The Hindu : Front Page : New education loan model introduced

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Wednesday, Jun 25, 2008
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New education loan model introduced

R. Sairam

MADURAI: A new education loan model that focuses exclusively on school education has been introduced in the district from the current academic year.

Education loans will be provided for the wards of members of active self-help groups which have a track record of good repayment for two years.

“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 told The Hindu.

It would help students from poorer sections to level off with those from urban and better-off families. A maximum of Rs. 10,000 would be given, he said, adding that it would be given at a differential rate of interest of 4 per cent.

At a district consultative committee meeting held recently, he urged the banks to give educational loans for schools.

Unlike college loans, which the students could repay upon completion of the course, no provision exists in banks for giving school loans and parents have to opt for personal loan. Hence, bank officials consented to give loans to SHG members for their children studying up to standard XII.

“Madurai requires focus on school education to increase the retention rates,” said Mr. Jawahar.

Under this scheme, no margin or collateral is required. The SHGs can avail themselves of a maximum loan of six times of their accumulated savings at any time of the year according to their requirements.

The loan will be in addition to the regular SHG loans, according to the Lead District Manager KN. Subramanian.

Repayment can be made over a period of 12 to 24 months depending upon the cash flow of the group.

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