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Telangana to launch microfinance scheme
Inspired from the success of a non-governmental organisation (NGO), the Telangana government is planning to introduce a dedicated microfinance scheme for the street vendors and petty businessmen from the minority community, who highly prone to the exploitation by loan sharks.
- To help street vendors avert exploitation by daily financiers
- 25 crore earmarked for Hyderabad, Medak districts
- Will be implemented from 2016-17 financial year
- Scheme inspired from the success of an NGO
Hyderabad: Inspired from the success of a non-governmental organisation (NGO), the Telangana government is planning to introduce a dedicated microfinance scheme for the street vendors and petty businessmen from the minority community, who highly prone to the exploitation by loan sharks. The scheme will be implemented in Hyderabad and Medak district from the coming financial year of 2016-17 on a pilot basis and Rs 25 crore has been earmarked for the same. Based on the success, the scheme will be extended to rest of the districts eventually.
According to officials, the new scheme will provide a loan of minimum Rs. 1 lakh to a group of 10 hawkers with Rs. 80,000 subsidy. These loans would be attached to the existing Bank Linked Subsidy Scheme (BLSS) of the TS Minority Finance Corporation (TSMFC). For instance, if a hawker or small trader wants to avail the loan, then he or she will have to join a group of 10 beneficiaries.
The banks will provide the loan to this group. On the lines of BLSS of TSMFC, the beneficiaries will get 80 per cent subsidy on Rs. 1 lakh loan. “The interesting part of the scheme is the beneficiaries won’t be given money directly, instead they will be supplied the goods and commodities they need for their business. This is to avoid misuse of money and to have proper accountability,” said an official of TSMFC.
Reportedly, the scheme was inspired by the success of the renowned Self Employed Women’s Association (Sewa), which is running two of its microfinance branches in at Sadasivpet and Sangareddy successfully. Sewa helps the street vendors and small traders by lending loans at lower interest rates through a hassle-free process.
The two branches of Sewa have reportedly distributed the loans worth Rs. 8 crore to the small traders and recovered the amount successfully. The Chief Minister was said to be intrigued by this news and had asked the officials to prepare a microfinance programme on the similar lines. He wanted to expand this scheme once it is successfully implemented in Hyderabad and Medak district in the 2016-17 financial year.
Sewa’s third branch in Telangana was opened at Tolichowki in Hyderabad by the Deputy Chief Minister Mohammad Mohammad Ali recently and it has 650 members now. Besides Sewa, another city-based NGO Janseva Cooperative Credit Society will also be involved in the processes of granting of loans, the furnishing of bank guarantee and the recovery. The government is looking forward to rope in more NGOs to implement the scheme smoothly.
