs 977 crore had been disbursed to 1.07 lakh women SHGs operating in both urban and rural areas in the district in the current financial year 2015-16 against Rs 1,250 crore in the previous financial year 2014-15.
It may be recalled here that the SHGs have been receiving loans since 1994. There were only 3,500 SHGs in 1994 and the loan amount disbursed in the inaugural year was only Rs 5.50 crore.
Many women SHGs in the State have defaulted on repayment of bank and financial institutional loans as the TDP government which assured to give Rs 1 lakh to each women SHG, had sanctioned only Rs 30,000.
When contacted East Godavari lead bank district manager S Jagannadha Swamy said the key take away from the recently-held meeting between State-level Bankers Committee (SLBC) and AP government was that it is imperative for SHGs to create assets and generation of sustainable livelihood resources. He said focus of SHGs need not be confined to internal loans and their repayment, but be extended to creation of permanent sustainable livelihood avenues.
He said the loan amount of Rs 30,000 had been sanctioned for empowering women from poor families. The remaining amount of Rs 70,000 will be released by the government soon, he added.
He said some of the members of self-help groups have been prompt in repaying their dues and hence banks are encouraged to sanction more loans to them. He said the banks were prepared to sanction loans for groups that were prompt in repayment of loans given to them.
He said each self-help group had 10 members and were opening account in the name of the group with the bank. He said steps had been taken to ensure sanction of loans for maximum number of applicants by March-end.
He said about 85 per cent of SHGs were run by women and highlighted the importance of the self-help groups and their contribution to the nation’s development. He said if the women SHGs failed to repay loans obtained from the banks, the banks would hesitate to process the applications for loans forwarded by newly formed groups.
