September 20, 2020

Waive SHG Loans during Pandemic

SIX national women's organisations wrote to the minister of rural development, Narendra Singh Tomar demanding immediate withdrawal of the government’s decision to collect the outstanding loans from the Self Help Group (SHG) women.

According to reports, the outstanding bank loans to about 54.57 lakh SHGs across the country, amounted to about Rs 91,130 crore at the end of March, of which Rs 2,168 crore or only 2.37 oer cent were NPAs. The government should have in fact waived the loans taken before the pandemic and provided new collateral and interest free loans to the SHG women, they said.

The All India Democratic Women’s Association (AIDWA), All India Progressive Women’s Association (AIPWA), National Federation of Indian Women (NFIW), Pragatisheel Mahila Sanghatan (PMS), All India Mahila Sanskrithik Sanghatan (AIMSS), All India Agragami Mahila Samithi (AIAMS), in a joint letter to the minister, said that the government did not take any steps to provide livelihood opportunities during the pandemic and lockdown. SHG women are barely surviving and managing to keep the home fires burning, they said.

The women’s organisations condemned the government for giving various concessions to the corporate sector, which include writing off some amounts of their huge Non Performing Assets (NPAs), while the rural ministry has chosen to target the poor, marginalised sections of SHG women for recovery.

The ministry of rural development has decided to collect the ‘NPAs’ of the SHGs which were issued under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (NRLM). Under the mission, the government provided support to SHGs, including bank linkages. This is now being reviewed without taking into account the unprecedented economic devastation faced by the SHG women in the country.

The NRLM had planned to cover seven crore rural poor households in the country through SHGs and support them for forming livelihood collectives, enabling them to increase household incomes.  The women’s organisations commented that it is ironic that now the State Rural Livelihood Missions (SRLMs) have been told to “work out the amount to be deposited with banks before September 20 to avoid the account becoming irregular/NPA”. The ministry has asked SRLMs to monitor the status of NPA district-wise and take corrective measures to recover overdue/outstanding dues, they said.

The women’s organisations warned that the decision will lead to tremendous harassment of the SHG women not only by the banks but also the micro finance institutions. They urged the ministry to withdraw the decision and apply a moratorium on the payment of loans and interest till the situation normalises.