NEWS & ADVICE : PERSONAL LOAN
Loans at lower interest for women SHGs
By Neelima Shankar
Dec 7, 2007
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Pune: The women self help groups (SHGs) movement in India is all set to get a tremendous boost with the Government keen to provide softer loans to these groups. The Minister for Women and Child Development Harshvardhan Patil said that SHGs have a good track record of loan repayments and providing loans at reduced interest rates will give a great push to the movement.

The Minister proposed a reduction of 2 percentage points in the interest rates on loans to women SHGs. Currently these groups receive loans at a rate of 6 percent, it is expected to get down to 4 percent once the proposal is approved. Women SHGs in the state can presently avail a loan of Rs. 25,000 and the proposal to reduce the interest rate will be placed before the State Assembly in the next budget session.

Speaking at the inauguration ceremony of the annual Bhimthadi Jatra, an exhibition-cum-gathering of SHGs at Agriculture college he said, "The State’s nearly four lakh SHGs had helped women from the lower economic strata and it was time now for them to act as pressure groups to expedite developmental works in their village."

The Minister announced a contribution of Rs. 2 lakhs towards organizing the exhibition and a proposal to allot 10,000 sq. feet of space in Pune and Pimpri-Chinchwad to enable the SHGs to market their produce. A 50 percent discount will also be provided to all SHG stalls at functions organized by State Agriculture Marketing Board.

The importance of providing micro-credit to small entrepreneurs, individuals, farmers and SHG's have been demonstrated by the Grameen Bank of Bangladesh, which revolutionized the lives of millions of poor people. Efforts have been made by co-operative banks in both the rural and urban sector towards providing micro-credit. Now the trend is catching up with mainstream banks also chipping in with micro-credit schemes. For the distribution of economic growth to be more widespread and equitable, provision of micro-credit at reduced interest rates and lenient terms is the need of the hour.


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