Financial services to all a must: Chidambaram

June 19th, 2008 - 9:11 pm ICT by IANS  

A file-photo of P. Chidambaram

New Delhi, June 19 (IANS) Finance Minister P. Chidambaram Thursday said financial services must reach all sections of society, particularly those living in villages and urban slums. “Every branch must enrol new 250 households every year in rural and semi-urban areas and take banking services to them,” Chidambaram said here.

The minister said the poor were still excluded from the banking services, and must be brought under the ambit of financial services. He was speaking after launching the micro-credit scheme for Ekta Vihar slum residents in southwest Delhi.

The scheme, an initiative of the state-run banks, finance ministry and Asha, a Delhi-based NGO, aims at economic empowerment of slum dwellers through financial aid.

Under the scheme, the nationalised banks will make loans available at the interest rate of 10 percent to the residents of Ekta Vihar for various purposes like repairing houses, education and business activities.

Chidambaram, who also gave away inaugural loan cheques to around 30 beneficiaries, said that they would get a discount of one percent if they made the repayment on time.

“As per our estimate, in Delhi alone there are 400,000 people financially excluded. They do not have bank accounts. They do not have access to banking services.”

“In India, roughly half of the people are financially excluded,” he said.

He added that the micro-credit scheme would be extended to other parts of the country over a period of time if it succeeded in Delhi.

Later, talking to the reporters, Chidambaram said the interest rate of 10 percent was not high at all, and the prospective beneficiaries had no problem in paying it.

“Ten percent is not high at all, and the people are happy to get loan at this rate,” he said.

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