Interest rates for SHGs be reduced to 4%: CPI-M

The government must bring down interest rate on loans for self help groups (SHGs) from 11-12 per cent now to a uniform 4 per cent, CPI-M today demanded in the Rajya Sabha. Initiating a discussion on the achievements and problems of women SHGs, Brinda Karat (CPI-M) said the current interest rate is very high and the government must subsidise it by making it a uniform four per cent.

She opposed the microfinance bill saying it will be disastrous for the country and SHGs will be the most affected. Karat alleged that SHGs formed by Muslim women are being discriminated against in delivery of loans. She asked the government to appoint a nodal agency or ministry to cover all issues in the functioning of SHGs.

Shantaram Naik (Cong) told the House that a part of government function would be carried out by the SHGs in future as these groups have brought a mini revolution in the country. He demanded a law to prevent entry of anti-social elements in the SHGs so that bank's money is also protected.

Pointing out that the rate of recovery of loans by banks is 90 per cent in case of SHGs, Najma Heptulla (BJP) said other sectors default. She noted that SHGs would not be helpful to bring the poor above poverty line unless price rise is checked.

Kanimozhi (DMK) lauded the role of SHGs and said they are instrumental in raising the confidence level of women, who have become actively involved in community development.