Tahdco's micro credit scheme to rescue Koyambedu market vendors from loan sharks
At 8.5% interest and Rs 50,000 subsidy, Tahdco’s initiative protects the small vegetable and fruit vendors from the vicious cycle of ‘metre speed and rocket vatti (interest)
Officials of Tahdo and NSFDC interacting with one of the beneficiaries of the micro credit management plan
CHENNAI: To prevent fruit and vegetable vendors in Koyambedu Wholesale Market from falling into the clutches of loan sharks, the Tamil Nadu Adi Dravidar Housing and Development Corporation (Tahdco) established a micro credit finance society – Jai Bheem Labour and Small Traders Welfare Association.
“The society has been established under the Societies Registration Act to build a community-based sustainable model to protect the small vegetable and fruit vendors from the vicious cycle of the loan sharks ‘metre speed and rocket vatti (interest)’,” said KS Kandasamy, MD-Tahdco.
As per the plan, Tahdco takes a loan from the National Scheduled Castes Finance and Development Corporation (NSFDC) for lesser interest and hands it over to the society, which in turn, would lend it to its registered members. “Apart from the loan amount of Rs 1.25 lakh, we give a subsidy of Rs 50,000 to each vendor. This gives them financial freedom and keeps them away from local lenders, who take a major portion of their earnings by charging high interest,” he pointed out.
At the first phase of the disbursement of loans in March this year, 46 vendors availed loans to the tune of Rs 1.25 lakh. “We charge 8.5% interest. Of this, 2% goes to the society to build a corpus fund for sustainability and risk of repayment, if any default repayment for a month or two,” said V Selvakumar, president of society (welfare association).
The initiative has received a positive response from the vendors as more than 140 have approached the society for loans. Vasanthi, assistant project manager, Tahdco, said: “The interest rate would further come down by 2% in the coming month. This programme helps those who were unable to get bank loans.”
P Kuppusamy, Villupuram, said that he has been selling fruits in Koyambedu market for 20 years, and most of his hard-earned money goes towards paying interest to the local lenders. “We’re relieved that we don’t have to depend on them and pay exorbitant interest. We’re saving at least Rs 1,000/day,” he smiled.