Money & Banking

Mudra loans: Applicants blame banks for seeking security

Ch. R. S Sarma Visakhapatnam | Updated on January 16, 2018 Published on October 25, 2016

Many commercial banks are fighting shy of giving Mudra loans and they are seeking security even for these loans, even though there are clear-cut guidelines to the contrary, according to many loan applicants.

They voiced the complaint at an interaction session organised with bankers by the Federation of Andhra Pradesh Industries (FAPI) here on Tuesday. BV Rama Rao, president of FAPI, presided over the session.

Swarnalatha, president of an NGO in Amalapuram in East Godavari district, said her organisation was working for the welfare of destitute women, deserted women and women in distress in general. “Many of these women have basic skills in sewing and certain other skills, but they have no capital and no assets. They can offer no security. We have been told that Mudra loans are for such women, but unfortunately Mudra loans are out of their reach, as bankers are rejecting their applications. They insist on security,” she complained.

She also complained that “loans meant for Scheduled Castes and Scheduled Tribes are being cornered by the upper castes.”

B Koteswara Rao, who runs a dal mill at Chodavaram in Visakhapatnam district, said that he had been making attempts for the past three years to secure a loan of 3 ₹lakh from the SBH, but to no avail. A Mahesh, research scholar in Andhra University, said he had made several attempts in vain to secure loans for a venture and to employ himself gainfully.

Ranganathan, General Manager, Andhra Bank, said that his bank was giving Mudra loans liberally and MSMEs would be given importance. “In fact, banks are now focusing on RAM (retail, agriculture and MSME) credit more than corporate financing,” he said.

Srinivasa Prasad, Assistant General Manager (SBI), Visakhapatnam, said viability of the projects and units was more important, and applicants should focus on the aspect. “All viable projects will be funded and for Mudra loans no security is required. We have given clear instructions,” he assured the applicants.

BV Rama Rao urged the government and banks to arrange Mudra loans at 4 per cent and he said the applicants should take acknowledgements from the banks after applying for Mudra loans. The banks should reply within a fortnight, he added.

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Published on October 25, 2016
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