Bengaluru: After the damage wrecked by the floods last August, Kodagu seems to be the most loan stressed district. The rate of loan defaults in Kodagu is as high as 3.03 percent, which is much higher than the industry average of 2.9 percent, says a report from the credit agencies Equifax and SIDBI.
The study, which surveyed all the districts in Karnataka, also listed Bengaluru, Haveri and Bagalkot among other regions with higher than average loan defaults.
Kodagu has an active loan portfolio of Rs 173 Crore comprising the debts taken by farmers, workers and others have from the banks, NBFCs and MFIs. “Kodagu has been affected by the recent floods. Both coffee plantations and farmers growing paddy and other crops were affected. Haveri and Bagalkot have been suffering successive droughts which have had an impact on loans,” said A Sridhar Murthy, General Manager, Bank of Baroda.
The bank officials in the state say that they are unable to recover loans mainly because of the election fever. “Politicians at all levels, MLAs, MPs, councillors, have all been talking about loan waivers. And this has had an impact on people’s inclination to pay back. Many people harbour this feeling that their loans will be waived and so, they need not pay back this crop season,” said a senior bank official, who did not want to be named.
