VIJAYAWADA: Youth and unemployed individuals in the State, who applied for corporation subsidy loans, are facing difficulties accessing the funds due to the lack of a CIBIL or credit score, leading to arbitrary rejection of their applications by bankers despite being shortlisted by mandal-level committees.
This issue is distressing many young people who aim to set up small business units for livelihood.
The State government has resumed subsidy loan schemes through various corporations, allocating thousands of crores for the economic uplift of the unemployed.
Applications were invited for subsidy loans through the Andhra Pradesh Online Beneficiary Management and Monitoring System (APOBMMS) for various corporations, including BC, EBC, Arya Vysya, Kshatriya, Brahmin, and Kapu.
Around six lakh applications were received in the State, with 4.29 lakh applications for BC corporation loans, and 1.62 lakh applications for EBC corporation loans.
This year, the government removed limitation on loan amount for certain schemes, and introduced two categories of loans - Self-employment schemes covering sectors like agriculture, transport, industries, services, and business, as well as generic pharmacies under Micro, Small and Medium Enterprise sector for pharmacy graduates.
Rejection inevitable due to more applications: Officials
To address previous issues, a slab system was implemented for loan units, offering varying subsidy amounts based on the loan size. Unlike the previous single slab with a 50% subsidy up to Rs 2 lakh, the new system offers 50% subsidy up to Rs 1 lakh for unit costs up to Rs 2 lakh; 50% subsidy capped at Rs 1.25 lakh for unit costs between Rs 2 and Rs 30 lakh; and 50% subsidy capped at Rs 2 lakh for unit costs above Rs 3 lakh, with a maximum loan limit of around Rs 10 lakh.
The government released special guidelines for selecting candidates for subsidy loans due to a large number of applications. Each mandal was allocated around 40-60 loans. However, public sector banks, which were the only institutions involved in sanctioning these loans this year (excluding cooperative banks), imposed strict restrictions. Despite mandal committees selecting eligible candidates, bankers rejected applications due to insufficient credit scores or the candidates not having accounts with the respective banks.
In contrast, during 2014-18, such restrictions were not in place, and thousands of youths benefited from similar schemes. Meanwhile, corporation authorities downplayed the issue, stating that rejections are inevitable due to the high volume of applications.