A women’s rights group has written to Finance Minister Nirmala Sitharaman, urging that bank loans to women self-help groups (SHGs) be made interest free to help those in the unorganised sector who have lost their jobs and are unable to repay their loans.
“Nearly six crore women are members of SHGs with bank linkages in both urban and rural areas. They are utilising these loans for income generation activities, namely selling fruits and vegetables, groceries, dairying, agriculture and also for their children’s education, health and other family expenses,” the All India Democrative Women’s Association (AIDWA) wrote, adding that banks apply exorbitant compound interest rates of 18-24%, which are exploitative considering that most women, who are part of SHGs, live in extreme poverty.
Last month, in her announcement on the relief package for the country under lockdown, the Minister doubled the limit for collateral-free loans for SHGs from ₹10 lakh to ₹20 lakh. It is this loan amount that the AIDWA wants to be offered interest free. The AIDWA is the women’s wing of the Communist Party of India (Marxist). They also demanded that a moratorium on EMIs for three months announced by the Minister be further extended to instalments on loans taken by the SHGs and the interest amount accumulated be waived.It has also proposed that loans at 0% interest rate be offered to women in SHGs till the situation normalises.
The AIDWA has appealed to the Minister to ensure recovery of loans by Micro Finance Institutions, which offer easy loans with high interest rates, be immediately stopped.
