Despite the launch of the Chief Minister’s Micro Finance Initiative (CMMFI) amidst much fanfare by Union Minister of Finance & Corporate Affairs Nirmala Sitharaman in August 2023, the scheme seems to have encountered significant challenges in implementation, including delays in fund disbursement.
Aimed at providing affordable credit for economic activities, the scheme was designed to boost Nagaland’s economy by enhancing investment in agriculture and allied sectors, improving agricultural marketing networks, promoting credit discipline, and supporting private enterprises.
The CMMFI seeks to enhance farmers’ income and foster economic growth by providing easy access to credit. The initiative targets a broad range of beneficiaries, including farmers, entrepreneurs, self-help groups (SHGs), farmer producer organisations/companies, and cooperative societies. By focusing on key economic areas, the scheme aims to create a more robust agricultural infrastructure and improve market access for farmers and entrepreneurs alike.
However, many identified beneficiaries are reportedly still awaiting financial support.
Confirming this, a beneficiary from Wokha told Nagaland Post that the delay was due to the slow transfer of funds from the government to the designated banks.
Expressing disappointment, he said the delay in fund disbursal was undermining the scheme’s objective of supporting unemployed youth and farmers, reflecting widespread concerns among beneficiaries about the effectiveness of the scheme.
A beneficiary from Kohima shared his own struggles. After applying in October 2023, he claimed to have received no update from the department concerned. Upon enquiry, he was told that due to Nagaland’s limited independent revenue generation, banks were hesitant to participate actively in the scheme, which had led to a temporary halt in disbursements. He also expressed frustration over the perceived lack of fairness in the selection process.
The CMMFI is also facing criticism over procedural bottlenecks. The perception that the selection process lacks fairness has also fueled frustration, with some beneficiaries alleging that their efforts to comply with the requirements went unrecognised unless they had connections.
Dimapur’s progress and ongoing issues: Shedding light on the scheme’s progress in the district, Deputy Commissioner (DC) Dimapur, Tinojongshi Chang disclosed that the district had been allocated Rs 5 crore under CMMFI, benefiting over 100 individuals so far.
He admitted that there was no uniform selection process for applicants, adding that the applications were assessed based on documentation. If all documents and the detailed project report (DPR) were complete, these were forwarded to the banks, which made the final decision based on certain criteria.
“All developmental departments are eligible for the scheme based on their specific needs. They review applications and forward them to the banks for sanctioning. Currently, the scheme is still in the initial stages, and no defaulters have been reported,” he clarified said.
However, he acknowledged that documentation issues remained a significant hurdle, leading to many rejections.
The State Bank of India (SBI) has been the most active bank in facilitating the CMMFI, with a significant number of sanctions occurring there due to the high number of beneficiaries holding accounts with the bank.
Banks are tasked with not just approving loans but also monitoring their recovery and ensuring that projects are functioning effectively.
Chang admitted that some banks had experienced delays due to pending document verifications. Additionally, many applications remain on hold as the banks await government subsidies.
Approximately 40-50 applicants are currently in limbo, with their applications pending confirmation from the banks. Once the government subsidies are released, these applications are expected to move forward.
Even when beneficiaries apply for larger sums, the final loan amount is determined based on the specific requirements of the project, verified through spot checks by the banks.
The DC hoped that the scheme would significantly benefit unemployed youth, although he noted that the preference for subsidies over loans among the Naga people presented a recurring challenge.
“The banks have the authority to make the final call on loan amounts based on their assessments. Each bank follows specific criteria, and we have instructed them to disburse the loans as soon as possible,” Chang stated, adding that reasons for rejections should be communicated to the applicants to ensure clarity.
He stressed transparent communication and the need for banks to clearly outline reasons for rejecting applications. He clarified that there was no deduction from any department and that the banks held full responsibility for sanctioning loans based on the viability of the projects.
Meanwhile, SBI Regional Business Office (RBO) & Lead Bank Office (LBO) Dimapur chief manager Temsurenla Jamir, who is also in charge of Dimapur, Peren, and Niuland districts, mentioned that beneficiaries needed guarantors who held government jobs to avail the loan.
She said if a beneficiary failed to repay, the equated monthly installments (EMI) were deducted from the guarantor’s account, and if a guarantor’s amount was insufficient, two to three guarantors were required.
Jamir stated that the selection of beneficiaries was done by the District Level Implementation-cum-Monitoring Committee (DLIMC) headed by the DC, adding that the loans were disbursed in phases except for vehicles, which were on a one-time payment basis. She claimed that delays in disbursement occurred when beneficiaries were unreachable.
She said that six-month moratorium was given to beneficiaries, excluding vehicles, which had a one-month moratorium. Jamir disclosed that most beneficiaries opted for projects under the Animal Husbandry & Veterinary Department. She mentioned that the scheme had been successful with no defaulters, as the project was in its initial stage.
Acknowledging that there was a need to raise awareness about the scheme among people and stressing that all banks’ participation was crucial for the scheme’s success, she admitted that some private banks were not participating for reasons unknown.
She encouraged entrepreneurs to start with small amounts and explore other available schemes. She revealed that total beneficiaries stood at 759, with Mokokchung having the highest number of beneficiaries (131), followed by Zunheboto (127) and Dimapur (115), while Mon district had the least beneficiaries (seven).
The total number of rejected application stood at 589 and total application pending was 890. She mentioned that Rs 15,72,75,282 in subsidies had been disbursed across various district banks, with Rs 2,96,51,528 being disbursed among 115 beneficiaries in Dimapur alone.