Government is planning easy loans for rural households

The government is considering the launch of micro-credit programme which would provide easy loans to rural households, helping them out of poverty.

Also read: Unemployed rural-poor to get desi version of ‘Startup India, Standup India’, fulfil entrepreneurial dreams

As per the plan, the government would lend up to Rs 1 lakh per family in the coming three to five years, and the loans would be provided at subsidised interest rates of 4 to 7%, without any security deposit.

"We have simplified the process for accessing loans... We are getting into the details of livelihood each house can undertake so that the money can be lent accordingly," rural development secretary Amarjeet Sinha told ET.

Also read: Government to use scientific methods to implement social welfare schemes and fight poverty

By 2019, an amount of Rs 60,000 crore per year would be linked to nearly 8.5 crore households that were identified poor in the Socio Economic and Caste Census. By doing this, the government wishes to lessen their reliance on local moneylenders and microfinance companies, since these lenders charge high interest rates as compared to the rate of 11% charged by banks.

A memorandum of understanding has been signed between the rural development ministry and the agriculture and animal husbandry ministry, which would ease the loan process to such households for activities including tilling and setting up of poultry farms and goat sheds.

Also read: 100 youngsters to turn ‘barefoot engineers’ soon to better farm productivity