Dreams unfulfilled as banks delay loans under NULM scheme

She has a dream, the Centre got a scheme, but bank lacks the steam to sanction the money.

Sumitra Devi, an anganwadi worker, dreams of opening a small general store to feed her family. But her loan application gets ping-ponged between her bank and the Jaipur Municipal Corporation that vetted and forwarded her name for a loan under the Deen Dayal Antyodaya Yojana of the National Urban Livelihoods Mission scheme.

She is among the 1000 low-income people who are waiting for public sector banks to open the purse. The Centre’s scheme allows individuals below the poverty line and Antodaya card holders to avail of loan at 7% interest. The difference between the bank rate and the prescribed rate of 7% will be borne by the corporation.

“My application is complete and I have also submitted all the requisite documents. But every time I visit the bank, they tell me to come later by giving lame excuses such as the manager is on leave or to complete some more formalities from the JMC,” said Devi.

An official at the corporation said they had sent a list of around 1,000 candidates to the banks in March after doing background checks and interviewing the candidates, .

“Each of the branches of these banks has been given a specific target of people whom they have to provide loan. Since we have cleared the applications of these candidates, this delay on part of the banks is unfortunate,” said Ramesh Chandra Agrawal, the deputy commissioner of the corporation.

A large number of women have applied for the loan who want to use the money to open general stores or tailoring shops. The maximum loan amount is Rs 2 lakh for individuals and Rs 10 lakh for groups. The interest rate for groups is 4%.

Some of the candidates say that the banks are raising questions on their repayment capacity even when their applications have been recommended by the corporation.

“I have been an account holder at the Sanganer branch of SBBJ ( State Bank of Bikaner and Jaipur) for the last 15 years. Yet, officials of the same branch are not willing to sanction my loan,” said a candidate on condition of anonymity because she fears banks might delay her application further.

The corporation said so far banks have sanctioned only 41 loans. Agrawal, who oversees the project in the corporation, said the civic body had received an overwhelming number of applications.

“We have an arrangement where the banks can directly pay for the expenses candidates incur in setting up their business. This has been done so that they don’t spend the money on other things,” Agrawal told HT.

District manager of UCO Bank, a lead bank, said: “We had received the applications, many of which pertained to the previous year, at the end of March. One of the causes of the delay is late submission by the corporation”.

“There are many applicants who are not based in Jaipur and we are conducting thorough checks to determine their repayment abilities.”

He admitted there are complaints by genuine candidates who haven’t been sanctioned loan because of laxity of bank officials.

“We have heard such complaints of delay by bank officials. Such applicants should lodge complaints and we will take action,” said Regar. Banks were trying to clear pending applications by July, he said.

Agrawal said he will request the district collector to direct the bank officials to accelerate the process.