40K loan applications of weavers & artisans denied: Amit Mitra writes to FM

Kolkata: Chief Advisor to Chief Minister Mamata Banerjee and Finance department Amit Mitra on Monday in his letter to Union Finance minister Nirmala Sitharaman pointed out that loans to 40,000 highly skilled and innovative weavers and artisans of Bengal were denied by the banks and sought her intervention.

Interestingly, the letter came to the forefront on a day when the first global partnership for financial inclusion meeting of the G-20 India presidency was inaugurated in Kolkata. The G-20 has prioritised the “financial inclusion” of SMEs and micro enterprises in their global action plan.

He urged Sitharaman to “persuade both RBI and MSME Department of Government of India to rectify the notifications and allow self-certification by micro weavers and artisans for bank loan applications, as was the case in the initial notification”.

“In a recent meeting of the State-level Bankers’ Committee, which I mentor, it became evident that the cause of such huge rejections by the banks was the stringent notification by the Government of India which made mandatory a variety of requirements, including PAN cards, etc. for even these micro weavers and artisans. Unfortunately, RBI too has brought out a similar stringent notification,” wrote Mitra complaining that the bankers are unable to lend to micro-enterprises due to such notifications.

Mitra further pointed out that applications have been rejected despite being vetted by the district industries centres and being holders of the Weavers and Artisans Credit Cards.

From April to September 2022, out of 15,298 weavers who applied for loans, 10,108 were rejected, which entails a 66 per cent rejection rate from April to September. Similarly, loan applications of 29,656 out of 48,153 artisans were rejected during the same period, amounting to a 62 per cent rejection.

In his letter, Mitra mentions that the issue has already been raised by state Chief Secretary H K Dwivedi before Prime Minister Narendra Modi in Delhi. He regretted that while the Centre is encouraging creative industries, the hopes of such artisans and weavers are being shattered due to loan rejections.

He apprehended that the total rejection of bank loans would be five to 10 lakh in India if the figure for West Bengal is 40,000.

After the State Level Bankers’ Committee meeting on December 23, Mitra had said the state government will urge the Centre to change the criteria for availing loans for artisans and weavers.

“Many artisans and weavers are very poor and do not possess PAN cards and their loan applications are being rejected. We will take this up with the Centre and also write to the RBI. We will request the Centre to change its criteria. The Centre is unaware of the grassroots-level problems as a result of which poor weavers and artisans are suffering,” Mitra had then said.