A recent press report said that the proposed ‘Microfinance Bank’ is to be set up in Andhra Pradesh. The microfinance bank is expected to charge a little more than 3 per cent interest on micro loan to be extended to women of self-help groups (SGHs).
Andhra Pradesh Chief Minister, Mr. N. Kiran Kumar Reddy, said that the bank would be set up with equity of Rs 150 crore from the Government of India. He said that it is understood that private finance from MFI is required but the interest rate should be lesser because the poor should not suffer from high interest rates,
Mr. Reddy Subrahmanyam, Principal Secretary, Rural Development, said the proposed bank would be a non-banking finance company to cater to the emergency financial needs of SHGs. He said that the according to the feasibility study specially made by Andhra Bank and the Andhra Pradesh Government showed that the creation of NBFC is possible and practical. He also said that it would be launched at the earliest.
According to Mr. T. Vijaya Kumar, Director, National Rural Livelihood Mission, Government of India, community-based livelihood promotion models should ensure complete development of communities besides financial growth.