Banks in Andhra Pradesh lag far behind their lending targets to self-help groups in 2011-12.
As per the State Level Bankers' Committee data, lending under bank-linkage programme up to March 20, 2012, was only at Rs 8,259 crore as against a target of Rs 10,684 crore.
This assumes importance in the context of almost complete halt of loan disbursals of microfinance institutions after enactment of the Andhra Pradesh Microfinance (Regulation of Money Lending) Act in October 2010.
Banks were close to achieving targets in SHG lending to urban areas. However, the shortfall was much higher in rural areas.
When contacted, a senior official of State Bank of Hyderabad said banks were generally ‘reluctant' to lend to SHGs unless they were prompt in payment. The targets being fixed were also aggressive in the light of increasing concerns over recoveries, he added.
According to Mr B. A. Prabhakar, Chairman and Managing Director, Andhra Bank, and President, SLBC, AP, the Society for Elimination of Rural Poverty and banks need to concentrate on basic aspects of SHG-bank linkage.
“Efforts are to be made to sustain the movement created,” he said at an SLBC meeting here recently.
The interest subvention scheme for SHGs announced in the Union Budget would be of help in future, he added.
Recovery issues continue to trouble banks in agricultural loans too. SLBC attributes this to expectations about a possible loan waiver among the borrowers.
It had also requested the State Government to put in place a mechanism to deal exclusively with banking-related issues and improving the repayment culture.