There are media reports that the loan waiver scheme of the congress government in Madhya Pradesh has become a game changer for PACS and district central cooperative banks grappling with financial difficulties.
The scheme has helped cooperative banks tide their financial crisis over. Similarly, cooperatives have received around Rs 6,600 crore under the scheme. The scheme has also benefited those farmers who were not eligible to take fresh loans due to non-payment of their pending loans.
About 17 lakh farmers were not eligible but now they can take loans at zero rate of interest. During the Kharif season farmers can go to cooperative banks and and avail loans because all their dues are cleared by the government. A few cooperative banks now can also avail loans from Nabard.
Despite a public spat about the scheme between the congress and BJP, the scheme is supposed to have strengthened cooperative banks. It is reported that loans of more than 20 lakhs farmers have been waived off.
Due to the nonpayment of loans by farmers, state cooperative marketing federation had refused to give fertilizers to cooperatives.