The government plans to roll out a new program that will allow rural households to obtain small loans at subsidized interest without any deposit. This decision, a new micro-credit program from the central government, aims to help rural households out of poverty.
Under this scheme, the government will provide easy loans of up to Rs 1 lakh to such households over the next three to five years. The loans will be granted at subsidized interest rates of 4 to 7%, without any security deposit, according to a report by the Economic Times.
“We have simplified the process of accessing loans… We are going into the details of the livelihoods each house can undertake so that money can be loaned accordingly,” the Rural Development Secretary told the daily. Amarjeet Sinha.
According to one estimate, nearly 8.5 million poor households were identified in the socio-economic caste census. Caste census will also be linked to the plan by 2019, he said.
In addition, the government aims to double banking ties to lend Rs 60,000 crore per year for livelihood creation for poor rural households by 2019.
With this, the government wants to reduce their dependence on local lenders and microfinance companies that charge high interest rates.
Earlier this month, a survey by market regulator SEBI found that less than 1% of rural households in the country were investing in stock markets, indicating a complete lack of public awareness of this mode of investing.
The Ministry of Rural Development has already signed a memorandum of understanding with the Ministry of Agriculture and Livestock to move the program forward, he added.
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