Second one, reported by 46 percent of the beneficiaries was that they required working PROBLEMS IN TEE IMP-ATION 7.1 PROBLEMS OF TEE BENEFICIARIES VII

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1 -'PER VII PROBLEMS IN TEE IMP-ATION OF SEPUP AS the programme (SEPUP) assumes greater importance from the point of eradication of urban Poverty, the identification of the problems that are experienced in the implementation of the programme and suggestions for solving these problems would go a long way not only for successful implementation of the programme but also for making a definitdent in the urban poverty which has been neglected in the past. Hence an attempt has been made in this chapter to elicit the opinion of the beneficiaries as well the bankers on the programme and locate the problems that post as stumbling blocks in the smooth implementation of the Programme. 7.1 PROBLEMS OF TEE BENEFICIARIES The first problem, experienced by 72 percent of the beneficiaries, was that the amount of loan Sanctioned was not sufficient. This was also noticed in the bank records that the amount of loan applied by the beneficiary was different from the one sanctioned subsequently. Second one, reported by 46 percent of the beneficiaries was that they required working

2 finance for further expansion of their activities for which there was no provision under the programme. Thirdly, 31 percent or the beneficiaries have pointed out that the sanction of loan was delayed. Fourth problem identified was that there was a lack of demand for the products produced by the beneficiaries. To put it in other way, there is no assured marketing services/government marketing agencies to give guarantee of purchase of the products of the units run by the urban poor. Last one, experienced by the borrowers was the non-realisation of returns from this sales due to the habit of selling the products on credit basis. About 50 percent of the units suffered due to the practice of Credit Sales. Hence, many of the beneficiaries could not get back the sale proceeds from their customers and this affects their business and ultimately the repayment of monthly dues to the Banks was choked. In a few cases, due to credit sales, closure of business was reported, particularly in the case of "Cutpiece Clothes Sales unlt". When the first problem, viz. the inadequacy of loan amount sanctioned was taken up with the bankers, it was pointed out that by and large the beneficiaries who

3 are mostly illiterate, used to apply maximum amount of loan eligible under the programms/scheme that maximum subsidy amount could be availed. Further, the amount 3f fund for a particular unit/activity, quoted by the borrower would not match with the actual requirement for starting the unit. Hence there is a difference between the loan amount applied and loan amount Sanctioned. Since the unit cost for every activities/schemes is being fixed by the Zonal Bankers Committee which implements the programme, as referred to In Chapter IV and the same is followed by the Bankers, this problem does not assume much importance. In regard to the Working Capital finance, it is genuine requirement. Once units start runnlng successfully, there arises the necessity for expansion. Depending on the viability of the unit, the bankers may consider sanction of working capital finance. On the question of delay in getting loan from the bank, the bankers opined that there was a considerable delay while the beneficiaries submitted the required documents like ration card, quotation/invoice, etc., for considering the loan proposal. Due to this reason. time-lag was experienced while the loan was disbursed. Lack of organised marketing facilities combined with credit sales practice, aggravates the problem

4 particularly in the informal sector. As we have seen in Chapter I1 that the informal sector, where the activities of urban poor are easily identified, is highly unorganised. Unless marketing of their products are ensured by Government agencies, this problem would remain unsolved. This situation would ultimately this would also affect the repayment of Bank. This situation would not create a conducive atmosphere for the successful implementation of SEPUP PROBLEMS OF TEE BANKERS Following are the problems felt by the bankers in general and also by the bankers who act as convenors of Zonal Committee, of Bankers. The latter's problems are worth debating since the SEPUP is being implemented by them Problem of participating branches For identification of the beneficiaries under SEPUP, the ration card becomes the vital document and based on the household income of the beneficiary reported in the ration card, the eligible borrowers (Rs.600 and less per month) are identified. But it is the opinion of the bankers that the income reported in the ration cards is not in many cases genuine. When

5 they interviewed the beneficiaries, they have found different income level which don not tally with the one reported in the card. Since it is recorded in Ration Card, it is to be taken in to account as per the guidelines. This facilitated ineligible persons to avail loans under SEPUP, there by defeating the purpose of the Programme. Another problem, felt by the bankers, was that the name of the borrower/beneficiary was not found in the new ratlon card (which has been distributed subsequently by the government authority in the place of old cards). Further there is an understanding between the bankers and Government of Tamil Nadu through the forum. State Level Bankers' Committee the Civil Supply Department would endorse the particulars of Bank was (SEPUP) in the new ration card whenever the card is distributed to the people. But in many of the new ration cards this was reported that the particulars of Current Bank loan were not furnished. This again helped the beneficiaries to avail second loan on production of new ration card in which, details of earlier loan availed were not provided. This situation is responsible for duplication of finance in some cases and old loans were locked up without repayment.

6 It was reported by the bankers that in a few cases, particularly in North Madras Zone, the particulars on the Bank loail. given in the ratlon cards, have been erased using acid by the miscrednts, so that they could avail loan for second time. In some cases, addresses, given in the documents, were latter found incorrect. In some other cases, as reported by the bankers, the beneficiaries changed their addresses without informing the Bankezs. Due to this problem, follow up action became difficult to the bankers. Change of activlty after availing the loan by the beneficiaries also posed problem to the bankers. An unanimous opinion, expressed by the sample branch managers was that they are compelled to reach a target within a short period. in certain Zones, the target set under SC/ST category could not be achieved due to lack of demand in the area or non-availability of eligible beneficiaries. Yet another problem, faced by the bank officials, was lack of adequate Stay w*. after the sanction of loans. in certain pockets North Zone, it was pointed out that urban poor prefer to 90 for wage employment as they get more income in this than in Self employment ventures under SEPUP.

7 7.2.2 Problema of the Convenor of the Bankers Committee When the convenor Bank, which is responsible for convening Zonal Bankers Cornmlttee under SEPUP. (for functions of the committee See Chapter IVI was contacted the following problems have highlighted. First, it was reported that the fellow bankers who are participating in the programme, the Bankers meetings regularly. do not attend Second their participation is not effective and coordination is not up to the expected level. Finally, poor feed-back on the schemewlse performance under SEPUP and absence of timely reporting, handicap the convenor monitoring the progress of programme effectively. The problems, experienced by the bankers, are found genuine, since the researcher has come across these problems during his field investigation. In regard to identification, the reported income level, in the ration card, appears to be incorrect. Since the ration card assumes a lot of importance under SEPUP, the authority/dept. concerned may take suitable measures for mitigating the problems, in this regard.

8 Change of activity and the address of the beneificiary are not uncommon in the informal sector and this is mainly due to their frequent mobility from Zone to zone within city and sometime from City to rural areas (native places). This situation is due to the instability and temporary nature of the activities undertaken by the urban poor. CONCLUSION Looking from the above problems, if adequate manpower and time are permitted to the bankers, they may be able to implement the Programme effectively. Government may provide marketing arrangements for the beneficiaries under SEPUP. Regarding the bankers' committees problem, the respective controlling officers of the banks should instruct their participating branches to effectively participate in the zonal bankers meeting and coordinate with the convenors for successful implementation of the programme. Incentives may be considered to the bankers to involve actively in the development oriented antipoverty programme like SEPUP.