A tree can be surety for loan in Dangs!

Nature can now be a ‘guarantor’ for tribal people of the Dangs if they want a bank loan, thanks to the ‘Green Credit Scheme’ introduced by the state government. Under the scheme, tribal people of the district can take a bank loan against timber trees grown by them. Further, loans under the scheme will be given at 4% simple interest.

Giving this information, SK Nanda, principal secretary, state environment and forests department, said tribal people don’t own property which can serve as collateral for bank loans. “But under the Green Credit Scheme, if a tribal has no land but has timber trees such as teak which are old enough to be cut and auctioned, such trees can serve as security for bank loans,” he said.

Nanda further said that the scheme is currently available to the tribal people only in the Dangs district but, if it is successful, it will be introduced for tribal people in other districts of the state as well.

Giving an example, Nanda said that a teak tree fetches around Rs70,000. “So if a farmer owns 10 such trees, their total value comes to Rs7 lakh. A bank would offer loans up to 50% of this value which, in this case, would come to Rs3.5 lakh,” he said. In Dangs district, Bank of Baroda is already giving loans against trees as collateral, he added.

“The district forest officer (DFO) will certify to the bank that whenever the teak trees offered as security are auctioned in the next two years, the loan given by the bank will be paid back with interest. The extra money will be deposited in the personal bank account of the farmer,” Nanda said.

But how would the scheme benefit the forests? “Besides helping tribal farmers get money for their children’s education, marriage or for purchase of vehicles, the scheme will also encourage the farmers to grow more trees. This will ultimately benefit nature as well,” Nanda said.