The Hindu 01.12.2010
GVMC to reach out to SHGs
Staff Reporter
VISAKHAPATNAM: The high interest rate at which members of self-help groups borrowed from micro finance institutions (MFIs) resulted in a debt of more than Rs.100 crores in the limits of Greater Visakhapatnam Municipal Corporation limits.
Some 1.46 lakh of the 7.32 lakh members borrowed Rs.200 crores from 10 MFIs and repaid Rs.106.1 crores.
The problem has arisen because the financial needs of self-help group members are, apparently, much more than what the bank linkage is providing, says Municipal Commissioner V.N. Vishnu. The GVMC wants to step in by making loans available to members of SHGs under its total financial inclusion (TFI). The TFI target is Rs.60 crores and each of the SHG federations gets about Rs.1 crore, which would reduce their burden, he says. This has already been done in rural areas of the district. Even Visakhapatnam Co-operative Bank is evincing interest, he adds. Mr. Vishnu told reporters here on Monday that the exercise of holding elections to federations should be completed by December 31 so as to bring them under TFI from January 1.
