Loan without security for ‘very poor’ auto drivers

New Delhi: In a relief to thousands of autorickshaw permit allottees, the State Transport Authority has decided to provide collateral-free loans for buying autos.

The loan without the collateral security, in the form of immovable property, will be provided by the Delhi Financial Corporation (DFC).

A government official said that in case of default, the autorickshaw and its permit will be forfeited by the DFC. 

The State Transport Authority (STA) Board, in its meeting last month, discussed financial assistance to auto permit holders on easy terms and conditions.

It was observed that the collateral security is not available with most of the permit holders as they are “very poor”, and so they cannot obtain loan for purchasing autos, the official said.

Since the private financiers charge high interest rates, it was suggested that the maximum number of autorickshaws should be financed through the DFC, he said.

Earlier, the guarantee norms of the DFC to finance autorickshaws demanded collateral security of immovable property owned by the borrower with a clear marketable title and valuation not less than 100 per cent of the loan amount.

The autorickshaw unit (ARU) of the transport department launched a scheme for allotment of 10,000 permits in January this year.