Relocation of SHG members to various places results in mounting arrears

The housing programme taken up by the Vijayawada Municipal Corporation has, in a cascading effect, impacted the ‘pavala vaddi' scheme meant for SHGs in the city.

More than 800 SHGs have become dysfunctional after the VMC relocated the slum-dwellers to Vambay Colony and other places.

The VMC allotted 5,242 houses constructed under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and 4,058 families occupied their houses so far.

The scattering of SHG members had resulted in mounting arrears to the bankers. These groups had to repay Rs.3 crore to various banks that sanctioned bank linkage loans under the pavala vaddi scheme. The banks had prepared a list of defaulters and asked the VMC to recover the loans.

The Andhra Bank, Krishnalanka branch, for instance, found that 30 groups were not functioning as per norms. These groups were not repaying the loans. The Indian Microsat, Kanuru branch, which issued linkage loans to 2,500 groups, listed 139 groups as defaulters. The KDCC, Patamata branch, came out with a list of 29 groups. The banks were yet to come out with complete data of defaulters.


The Urban Community Development (UCD) wing officials had begun the process of streamlining these groups. Members residing at the same place were unwilling to repay their share of loan. They argue that the corporation should hold “migrated” members also responsible. However, identifying the migrated members turned out to be a Herculean task for them, sources said.

The VMC had begun computerisation of the data of SHGs such as how many groups availed the loans, during which month the loan was sanctioned. The details such as whether the SHG was active, if not, the reasons for the same, and why loans were not being repaid were also being collected, officials said.

The corporation involved 48 branches of various banks in extending linkage loans.

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