The reluctance of many banks to provide credit under the MUDRA (Micro Units Development and Refinance Agency) Yojana was strongly objected to by the participants in the MUDRA’s promotion campaign here on Saturday.
Union Minister of State for Science and Technology Y.S. Chowdary was the chief guest for the event.
In a question and answer session moderated by Mr. Chowdary, the proceedings of which were taken note of to redress the grievances ‘at the earliest’, several prospective entrepreneurs narrated how their dreams to set up small businesses crashed due to outright refusal by the banks to fund their projects or imposition of conditions that could not be easily fulfilled.
Mr. Chowdary himself expressed dissatisfaction with the lackadaisical approach of banks to such schemes which, he asserted, had the potential to give a big boost to the economy.
He said there was a lack of proper understanding of the purpose of the MUDRA scheme and the manner in which it was to be implemented. Banks appeared to be sending away a large number of applicants though they met the eligibility criteria like their proposals qualifying for loans and having good CIBIL (Credit Information Bureau of India Limited) scores.
On the other hand, there were a substantial number of units sanctioned but not grounded under the MUDRA scheme for various reasons due to the absence of proper monitoring.
Interestingly, some of the MUDRA beneficiaries drew a blank when Mr. Chowdary asked them whether they knew the rates of interest to be paid by them and in what time frame. This, he said, suggested that the project proponents were mere dummies and the money was apparently diverted for purposes other than those the loans were meant for.
Lack of awareness
He blamed the banks’ inability to achieve the targets under MUDRA on the poor levels of awareness and called for efforts to popularise digital payments through channels like BHIM (Bharat Interface for Money) and JAM (Jan Dhan-Aadhaar-mobile) trinity to promote cashless transactions. Water Resources Minister Devineni Umamaheswara Rao said banks were far removed from the ground realities and the aim of the much-needed financial inclusion scheme like the MUDRA.
Machilipatnam MP Konakalla Narayana, ZP Chairperson Gadde Anuradha, MLA Gadde Rammohan, Mayor Koneru Sridhar, Andhra Bank MD Suresh Patel, RBI General Manager S. Subbaiah and Department of Financial Services Deputy Director General Anjana Dube were among those present.
