Union Bank of India would provide Rs 50 crore for 100 mandal mahila samakhyas in Andhra Pradesh. The move is aimed at meeting the emergent needs of the poor.
Launching its bulk financing to mandal mahila samakhyas in the state, bank chairman and managing director MV Nair said, “In the first phase, loans worth Rs 10 crore will be provided to 20 mandal mahila samakhyas in 11 districts. The interest rate will be 10 per cent and will be covered under 13 Union Bank branches in the state.”
The loan will be in the form of cash-credit or overdraft (OD) for small duration. This would help in cutting down the borrowings from the MFIs, as many people are opting for loans from MFIs, which charge high rates of interest, he said.
“There is tremendous scope for this type of financing, which is not very high cost,” he said. This would be in addition to bank loans, which the self-help groups (SHGs) get. The loan to corpus fund ratio is 2:1.
“AP is the state of innovations. All kinds of experiments starting from biometric cards, National Rural Employment Guarantee Scheme payment and primary agricultural cooperative societies (PACS) have initiated from here. We will experiment this in AP and later move to other states,” he added.
There are around 930,000 SHGs, 36,391 village organisations and 1,099 mahila mandal samakhyas functioning in the state.
The entire process would run under electronic booking, and all the village organisations would be provided with laptops to monitor and update the detailed reports, R Subrahmanyam, state principal secretary, rural development, said.
