New Delhi, Nov. 25: Much before the Sachar Committee reported that Muslims find it harder to secure bank loans, the government had started the process of revamping credit facilities for minorities.
Through an official order issued about two months ago that remained unpublicised till now, the ministry of minority affairs engaged top credit bankers to suggest ways to improve access to loans.
Naseer Munji, chairman of Development Credit Bank, Shithin Desai of Merrill Lynch, Bikram Limaya of Development Finance Company, S.R. Ayar of the Credit Information Bureau and H.N. Sinor of the Indian Bank Association were roped in.
The experts are being assisted by Sujit Dutta, joint secretary in the ministry, and R.N. Shastri, managing director of the National Minorities Development and Finance Corporation (NMDFC). A report is expected in a month.
“We want to look at procedure and figure out where exactly the problem lies. The entire process, disbursement and repayment… everything would be looked at,” Dutta told The Telegraph.
The idea is to flog NMDFC out of its decade-long slumber and simplify the process of loan disbursement. The corporation was set up in 1994 to facilitate economic activity among minorities. However, in the past 12 years, disbursement has been very low.
Between 1994 and 2004, the total amount distributed was Rs 672.80 crore. The total beneficiaries across the country in 10 years are about 178,738.
The Sachar Committee, set up to study the social, economic and educational status of Muslims, submitted its report to the Prime Minister on November 17 in which it said the community found it tougher than others to access credit for self-employment.
A parliamentary standing committee said NMDFC has not even conducted a survey of potential beneficiaries. The state-wise allocation of funds, especially to Haryana, Maharashtra, Orissa, Mizoram and Uttar Pradesh, has fallen because funds utilisation was low. Also, the corporation is thinking of winding up several schemes because of underutilisation.
In the first two years of the 10th five-year plan, the allocation for NMDFC was Rs 20 crore and Rs 22.40 crore. In 2004-05, this was raised to Rs 73.60 crore. In the current budget, the ministry had demanded Rs 51 crore for equity support. Only Rs 16.47 crore was sanctioned because the finance minister felt the corporation would not be able to absorb the increased allocation.
The minorities ministry is keen to change the situation. “You’ll get to know what we plan to do after the experts submit their report,” Dutta said.