TN govt urges banks to lend addn Rs 1,000 cr to SHGs

Chief minister of Tamil Nadu J Jayalalithaa has requested the banks in the state to provide at least Rs 1,000 crore additionally as credit linkages to self -help groups (SHGs) during the current year from the present level of Rs 1,216 crore.

A Tamil Nadu press statement said that Jayalalithaa has also requested the banks in the state to consider a shorter incubation period for well formed SHGs so that they can be assisted to access revolving fund and credit assistance.

"Higher credit is needed to ensure that the economic activity taken up is put on a sustainable path for which the subsidy to credit ratio for SHGs lending needs to be improved to at least 1: 3 from the present 1: 1.6,"she added.

In order to achieve the objective of doubling farm credit in the next three years, she has asked banks in the state to step up farm credit disbursements by 30 per cent. A large number of SHGs are being formed in Tamil Nadu this year to be supported with the revolving fund and credit linkage.

The annual credit plan for 2005-06 has been prepared with an outlay of Rs 22, 036 crore which envisages an outlay of Rs 12, 345 crore for the farm sector.

Enlarging the breadth and scope of the SHG movement to cover new members from vulnerable social groups and enabling them to undertake new and productive economic activities holds the key to enhancing supplementary income for the poor, she added.

The chief minister has also asked the banks to expedite sanctions of 171 projects under the new Anna Marumalarchi Thittam so as to establish agro-based units in every panchayat Union in Tamil Nadu with an investment of at least Rs 1 crore.

Already, under the Anna Marumalarchi Thittam a total project cost of about Rs 301.95 crore has been sanctioned for 482 units.