In Akola, novel experiment to tweak Direct Benefit Transfer

The ZP administration and bank representatives discussed the matter. A representative of the Akola District Central Cooperative Bank said they view the request positively and will study how to accommodate bridge financing for prospective DBT beneficiaries. Of the nearly 500 listed DBT-applicable schemes of the Central and state governments, Zilla Parishads run about 32 — such as subsidy for purchase of tractors, harvesters, and sewing machines, etc.

Akola region (in green)

Speaking to The Indian Express, Prasad said, “The government cannot give DBT in advance because of the fear of diversion of funds for other purposes, or non-utilisation of funds within the time period. The aim of seeking loans for beneficiaries of government schemes is to facilitate the uptake of DBT, prevent borrowing from unauthorised sources/moneylenders, and to help beneficiaries give their contribution to avail benefits”.

According to the ZP, no new loan product is to be created, for in the case of the 12 beneficiaries who in June received a credit facility from the Union Bank of India’s Akola city branch in order to construct toilets, the bank extended an available credit facility under the Pradhan Mantri Jan Dhan Yojana accounts to Rs 12,000, paid in tranches. It was low-cost credit facilitation instead of credit from informal sources or MFIs where the rate of interest would be considerably higher.