HYDERABAD: Muslim households in Telangana have low levels of access to loans from cooperatives and banks in all aspects such as household share, and share in total and average loan amounts. Loans from non-institutional sources, especially from moneylenders, dominated borrowings by the community in the State in terms of all aspects of credit.
As per data, only 25.5 per cent of Muslim households in the State accessed loans from institutional sources, with a share of only 35.6 per cent in total loan amount and average amount of Rs 1,47,400 per household. Credit access from all sources to Muslim households in the State stood at 62 per cent, much lower than that of others. Within institutional sources, there was a very low level of access to cooperative and banks, compared to self help groups (SHGs).
According to the book Muslims in Telangana - A Discourse on Equity, Development and Security, which was released on Thursday, the coverage under subsidised crops and government schemes including Prime Minister Rozgar Yojana (PMRY), Swarna Jayanti Gram Swarozgar Yojana (SGSY), and Swarna Jayanti Shahari Rozgar Yojana (SJSRY) was also meager in the loans taken by Muslims in Telangana, as compared to their Hindu counterparts.
Twenty-five per cent of loan amounts borrowed by Muslim households in Telangana were for non-farm related businesses, 15 per cent for household expenditures, 7 per cent for medical treatment, 5.3 per cent for housing, 4.7 per cent for farming, 1.4 per cent for education, and 42 per cent for other non-stated purposes, which could be socio-cultural like marriage, gift, maternity, family, or community functions, etc. No loans were borrowed by Muslim households for investment purposes.
Other salient points
Smaller proportion of accounts in post offices
Zero Kisan Credit Cards for agricultural credit purposes
Financial assets just half the value of Hindu households influencing credit
Ends up paying high interest rates due to higher dependency on non-institutional sources