Madurai has brought to light a new education loan model in India. Starting this current acadmenic year, a new education loan model with exclusive focus on school education will be introduced in the district.
These loans would be provided to the children of members of various active and responsible self help groups available in the district. Having a good track record of repayment for two years is also a very important criterion.
“In rural areas, many parents are poor and not able to meet the expenses incidental to their wards’ education and other schooling needs. This loan will come in handy for them,” Collector S.S. Jawahar said.
He believes that this new loan system would help students from poorer sections rise to the academic level of those from urban and better-off families. Explaining about how this loan would work, he said that a maximum of Rs. 10,000 would be given. He added that it would be given at a differential rate of interest of 4 per cent.
This all was decided in a district consultative committee meeting held recently, where he urged the banks to give educational loans for schools.
Jawahar pointed out that unlike a provision for college loans, no bank gives loans for school education, and parents have to take a personal loan for their children’s education. Also, college loans can be repaid by the students after the completion of the course. Hence, bank officials consented to give loans to SHG members for their children studying up to standard XII.