Explained: What is the Loan Scheme for Prison Inmates in Maharashtra?

The Maharashtra prisons department has launched a loan program for inmates serving sentences in state prisons. The credit program called Jivhala is offered by the Maharashtra State Cooperative Bank. The pilot was introduced for prisoners at Yerawada Central Jail in Pune and will gradually be rolled out to nearly 60 prisons across the state.

According to bank and prison officials, this is probably the first type of credit scheme for prisoners in India. Existing loan initiatives for prisoners are intended for rehabilitation after the end of their prison sentence.

So what is this initiative, and who is eligible? How will inmates repay the loans? The Indian Express explains:

What is the Maharashtra loan scheme for prisoners and who is eligible?

The credit scheme, called Jivhala which means ‘affection’ in Marathi, was started mainly for convicted prisoners who are serving a prison term of more than three years. Officials said the majority of inmates are sole breadwinners and their incarceration has left their families without a source of income. Therefore, while the loan will be disbursed in the inmate’s name, it will be extended to designated family members.

In the initial phase, a loan of Rs 50,000 will be granted at an interest rate of 7%. Of the interest earned by the bank, one percent will be returned to the system as a contribution to the Prisoner Welfare Fund. The loan will be granted without any mortgage or guarantor requirement.

Inmates will be able to use the loans for their children’s education, medical treatment of family members, legal fees or any other expenses. Bank officials said they discovered that more than 75% of applications were for agricultural purposes.

How will inmates repay the loans?

Upon entering the prison system, an inmate is classified as skilled, semi-skilled, or unskilled and assigned to various industrial and manufacturing units inside the prison. For this work, they are paid between 50 and 70 rupees as a daily wage.

The money, deposited in their accounts, can be used to buy basic necessities from the prison canteen and/or can be sent home. Inmates derive their income from prison upon release.

Bank officials said that once an inmate takes out a loan, the calculated equivalent monthly installment will be deducted directly from their prison accounts.

The launch of the Jivhala program and the road ahead

On May 1, Maharashtra Day, the state’s Home Minister Dilip Walse Patil launched the Jivhala program at Yerawada Central Jail. He presented an entertainment check to an inmate during the reception.

Officials from the Maharashtra State Cooperative Bank earlier this year pitched the idea for the scheme to the Department of Prisons and the Home Ministry. After holding consultations and collecting input from civil society representatives, the program was approved at the end of March.

In the pilot phase, loan applications from 222 male and eight female inmates at Yerawada Central Prison are being processed by bank officials. Depending on the response to the pilot project and the creditworthiness of inmates, a decision will be made to increase the loan amount.

The program will soon be expanded to other prisons in the state, including central prisons, open prisons and district prisons.

Officials said that in addition to being a crucial financial aid for the families of inmates, the credit program will also help preserve delicate relationships between inmates and their family members, and will also be used to lay the groundwork of their lives once their sentence has been served.

Newsletter | Click to get the best explainers of the day delivered to your inbox

Clifton L. Boyd