Patna: A government-backed loan scheme intended to boost small-scale industries in Bihar has become the centre of a large-scale fraud, with hundreds of beneficiaries disappearing after receiving funds, a preliminary investigation has revealed.
The Khadi and Village Industries Commission (KVIC), which had extended loans under the Pradhan Mantri Rojgar Srijan Karyakram to support micro and small enterprises, discovered irregularities after beneficiaries failed to repay or respond to follow-up communications. The loans, ranging from Rs 5 lakh to Rs 10 lakh, were sanctioned in 2022 to encourage rural entrepreneurship.
When KVIC attempted to contact borrowers for repayments, many could not be traced. The commission subsequently enlisted the Bihar Circle of the Postal Department to carry out an investigation. Of the 3,940 entrepreneurs under scrutiny, 1,942 have been investigated so far.
Findings show that at least 484 individuals took the loans but never established any industry, while 603 provided fake addresses and are now untraceable. These individuals allegedly pocketed the funds without fulfilling the basic requirement of starting a business.
“This is public money meant for grassroots development. Misusing such schemes not only delays regional progress but also undermines public trust in government initiatives,” said a KVIC official familiar with the probe.
Districts such as Madhepura, Aurangabad, Begusarai, and Arwal were among those where several entrepreneurs failed to set up the promised ventures.
The Postal Department has stated that investigations into the remaining 1,990 cases will be concluded within a week, and a special task force has been constituted to expedite the process.
