New Delhi: In a bid to offer financial support to needy households, the government-owned Indian Overseas Bank (IOB) has announced a special COVID-19 lending scheme for Self Help Group (SHG). The scheme tenders unsecured credit of Rs 1 Lakh for each SHG until June 30, 2020.
Under the offer, each member of an SHG can borrow Rs 5000 to tide through financial hassles owning to the pandemic spread in the country. The application for the loan will be sanctioned and disbursed within a week, i.e., six working days. There is no collateral, processing fee, or prepayment fee for this microloan scheme.
The repayment terms are also designed to minimise the debt burden. The borrower gets a six-month moratorium and a total of three years to repay the loan of Rs 5000. The rate of interest levied is 9.4 percent per annum. The borrower repays the loan in 30 EMIs.
All SHGs with a good repayment track record and a relationship history with the bank are eligible for the IOB COVID loan facility. The SHG must be an existing customer of IOB and should have applied for a minimum of two loans in the previous year from the bank.
The eligible customers can apply directly through bank branches or bank representatives. In an official statement, the bank said, “Our efforts are aligned with the Government of India’s advice to help all sectors in the economy to function properly and sustain amidst the crisis at hand. These loans will help the SHGs to pass through the difficult times.” Further, the bank said that the loans are exclusive of the current corpus of the SHG.
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
Director- MyMoneyMantra FinTech| A senior retail and commercial banking professional, adept at handling Business Development, Sales Planning & Growth, Product Strategy, Marketing Operations and Client advisory services phygitally.
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