Instead of elevating their living standard NMDFC beneficiaries are left struggling to repay the loan to avoid recovery calls. Syed Asma reports the post-flood woes of the already marginalised loanees

Representational Pic
Representational Pic

His expressions changed as his phone rang. A wave of gloom takes over his youthful face. With a look of embarrassment, Aamir attends the call and replies, “I will try and manage something. It won’t be repeated…yes..I will visit the office today…” the call is dropped.

He often gets these phone calls. It was a call from one of his acquaintances who agreed to sign as a guarantor for Aamir’s loan.

Last year, before the September 2014 floods hit the Valley, Aamir learned about National Minorities Development and Finance Corporation (NMDFC) scheme.

Amir, 22, approached Entrepreneur Development Institute (EDI), an implanting agency for NMDFC schemes in J&K, to avail a loan. After convincing two of his relatives to stand as guarantors Amir applied for a loan of Rs 5 lakh.

The objective of the NMDFC schemes is “to help backward sections amongst the notified minorities through economic and developmental activities. The corporation runs a good number of schemes and provides concessional finance to Muslims, Christians, Sikhs, Buddhists, Jains and Parsis for self-employment and income generation activities,”.

Aamir, a resident of Srinagar, left his studies after his father’s untimely death. His father left behind a garment shop that used to sustain the five members family. After his father’s death, Amir took the role of bread earner for the family, enabling his siblings to continue their studies without any financial hiccups. However, the modest income generated from the garment shop was not enough for Amir and his family to keep the show going. Then came the NMDFC scheme and Rs 5 lakh loan.

Amir spent a part of the amount on the renovation of the shop, and the rest on purchasing the garments. The plan was to start it on a high scale, in a new way. Thus, Aamir invested every penny in his business.

“I thought if I invest everything in the business, I will be able to make the business flourish in a good way, but I believe it was not my destiny,” Aamir say with helplessness.

Working hard to have a decent earning, Aamir was hit hard by the September floods. It devastated everything; at least everything in his small knitted world. His house, accommodating godown in the basement, and the shop was under water for many weeks and Aamir could save nothing, neither his house nor godown and not even his shop.

“Every bank and institution gave some relaxation to their loan holder after floods but we are still shot notices as defaulters,” says Aamir. “My guarantors call me every day. They complain of getting harassed at the hands of bankers.”

“I somehow could do away with the pain of losing my father but this embarrassment is killing.”

Despite the fact that NMDFC schemes are meant for the marginalised sections of the society, people like Amir who have lost their avenues of livelihood in the floods, are not given any concessions. Out of 1500 beneficiaries of NMDFC in J&K around 300, including Amir, are from the worst flood-hit areas of Kashmir. “Flood-hit beneficiaries have pinned their hopes on EDI,” says an official adding, “but they don’t understand that we (EDI) are just a recommendatory body. We have no authority to wave off loans or offer concessions. It is beyond our mandate.”

Since 2010 two of premium NMDFC schemes: Term Loan and Education Loan are implemented through EDI. Under Term Loan scheme, aspiring entrepreneurs who belong to families living way double below the official Below Poverty Line, are provided finances at a low-interest rate to help them set up their own business units. So far EDI has helped 1072 units avail financial assistance under NMDFC schemes across J&K.

Three years ago, Sanaullah, 39, a car mechanic by profession opted for a loan of Rs 2 lakh under NMDFC’s Term Loan scheme. He wanted to start his own automobile workshop to help his family earn a decent living.

But by September 2014, Sanaullah, a father of two sons and a daughter, who resides near the banks of Jhelum River in Srinagar, saw his dreams getting washed away.

The loan amount had given new lease of life to Sanaullah, who after working as labourer at a workshop, wanted to establish his own setup. “The amount was sufficient for me to address all my woes,” says Sanaullah.

After the loan amount was sanctioned Sanaullah could see a visible change in his lifestyle. “I shifted my children to a private school in my locality. I even purchased a new uniform for them. But the dream was short lived. Floods devastated everything,” says a visibly dejected Sanaullah whose house and workshop was under water for 27 days.

The officials from EDI estimated damages to the tune of Rs 1.53 lakh to his workshop. “But even then I am receiving recovery calls. It is embarrassing.”

With tears rolling down his sunken cheeks, Sanaullah takes out a small notebook from his cupboard and reads out the instalments he has paid since last three years. “See, I was never a defaulter, you can check.”


Out of Rs 2 lakh, an amount of Rs 131047 is still outstanding. “But now I think I cannot do it,” he sobs.

The family informs that Sanaullah survived a major heart attack after he visited his home and workshop post floods. Since then he is bed ridden. “I could not bear the sight of my devastated house and workshop,” says Sanaullah.

Presently, Sanaullah’s younger brother, a labourer, is helping manage the household expenses. “I now regret availing the loan. I wanted to leave behind an asset for my kids but I am only leaving behind burden for them,”says a sobbing Sanaullah. “I proved to be a bad father.”

Tabish, a resident of south Kashmir is another such ‘defaulter’.  Son of a labourer, Tabish wanted to establish a small trading unit in his locality. He chose to start with a ready-made garment shop.

After learning about NMDFC scheme Tabish availed a loan of Rs 1.5 lakh, hoping the money will help him lessen his father’s burden of running a family of five members.

With one of Tabish’s sister getting married this year, things are getting tough for the family. “We can only sympathise with the families, nothing more. It is not in our domain to wave off loans,” says an official of the EDI wishing not to be named. “We recently took up their case with the NMDFC but they were not convinced.”

During a recent visit Najma Heptulla, Minister of Minority Affairs told officials at EDI that this amount cannot be waived off in any case. “She (Heptulla) said that although this is a small amount (around Rs 5 crore) we cannot set precedence by waiving it off for a particular region,” says an official who was part of the meeting.

“The union minister (Heptulla) then urged Basharat Bukhari, minister for Relief and Rehabilitation, to provide this amount from the relief package that centre was about to announce.”

However, nothing has been formalised so far in this regard. “It seems the government is least concerned about our plight,” feels Amir. “Unlike other financial institutions, EDI has not insured the properties of people who have availed loan through it,” blames Amir.

The official at EDI responds saying, “Floods came as a wake-up call, from now on we will be insuring the properties as the banks do.”

As for people like Amir and Sanaullah, their dreams of a respectable and sustainable livelihood are shattered.

Note: All the names of the loanees in the story have been changed on request.


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