The government is restructuring a micro-credit programme to help rural households come out of the extreme poverty conditions they face every day. The loans are supposed to be collateral free with subsidised interest rates and the main proposal is to lend up to Rs 1 lakh per family in the next three to five years.
The process of accessing loans is being simplified and the team is finding the details of livelihood each house can undertake to lend the money accordingly. The government has an effective plan so let us have a look at its objectives and also the further details.
Via Objectives
The main objective of the Easy Credit scheme is to reduce the local money transactions of poor which have no written proof and they also charge interest rates which are against the normal norms followed by the banks.Though the scheme requires 3-5 years to establish its working the final output is quietly effective.
The scheme has an approach to make the entire system better and clean so that the poor do not have any problem in availing basic loans like the other population. The skill ladder is aimed to be moved up. The strategy to double the income of the rural households is also very significant and effective.The government also aims to decrease the burden of the households.
Further Details
The Socio-Economic and Caste Census identified nearly 8.5 crore poor households which will now be linked to the plan by 2019.
The government has set an objective to double the bank linkages by 2019 basically to give 60,000 per year for the creation of livelihood.
This scheme has restructured the entire process of money borrowing by the poor in a better and transparent manner so that they can avail maximum amount without any tiring procedures. Under the new proposal, the interest burden on the borrower is much lower which is a great benefit of the scheme and works in the support of the poor population.
These households are into activities like Tilling and setting up of poultry farms and goat sheds so keeping that into consideration, the rural development ministry has signed a memorandum to enable lending to them for these activities. The memorandum is of understanding with the agriculture and animal husbandry ministry
To make the loans available at 7 percent, the rural development ministry will provide an interest rate financial assistance of 4 per cent as planned by the team. Households in 250 backwards districts will get an additional interest financial assistance(subvention) of 3 per cent on prompt repayment, making their effective interest rate at 4 percent.
This easy credit scheme for the rural households aims to create various livelihood opportunities by providing loans which will help these households use and direct their resources and skills in a potential direction.
The government has, for instance, taken up the initiative to expand and develop daily activities in several states by collaborating with the National Dairy Development Board to provide better market connections and bring producer groups together with companies.
The lending models of different states in the rural areas are being studied by the ministry to expand its credit reach. These models include, for example, Tamil Nadu’s Panchayat Level Federation and Telangana’s Stree Nidhi Cooperative which leads to self-help groups.
Rural credit in India raised by self-help groups grew 40 per cent in 2015-16 to Rs 30,000 crore. These groups have mobilised credit of about Rs 70,000 crore since they were formed in 2011, to fund the creation of social capital in villages that could lift nonfarm jobs.
Conclusion
The Easy Credit Scheme aims the rural households which are a major disadvantage when it comes facilities and developments. The scheme has a direct approach and appeals the rural population with effective points. The government has a suitable plan to turn the skills and potential of these people into some efficient and productive direction. The loans are restricted to specific livelihood activities only. We hope that the scheme is successful in implementing its objectives.