New Loan Scheme for Self Help Groups (SHGs) Planned by Karnataka Govt.

New loan scheme for members of self-help groups (SHGs) is planned by the Karnataka govt. to provide loans upto Rs. 10 lakh to encourage entrepreneurial activities, first Rs. 5 lakh are interest fee and remaining Rs. 5 lakh attracts interest rate of 4% p.a

Dated: October 11, 2018 | Updated On: October 13, 2018 | By: Karan Chhabra | |
Karnataka New Loan Scheme Self Help Groups

Karnataka govt. is going to launch a new loan scheme to encourage entrepreneurship among the members of self-help groups (SHGs). This new scheme of the state govt. will provide loans upto Rs. 10 lakhs to SHGs to boost entrepreneurial activities among the members of these SHGs.

This scheme is in accordance with the long pending demand of self-help groups to provide them with zero interest loans to boost their activities.

CM HD Kumaraswamy will also launch Badavara Bandhu scheme to provide one day loans upto Rs. 1000 to street vendors and small traders to free them from menace of meter baddi.

Karnataka New Loan Scheme for Self-Help Groups (SHGs)

The important features and highlights of this new loan scheme for SHGs as planned by the state govt. of Karnataka are as follows:-

  • To promote and encourage entrepreneurship activities in self help group members, govt. will provide loans upto Rs. 10 lakh.
  • Out of this total loan amount of Rs. 10 lakh, govt. will not charge any interest for loans upto Rs. 5 lakh amount.
  • The remaining amount of Rs. 5 lakh would attract an interest rate of 4% per annum.

The state govt. is working on the preparation of policy guidelines for this loan scheme for SHGs. CM has announced that the state govt. will launch this scheme across various districts very soon. Various SHGs were demanding interest free loans to boost their efforts. This proposed scheme is an advancement to encourage entrepreneurial activities among SHG members.

Karnataka Badavara Bandhu Loan Scheme for Street Vendors

Besides the launch of new loan scheme for self-help groups, govt. is also planning to help street vendors and small traders. For this purpose, govt. will launch Badavara Bandhu loan scheme to provide loans upto Rs. 1000 for one day without an interest to the street vendors. There is no requirement for any guarantor and this assistance amount would be interest free. The state govt. is planning to implement this scheme before Diwali festival.

This scheme will free urban poor people including street vendors, small traders and footpath hawkers from being exploited by private money lenders who charges 2% to 10% interest for one day. Now around 53,000 beneficiaries across the state will be given financial assistance for their day to day assistance.

To streamline the operation of PACS (Primary Agricultural Cooperative Societies) through computerisation, govt. plans to bring 5,300 PANS in the state under a common software. The state govt. has also ensured that steps have been taken to waive around Rs. 9,448 crore loans in the cooperative sector under Karnataka Farm Loan Waiver scheme.

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