Micro-credit now for urban slums

New Delhi, Jun 19 (UNI) Finance Minister P Chidambaram today said the government's efforts would now focus on achieving financial inclusion in urban slums, even as quiet work in this regard continues in rural areas.

"Each Public Sector Bank branch has been asked to adopt 250 households for the purposes of financial inclusion," Mr Chidasmbaram said while launching the 'Microcredit Scheme for Slum Dwellers' in Ekta Vihar, a slum area, in the South Delhi area of the capital, The Finance Minister announced that all loanees who return back their loans in due time will be given a rebate of one per cent on their interest amount.

The loans were distributed by Delhi Chief Minister Sheila Dixit, who appealed to women to go in for loans as they have a better repayment record. "The Centre has come to the doorsteps of the poor to give them loans," she said.

Mr Chidambaram said the task of achieving complete financial inclusion was a mammoth one. However, if each branch takes seriously its job in this regard then the 30,000 to 35,000 branches would be able to make a dent on poverty.

Mr Chidambaram said the 10 per cent interest charged on loans under the micro-credit scheme was not high as the cost of raising funds itself was 5.5 per cent. Add to this the administrative expenses and the cost of delivery, then the interest charged of 10 per cent on micro-finance loans would not amount to much.

Mr Chidambaram asked slum dwellers not to seek loans from money lenders, who charge exhorbitant interests.

"If you still take loan from money lenders, then I have failed", he remarked.

The scheme is a collaborative effort of the Ministry of Finance, nine Public Sector Banks and Asha Community Health and Development Society, an NGO working in the field of helathcare and development in the Delhi slums.

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