Banks refuse to grant loans

The potters community finds it extremely difficult to convince banks to grant them loans to overcome debts. Potters are eligible for loans under various state and Central government schemes for small-scale and cottage industries. Kanubhai says,“Until 2006,about 15 of us applied under the Kutir Udyog Yojana for the stipulated Rs 1 lakh loan for our businesses as we had suffered losses during the Vadodara floods of 2005. We wanted the money to buy mud. However,banks refused to grant us loans saying that we were people with negative profiles in a negative area.”

The Kumhars say that no government sponsored loans have worked for them as nationalised banks have rejected their applications. Narmadaben Prajapati says,“We had applied for loans until 2006. But bank agents only made false promises and took bribes. The papers always came back rejected. Finally,we realised that we were not going to get loans because of the area we live in.”

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The community says that Fatehpura,which was severely affected during the 2002 Gujarat riots,has resulted in banks being cautious about disbursing loans. An official of the commercial loans department of a leading nationalised bank said,“Banks do check the feasibility of government schemes where loans are involved. Often,the government creates schemes without actually checking if the businesses for which loans are recommended are viable or not. We do the check at our level and if we feel that the businesses are too uncertain in nature,we do not disburse the loans.”