Explained: What is the loan scheme for inmates in Maharashtra’s prisons?

So, what is this initiative, and who is eligible? How will inmates repay the loans? The Indian Express explains:

What is Maharashtra’s loan scheme for prisoners, and who is eligible?

The credit scheme, called Jivhala meaning ‘affection’ in Marathi, has been launched primarily for convicted inmates who are undergoing a prison sentence of more than three years. Officials said majority of the inmates are sole breadwinners, and their incarceration has left their families without a source of income. Therefore, whie the loan will be disbursed in the name of the inmate, it will be issued to designated family members.

In the initial phase, a loan of Rs 50,000 will be given at a 7 per cent interest rate. Of the interest the bank earns, one per cent will be given back to the system as a contribution to the Prisoners’ Welfare Fund. The loan will be provided without any requirement of mortgage or guarantor.

Inmates will be able to use the loans for education of their children, medical treatment of family members, legal fees, or any other expenses. Bank officials said they found that over 75 per cent of the applications were for agricultural purposes.

How will the inmates repay the loans?

On entering the prison system, an inmate is categorised as skilled, semi-skilled or un-skilled and assigned work in various industrial and manufacturing units inside the prison. For this work, they are paid anywhere between Rs 50 to 70 as daily wages.

The money, deposited in their accounts, can be used to buy essentials from the jail canteen and/or can be sent home. The inmates get their earnings from the jail upon their release.

Bank officials said once an inmate takes a loan, the Equated Monthly Installment calculated will be directly deducted from their prison accounts.

The launch of the Jivhala scheme, and the road ahead

On Maharashtra Day on May 1, state Home Minister Dilip Walse Patil launched the Jivhala scheme at Yerawada Central Prison. He handed over a representational cheque to one inmate during the function.

दीर्घ मुदतीची शिक्षा भोगत असलेल्या कैद्यांच्या कुटुंबाचा उदरनिर्वाह, आरोग्य, मुलांचे शिक्षण आणि शिक्षेच्या कालावधीनंतर कैद्यांचे पुनर्वसन सोपे व्हावे, या उद्देशाने सामाजिक बँकिंगचे हे ऐतिहासिक पाऊल राज्य शासनाने उचलले असल्याचे गृहमंत्र्यांनी यावेळी सांगितले. pic.twitter.com/bWXy7bRriW

— HMO Maharashtra (@maharashtra_hmo) May 1, 2022

Officials from the Maharashtra State Cooperative Bank had, earlier this year, presented the idea for the scheme to the Prison Department and Home Ministry. After holding consultations and taking inputs from civil society representatives, the scheme received approval at the end of March.

In the pilot phase, loan applications of 222 male and eight female inmates from Yerawada Central Prison are being processed by bank officials. Based on the response to the pilot and creditworthiness of the inmates, a decision will be taken to increase the loan amount.

The scheme will soon be expanded to other prisons in the state, including central prisons, open prisons and district prisons.

Officials said other than being a crucial financial aid to inmates’ families, the credit scheme will also help preserve delicate relations between inmates and their family members, and also be used to build a foundation for their life after their sentence is served.

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