Union Finance Minister Nirmala Sitharaman has lauded self-help group movements led by religious and spiritual leaders and advised banks to give up any hesitation in giving loans to such groups backed by credible leadership.
When you have social, religious and spiritual leaders leading the (self-help group) movement, banks find easy to find credible clients, she said.
Advising banks to recognise the social, religious and spiritual leadership, which can give them institutional strength they were looking for, she asked them to give up hesitation in giving loans to such groups backed by credible leadership.
When the government comes up with loans like Mudra where initial hesitation among institutions will be, O My God! Government wants to give loans without security! Banks are finished! she said.
She was speaking at an event organised by the Shri Kshethra Dharmasthala Rural Development Project (SKDRDP) in Bengaluru.
Sitharaman was all praise for the SKDRDP led by Dharmadhikari of Dharmasthala Dr D Veerendra Heggade, which has raised 4.75 lakh SHGs in Karnataka involving 42 lakh families.
Good institutions, good banks, NABARD and SIDBI together with Dharmadhikaris can do miracles for our society, she said.
The finance minister said the government launched the Mudra loan to encourage entrepreneurship and majority of its beneficiaries were women, who get loan without any security.
“No, banks are not finished. Banks can come before you and say, it's successful. People are returning the money. Poverty alleviation is being credibly addressed. So it works,” Sitharaman said.
She recalled the budget tabled by her in July in which the government announced loans up to Rs one lakh for women under the Mudra scheme.