The District Kudumbasree Mission has embarked on a financial awareness drive — ‘Lakshya’ (Linkage Assistance to Kudumbasree System-Half Year Action Plan) — to free neighbourhood groups (NHGs) from the clutches of illegal moneylenders and connect them to approved banking firms in the district.
The new initiative, supported by the National Bank for Agriculture and Rural Development (NABARD), aims at covering over 27,618 neighbourhood groups in various parts of the district.
As per a study conducted by the Kudumbasree Mission, a major portion of the earning of these neighbourhood groups goes to unlicensed moneylenders who offer credits at higher interest rates.
25-member group
A major reason for this flow of money was reportedly the complicated formalities being adopted by legal banking firms in sanctioning the amount.
It is this void that the campaign mainly strives to address.
“For Lakshya, we have formed a 25-member task group comprising retired bank managers and microfinance resource persons, who will assist the women to link their neighbourhood groups with an approved bank and get loans at an affordable interest rate,” said N.K. Hareesh, District Kudumbasree Mission Assistant Coordinator.
The group members need not engage themselves with the application procedures and paper work as these Lakshya team members will do this for the groups, he added.
For 15,000 groups
Under the new initiative, the banks in the district will disburse over Rs.150 crore as credit within a six-month period.
It will benefit over 15,000 best performing neighbourhood groups in the initial stage. Each group will be eligible for a loan amount of Rs.1 lakh and it will be later on disbursed as credit among members within the group.
Matching grant
To encourage the drive, the banks have declared a special ‘matching grant’ of Rs.5,000 to each of the linked groups. In the first phase, around Rs.7.5 crore will be disbursed as matching grant alone.
Since the project is implemented with government subsidy, the interest rate for the loans will be slashed to seven per cent.
“So far, 1,200 neighbourhood groups have received loans from the linked banks under the special drive. The total amount in the district will be Rs.172.5 crore, including the cost for the financial awareness drive,” Mr. Hareesh said.
Kudumbasree officials say the groups have witnessed a steady growth in their income with the popularisation of the Mahatma Gandhi National Rural Employment Guarantee Scheme. Now, a woman attached to the scheme nets an average of Rs.15,000 to Rs.20,000 a year, which the moneylenders target.
