The members of Self Help Groups in the Andhra Pradesh will get interest-free loans up to Rs 5 lakh from January 1.
This was announced by the Chief Minister, Mr N. Kiran Kumar Reddy, in the Rachabanda programme at Shadnagar in Mahabubnagar district on Friday. However, women would be eligible for interest waiver only if they ensure prompt repayment.
As banks were now charging 14 per cent interest on loans to self help groups, the interest-free loans would cause a financial burden of Rs 1,400 crore on the State Government, the Chief Minister said.
Out of Rs 22,000 crore loans being extended by banks under bank-linkage programme, Rs 10,000 crore was being given in the State alone. Referring to the ‘Pavala Vaddi' scheme, Mr Reddy said Rs 875 crore loans disbursed during the present financial year.
The Govt had a target of disbursing Rs 10,000 crore loans to poor women this year. The self help groups in the rural areas would be given Rs 9,000 crore loans while those in the urban areas would get Rs 1,000 crore. In the last five years, Rs 800 crore was given to the poor women under the scheme, he added. There are 1.11 crore women in the State in self help groups.
To cater to the micro credit rudiment, the government has set up a cooperative credit society under the name ‘Stree Nidhi' with an initial corpus of Rs 1,054 crore, Mr Reddy said, according to a release.
Keywords: interest-free loans, Rs 5 lakh, self help groups,
