Interest-free loans to SHG women: CM

HYDERABAD: Chief minister N Kiran Kumar Reddy announced yet another sop for members of women self-help groups (SHGs) in the state.“SHG members availing of loan up to Rs 5 lakh would get full interest waiver if they repaid it in time.The scheme will start from January 1,” he announced at the Rachabanda programme at Shadnagar in Mahaboobnagar district on Friday.However, it is applicable only to those women who promptly repay the bank loans within the stipulated time frame, he said.Women SHG members were being given loans at 3 per cent interest at present as the state was paying the balance interest component to banks.Last year, it had to foot an interest bill of `875 crore on the SHG loan scheme.The government recently set up a nonbanking organisation, Sthri Nidhi, with a corpus of Rs 500 cr to extend loans directly to SHG members.The government had extended loans to the tune of Rs 10,000 crore to SHGs in the state this fiscal, under pavala vaddi, against the Rs 22,000 crore loans given to SHGs in the country.Of the Rs 10,000 crore disbursed to women, Rs 9,000 crore was distributed in rural areas and the remaining in urban areas.“As the state government has decided to extend interestfree loans to SHGs, it will have to reimburse nearly Rs 1,400 crore interest to the banks assuming that all loans repaid on time,” he said.The chief minister said that the state government would constitute a committee to study the spiraling prices of essentials.After studying the issue, the committee will submit a report to the government and based on it, necessary action will be initiated to check the prices, he said.