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Government duty-bound to lend to SHGs, says Minister

Special Correspondent

"Some NGOs are lending at higher rates"

THANJAVUR: : It is the Government's duty to provide loans to self-help groups, Union Minister of State for Finance S.S. Palani Manickam has said.

"By providing them loans, the Government is not giving them any concession but is discharging its duty," he told a meeting got up here to disburse loans to SHGs.

He said banks had promised to provide Rs. two crores for setting up a cancer ward at the Thanjavur Medical College Hospital. Indian Overseas Bank had agreed to lend Rs. one crore, the State Bank of India Rs. 50 lakhs and Indian Bank Rs. 50 lakhs.

Tracing the history of SHGs, Mr. Palani Manickam said it was the late Murasoli Maran, during a visit to Bangladesh, came to know of two SHGs acting as instruments of economic change in rural areas in that country. He then discussed the matter with the then Chief Minister, M. Karunanidhi, in 1989. Two groups were formed in Dharmapuri district. Later, the concept was expanded by the then Union Finance Minister, Manmohan Singh in 1991.

He lauded the banks in Thanjavur district for lending more to SHGs. "I have come to know that the credit-deposit ratio has touched 85 per cent as against 60 per cent fixed by the Reserve Bank of India. Some banks have even lent 200 per cent. This shows the confidence you have in SHGs."

He said non-governmental organisations should act as a link between the Government and the people and they should not exercise more control over the SHGs. These NGOs were being loans by banks at four-five per cent. They in turn were lending to SHGs that had not qualified to get bank loans directly. The NGOs could lend at two per cent more than the interest they paid. "I have come to know that some NGOs were charging more interest," he said.

He also said the Centre would call for a list of NGOs recognised by banks to find out whether any eligible NGO was left out.

Indian Overseas Bank, the lead bank of the district, organised the meeting. Mr. Palani Manickam disbursed Rs. 10.69 crores in loans to 12,625 beneficiaries.

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