The Punjab Cabinet on Thursday approved waiver of loans, uptoRs.50,000 each, of the loaness of the Punjab Scheduled Castes Land Developmentand Finance Corporation (PSCFC) and Punjab Backward Classes Land Developmentand Finance Corporation (BACKFINCO).
The pro-poor initiative will benefit loanees belonging toScheduled Castes, Handicapped Backward Classes, Economically Weaker Sectionsand Minorities, an official spokesperson said after the cabinet meeting chairedby Chief Minister Captain Amarinder Singh.
During the meeting, Cabinet Minister Charanjit Singh Channiappreciated the decision, and also the recent loan waiver of landless farmersand farm labourers.
The total amount to be waived stands at Rs. 62.46 crore,applicable to loans disbursed up to March 31, 2021, with waiver amount to becalculated on June 30, 2021. This translates into Rs 41.48 crore of PSCFC loansand Rs 20.98 crore of BACKFINCO loans.
A spokesperson of the Chief Minister’s Office said thatunder the scheme, a total of 14853 loanees (10151 of PSCFC and 4702 of theBACKFINCO) will benefit.
The waived off amount would be borne by the StateGovernment and released to both the corporations as Grant-in-Aid.
Notably, the PSCFC advances loans to poor ScheduledCastes and handicapped persons for self-employment at nominal rate of interest,and BACKFINCO advances loans to poor persons belonging to Backward Classes,Minorities and Economically Weaker Sections of the society for self-employmentat nominal rates of interest. The recovery rate of loans advanced by the PSCFCis about 77 percent, while the recovery of BACKFINCO is about 65 percent.
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Despite the best possible efforts, the recovery ratecould not be improved further due to various reasons, such as failure ofbusiness, death of the loanee, chronic illness of the loanee or any otherfamily member, as well as natural calamities. Besides, the spread of Covid-19also affected the incomes of the loanees.