The Centre and RBI have made it clear that financial inclusion, especially of the most needy, is a major component of the current financial policy. However, the scrutiny of several complaints received at the Financial Literacy Centre (FLC) at civil station, Kakkanad, reveals that financial inclusion in the ‘real sense’ remains on paper. The FLC was started in the collectorate on 2 September to create awareness among the public about financial rights like access to credit and financial fraud.
“Most of the complaints we receive are grievances related to the denial of education and agriculture loans and requests for interest waiver”, said Geogy D Madappat, coordinator, FLC. It is said that most of the complaints are filed by nursing, hotel management and engineering students. “Some complaints arise due to technical reasons. Different banks follow different criteria in allotting educational loans to students who get admission through management quota. Due to the lack of a uniform policy, certain banks deny loans to some students pursuing certain courses. Some other banks are ready to sanction loans for the same courses. This creates confusion among students and their parents”, Madappat said.
It is believed that most banks are extremely reluctant to offer loans to students pursuing certain courses which are perceived as financially less viable. Among these courses, Bsc Nursing, Hotel Management and certain branches of Engineering are perceived as problematic. “A large number of Students still opt for Bsc nursing. But majority of the earlier loans availed by nursing students are in the defaulters’ list. For BSc Nursing, generally, the amount sanctioned is `4 lakhs. By the end of the course, the total amount, including interest, will be around `7 lakhs. The lack of openings abroad and very-low wages in the domestic market make it very difficult for students to repay loans”, a highly placed source associated with a bank pointed out.
It has also been pointed out that a large number of small farmers find themselves outside the ‘financial inclusion project’. Highly volatile prices, consistent crop failures and related factors make it extremely tough for many small farmers to repay loan in the stipulated time frame.