SHGs to get bank loans at 7%: Ramesh

All the self help groups (SHGs) in the country would be able to get credit at 7%, at par with crop loans, Union Minister of State for Environment and Forest Jairam Ramesh said today.

"The Union Government has taken a decision that the SHGs will get bank loans at the same rate at which crop loans are given. The crop loans carry an interest rate of 7%.  There is demand to reduce it further to 5% and I would certainly support that," Ramesh said.

At present, banks extend loans to SHGs under bank linkage programme at 12%. Ramesh was speaking at the fourth international summit on microfinance which began today.

The Minister said though microfinance has become a 'dirty' word, the MFIs are doing good job by bringing the required financial products to the doorsteps. But he also took a dig at them saying they should concentrate more on building social capital rather than trying to get foreign investments and improving balance sheets.

Referring to the Andhra Pradesh Government