Nabard to expand farmer financing through self-help groupsJuly 22nd, 2008 - 9:12 pm ICT by IANS
Kolkata, July 22 (IANS) The National Bank for Agriculture and Rural Development (Nabard) will expand its pilot project for agricultural financing through self-help groups (SHG) this year, a top company official said here Tuesday. The pilot project would be launched in five to seven states, Nabard chairman and managing director Umesh Chandra Sarangi told reporters on the sidelines of the ongoing banking conclave in the city.
It has already launched the project in Andhra Pradesh, where the SHGs are called Raitu Mitra groups.
The project would give the banks the confidence to finance small and marginal farmers as SHGs have a record of repaying 95-98 percent of loan amount, Sarangi said.
“We are going to introduce technological, credit and marketing counselling in the rural areas that will help them in proper utilisation of credit and reduce misuse of loan,” he added.
In the past four years, there has been substantial increase in credit deployment by the cooperative banks, commercial banks and regional rural banks, he said.
In 2006-07, banks disbursed Rs.2,400 billion as credit. This year, the target is Rs.2,800 billion.
Per capita lending of commercial banks that fiscal was Rs.90,000, while cooperative banks lent Rs.20,000.
Commercial banks had 60 percent share of the total loan disbursed and cooperative banks had occupied less than 30 percent.
Though lending by commercial banks was more, cooperative banks had covered more farmers under loan disbursement schemes.
“This year we have kept a target of Rs.320 billion for long and short term re-financing,” Sarangi said.
Last year it was Rs.240 billion.
At present, Nabard has Rs.130 billion at hand for re-financing, out of which Rs.50 billion came from the Reserve Bank of India and Rs.30 billion was raised by issuing bonds. It had internal reserves of Rs.50 billion.
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