Kerala Muttathe Mulla Loan Scheme

It is unforeseeable to know when one would fall into a crisis and need immediate funds to solve the situation. It is common to see the ordinary man struggle to arrange huge amounts of money within a limited period of time. This is when the assistance from private loan sharks come lurking around the corner. The exploitation of borrowers through high-interest rates has been on a steady rise in Kerala. Therefore, the Government of Kerala has officially declared the Kerala Muttathe Mulla Loan Scheme in 2018 to put an end to this situation for once and for all. Under this project, applicants, especially women, would be able to receive easy micro-credits from any cooperative bank. This article talks about this Scheme and its various essentials.

The Scheme

The Kerala Co-operation Minister Kadakampally Surendran performed the State-level inauguration of the Kerala Muttathe Mulla Loan Scheme. The Scheme involves the disbursement of loans at low and affordable rates of interests to several rural households. This Project has been formulated to liberate women from the blade mafia and also micro-finance companies; where the latter's interest rates may be anything between 24% and 30%. It seeks to disburse loans at much lesser rates of interest and where the women have the facility to repay it on a weekly basis. This Scheme has been implemented along with the support of Kudumbashree. Therefore the Muttathe Mulla Programme of Department of co-operation would help the Kudumbashree women raise themselves while raising their fellow citizens, putting an end to the exploitation of the local blade mafia and private microfinance companies.

Objectives of the Scheme

The following are the primary objectives of the Kerala Muttathe Mulla Loan Scheme.

To offer small loans to the people of Kerala at the cost of meagre interest rates.
To assist people and help them to avoid availing loans from private financiers who charge exorbitantly high-interest rates.
To strengthen co-operative banks throughout the State of Kerala.

Highlights of the Scheme

The following are the main features of the Kerala Muttathe Mulla Loan Scheme.

Assistance for the people in need: Most people prefer taking loans or credits when they are in the utmost need of finances. This is what the blade mafia, private and unregistered loan sharks may use to their advantage and loan credits along with high-interest rates.
Easy and simple access to credits: The implementation of the Kerala Muttathe Mulla Loan Scheme would provide the ordinary man with an alternative to attain credits. Co-operative banks that support the Scheme would offer easy and simple loans along with low and affordable interest rates to the needy individuals within a short span of time.
Current interest rates: The main aim of the Kerala Muttathe Mulla Loan Scheme is to offer financial assistance to the poor and the needy. It particularly aims to provide credits without the heavy burden of interest. Typically, private and unregistered loan sharks offer credits at the stake of carrying as must as 35% to 72% interest from their borrowers.
Interest rates under a new scheme: Every co-operative bank would offer financial assistance in the form of loans directly to the groups linked to Kudumbashree. These groups would only be required to pay an amount of 7% as interest on the loans that they avail. However, the groups would have to take an amount of 12% as interest from an individual borrower under the same conditions.
Assistance of Kudumbashree groups: Kudumbashree or the women neighbourhood networks would join hands with various co-operative banks in order to distribute the information and the funds among the poor and needy.

Specifications

Under the Kerala Muttathe Mulla Loan Scheme, each woman, would be disbursed a loan amount that may vary between INR 1,000 and INR 25,000. The loan amounts would also be given to close the older loans that were availed from blade companies. However, they could be settled on a one-time basis. The interest rates for the members of the neighbourhood network or the Kudumbashree would be 12% of the loan amount. Of the 12% interest to be levied, 9% will go to the primary cooperative societies, and 3% to the Kudumbashree women. On the other hand, co-operative banks would be offering loans at an interest rate of 7%. These rates would work against private money lenders who charge a hefty interest rate of 37% to 72% interest for micro-finance loans. The Scheme would be implemented in multiple phases with the first phase starting in the District of Palakkad. The Scheme also offers loans amounts which may be repaid in 10 weeks. The Scheme is being implemented in every ward through the first 3 units of the Kudumbashree. These Kudumbashree units have been selected based on its efficiency in its working as well as its credibility. The members of the Kudumbashree will go to the premises of its members who require these loans and disburse it to them after review. They would visit these houses on a weekly basis and collect the amount for loan repayment. On the basis of the demand for loans, the primary co-operative societies would disburse loans amounting to INR 10 Lakhs to the Kudumbashree units at a 9% rate of interest.

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Frequently Asked Questions

Common questions about Kerala Muttathe Mulla Loan Scheme: Affordable Rural Finance.

The Kerala Muttathe Mulla Loan Scheme is a government initiative launched in 2018 to provide easy micro-credits to rural households, especially women, through cooperative banks at low-interest rates. It aims to liberate women from the exploitation of private money lenders and microfinance companies that charge exorbitant interest rates.

The primary beneficiaries of the Kerala Muttathe Mulla Loan Scheme are women, particularly those associated with Kudumbashree (neighborhood self-help groups). However, the Scheme is designed to provide financial assistance to all needy individuals and households in rural areas of Kerala.

Under the Kerala Muttathe Mulla Loan Scheme, each woman can avail a loan amount ranging from Rs. 1,000 to Rs. 25,000. The loans can also be used to settle older loans taken from private money lenders on a one-time basis.

The interest rate charged to Kudumbashree members is 12%, out of which 9% goes to the primary cooperative societies, and 3% to the Kudumbashree women themselves. Cooperative banks offer loans at an interest rate of 7% under this Scheme.

The Kerala Muttathe Mulla Loan Scheme offers loans at much lower interest rates (7%-12%) compared to private money lenders and microfinance companies, which often charge exorbitant rates ranging from 24% to 72%. This helps protect borrowers from exploitation and financial distress.

Kudumbashree units have been selected based on their efficiency and credibility. These units visit the premises of members requiring loans, disburse the loans after review, and collect weekly repayments. Cooperative societies provide loans to Kudumbashree units, which then distribute them to individual borrowers.

Cooperative banks throughout Kerala play a crucial role in the successful implementation of the Kerala Muttathe Mulla Loan Scheme. They disburse loans to the Kudumbashree units at a 9% interest rate, which are then forwarded to individual borrowers.

Yes, the Scheme offers loans that can be repaid in 10 weeks. This flexible repayment period makes it easier for borrowers to manage their finances and avoid defaulting on loan payments.

The Kerala Muttathe Mulla Loan Scheme was initially implemented in the Palakkad district during the first phase. However, the Scheme is gradually being rolled out in other districts and wards across Kerala through the Kudumbashree units.

By involving cooperative banks in the disbursement and management of loans under the Kerala Muttathe Mulla Loan Scheme, the government aims to strengthen the cooperative banking sector throughout the state. This increased involvement and financial activity are expected to bolster the operations and outreach of cooperative banks.