Spandana to offer Rs 50 cr loans sans collateral

Spandana, a micro finance organisation, has come out with a programme to give Rs 50 crore loans without collateral to landless small tenant-farmers in the eight districts it is operating.

G Padmaja Reddy, Spandana director, told Business Standard, "As these tenant-farmers cannot show any collateral, they fail to get bank loans. Without any alternative source of raising funds, they fall a prey to private moneylenders. Modalities of the scheme are being given finishing touches."

Under the scheme, the interest charged from farmers would be less than what cooperative and commercial banks charge, she said.

The organisation is also coming out with another innovative scheme "" help farmers buy second-hand tractors at cheaper rates.

Besides, it is also planning foray into Karnataka with the opening up of it first branch in Bangalore soon. "Volunteers and staff have already been given thorough training and education to make its work a success in that state. Poor women of slums and semi-slums as usual would be its main target group," she said.

"Last month the workers opened two branches in Vizianagaram district and one branch in Khammam district," she added.

The organisation has also started giving loans on gold jewellery for the benefit of middle and lower middle class people. For the purpose, they are constructing a strong room to keep jewellery, at the headquarters in Guntur.

"Meanwhile," she said, "The organisation's main programme of helping slum women touched Rs 800 crore in the first week of August with the number of beneficiaries being 5.36 lakh. Disbursements will cumulate to Rs 1,000 crore in two or three months well before the closure of this financial year. The loan recovery rate, at present, stands at 80 per cent."

According to Reddy, the ICICI Bank has sanctioned Spandana Rs 200 crore for executing its schemes during 2005-06, HDFC Bank 25 crore and Small Industries Development Bank of India (Sidbi) has sanctioned Rs 47 crore.