Dimapur, February 8 (MExN): Micro Financing scheme, the process of taking money loaning facilities to the rural places in the state is the new catch-word of the state government in trying to help out the rural people avail loans to set up small business and projects and assist them in attaining economic self sufficiency.
The new project aims to employ the Village Development Board (VDB) members in different villages in the state to utilize a ‘VDB corpus fund’ of about Rs 2.8 lakhs and disburse it as loan to selected beneficiaries both individual and group against appropriate documentation. The Corpus fund, called ‘The Micro-Finance Corpus Fund’ would be generated by means of a fixed deposit of account Rs 40,000 by selected VDB which will be jointly operated by the VDB Secretary and the Chairman of the village Council. The Directorate of Rural Development would contribute Rs 1 lakh while the bank in which the account is opened would contribute about Rs 1.4 lakh.
“VDBs will be acting like a small bank,” said Additional Director of Rural Development, KG Himb, “In short, VDBs are becoming banks.” KG Himb said that out of fifty two blocks, 21 blocks consisting of 420 villages are not covered by banks, thereby depriving the villagers of bank loans.
He said that since credit is very essential to start business enterprises and since availing bank loans involves a complex procedure, the poor villagers cannot go to the towns and avail the bank loan. Besides, the loans given by unrecognized banking institutions run by private individuals and groups with their 10 percent interest rate are very high, he said.
Micro financing aims to provide loans at an interest rate of 18 percent per annum only. The interest money generated from the loans can be retained by the VDBs for their use as loan money or for other works, GK Himb added.
About the common problem of loan recovery faced by banking institutions, KG Himb optimistically said that since the loans would be disbursed by the local people to local beneficiaries, the loan recovery would be ‘hundred percent’.
The VDB fixed deposit and VDB Welfare fund amount will stand as security of the loan taken by the VDB from the bank. The village authority is also allowed to mortgage the property of the loanee if required.
Almost all the powers and functions of this Micro Finance scheme are vested with the Village Development Board. The VDB will select the beneficiaries, verify the applicant before selection, and publicize the scheme. The Block Development Officer (BDO) will conduct an annual audit reported to the PD, DRDA and the Director of RD.
Nonetheless, in this connection, an orientation training on Micro-financing for the VDB members of different villages in Dimapur was held at the Dimapur Town Hall.
About a hundred VDB members in the district attend the training where they are trained about the working of the scheme. Dimapur district covers 134 VDBs.
