Repayment rate of COVAs loans stands at 99.71%
The Confederation of Voluntary Association (COVA) had initiated a Financial Inclusion Project (FIP) with the State Bank of Hyderabad (SBH) in July 2014 for providing business loans to artisans belonging to the weaker sections of the society. The bank had offered loans worth Rs 41.35 lakh to 272 people and as on March 31, the loan repayment
The Confederation of Voluntary Association (COVA) had initiated a Financial Inclusion Project (FIP) with the State Bank of Hyderabad (SBH) in July 2014 for providing business loans to artisans belonging to the weaker sections of the society. The bank had offered loans worth Rs 41.35 lakh to 272 people and as on March 31, the loan repayment was 99.62 per cent with just 6 borrowers defaulting Rs 15,500.
Encouraged by the results Dr Mazharuddin, president, COVA, said, “Along with SBH, Syndicate Bank has also associated for the FIP and since January 2015, loans have been given to 93 people amounting to Rs 33.58 lakh. Only one person has defaulted a loan of Rs 6,000. So the repayment rate stands at a phenomenal 99. 82 per cent. Together the repayment rate for SBH and Syndicate Bank stands at 99.71 per cent.”
“It is interesting to note that while micro finance companies charge an exorbitant 24-48 per cent interest from the poor, these loans are being made available at a nominal rate of 4 per cent interest per annum under the Differential Rate of Interest Scheme (DIR),” he added. COVA has appealed for financial support and donations to extend this project to five districts of Telangana and thereafter to other states in the country. All donations can avail tax exemptions as per the Income Tax Act.
