With the COVID-19-induced job loss and resultant economic crisis crippling society during the lockdown period, the primary agriculture cooperative societies have come up with gold and interest-free loans across the State.
A few societies began offering gold loan for the first time on Monday even as the public sector banks and private banks are yet to announce new schemes during the lockdown days.
The Kanayannoor Taluk Cooperative Agriculture Village Development Bank in Kochi is one such institution that entered the gold loan sector on the day.
The bank has announced a gold loan scheme by offering up to 80% of the value of gold as loan amount for an interest rate of 10% for one year. If one could close the gold loan in six months, the interest would be 9.5%, announced the bank.
“Till now, the bank has been focusing on property-based loan schemes. However, the bank decided to move to the gold loan sector as it would not be an easy task for our customers to avail loans by pledging the property. Procurement of property-related documents for availing of a loan would not be an easy task during the lockdown period,” said P.S. Siju, manager of the Palarivattom branch.
On the day one, there were no takers for its gold loan. Such loans would be offered at the Mulanthuruthy branch located on the outskirts of the city too after evaluating the customer response, he said.
Special loans
The Vennala Service Cooperative Bank, which had offered interest-free loans for up to ₹5,000 during the early days of outbreak of the pandemic, has now started offering COVID special loans up to ₹25,000 for an interest of 5%. Under the new scheme, which was launched on Monday, ₹2 crore would be disbursed, said A. N. Santhosh, bank president.
The primary agriculture cooperative societies numbering 1606 have been asked to disburse such loans at reduced interest rates, said A. Alexander, Registrar, Cooperative Societies, Kerala.
The societies have been asked to cap the interest rate at 7%. Some cash-rich societies may offer loans at lower rates. The societies would also offer soft loans for the tourism sector to help the entrepreneurs revive the business, he said.
Meanwhile those at the State Bank of India, the public sector major, said no new loan schemes were announced in the post-COVID period. The manager of a major private sector gold loan company, which renewed the business last week, said there were not many takers for its gold loan schemes.
