FICCI–RURAL MARKETING SUMMIT 2005

THEME :- New Initiatives For Credit Flow In Rural Areas

PRESENTED BY :

S K MITRA, EXECUTIVE DIRECTOR, NABARD

08 OCTOBER 2005

PUBLIC POLICYINITIATIVES/PRONOUNCEMENT

18 JUNE 2004 – Pronouncement of Hon. Finance Minister for Doubling of Agricultural Credit in 3 years

NABARD Coordinates/Monitors the agricultural credit flow for Commercial Banks (both public & private), RRBs, Cooperative Banks (both SCBs/CCBs & SCARDBs)

POLICY INITIATIVES

Making ineligible farmers eligible for support from banks (Relief to farmers in arrears, farmers in distress, one-time settlement, etc.)Increasing credit flow growth – 30% over last year’s disbursement (100 new farmers per branch, 2 to 3 agrl. Investment projects/branch, 10 Agri Clinics AgriBusiness Centres per district, educational loans, etc.)

GROUND LEVEL CREDIT FLOW2004-05 (RS. CRORES)

1,15,242(86,897)

1,04,500TOTAL

79 %30,638(26,875)

39,000Coop. Banks

138 %11,718(7,581)

8,500RRBs

128 %72,886(52,441)

57,000Com. Banks

% of TargetAchievementTargetAgency

( ) represents achievement of 2003-04

GROUND LEVEL CREDIT FLOW 2004-05(Rs.Crores)

0

1 0 0 0 0

2 0 0 0 0

3 0 0 0 0

4 0 0 0 0

5 0 0 0 0

6 0 0 0 0

7 0 0 0 0

8 0 0 0 0

C B s R R B s C o o p . B k s

T a r g e tA c h i e v e m e n t

R R B s8 %

C o o p . B k s3 7 %

C B s5 5 %

C B sR R B sC o o p . B k s

Agency Target Disb.(Apr-Aug.

2004)

Target (2005-06)

Disb. (Apr-Aug. 2005)

Growth in disb. Over Aug. 2004

Comm. Banks

57000 22639.29(39.71%)

87200 36304.42(41.63%)

60.36%

Coop. Banks

39000 14760.44(37.84%)

39600 18556.03(46.85%)

25.72%

RRBs 8500 4537.53(53.38%)

15200 6603.81(43.45%)

45.53%

Total 104500(say 105000)

41937.26(39.94%)

142000 61464.26(43.28%)

46.56%

PROGRESS DURING 2005-06Rs. Crores

OTHER IMPORTANT INITIATIVES - 2005-06

i) Launching of National Horticultural MissionDoubling of horticultural production by 2011-12 to 300 million tons(Action Plans already approved for States like Maharashtra, Orissa, UP, Chhatisgarh, Andhra Pradesh , Karnataka, Rajasthan, Tamil Nadu, West Bengal)

.....contd..

OTHER IMPORTANT INITIATIVES - 2005-06....contd...

ii) Credit-cum-subsidy schemes in various sectors (cold storage, rural godowns, marketing infrastructure, market yards, grading/packaging, organic farming, food & agro processing, etc.

iii)Zero Cost Capital Support for Dairy & Poultry

iv) Coverage of all eligible farmers under KCC

v) Revision of scale of finance & unit cost

OTHER IMPORTANT INITIATIVES - 2005-06....contd...

vi) Increasing thrust of micro credit support through :

- mFI & SHG-Bank Linkage

- Augmentation of mFDFD to Rs. 200 Crs. - Rating of mFI for easier access to banks

- SHG formation and financing in 13 non13 non13 non---Southern statesSouthern statesSouthern states

Banking Correspondent & ‘Business Facilitator Models’ for Commercial Banks (Khan Committee recommendations)

Other Initiatives eventually contributing to increase in credit flow

Creation of Rural Infrastructures like roads, bridges, irrigation structures, etc.Loans out of Rural Infrastructure Development Fund (RIDF) with NABARD to State Govts.Grants under Rashtriya Sama Vikas Yojana(RSVY) of Planning Commission in 150 backward dists.(Rs. 15 crores per dist. Per year for 3 years ....contd...

Other Initiatives eventually contributing to increase in credit flow

...contd

Expansion of District Rural Industries Project (DRIP) to another 26 districts during 2005-06

Developing artisan clusters by NABARD, UNIDO, SIDBI, DC Handlooms, etc. ...contd..

Other Initiatives eventually contributing to increase in credit flow

...contd...Participatory watershed projects in dryland areas for improving soil & water use

Developing private wastelands based on agri-horti-forestrymodels with proper backward linkage support and forward buyback arrangements

Cumulative Growth in SHG-Bank Linkage(As on 31 March)

Priority States 2002 2003 2004 2005Assam 1,024 3,477 10,706 27,223Bihar 3,957 8,161 16,246 21,507Chhattisgarh 3,763 6,763 9,796 14,257Gujarat 9,496 13,875 15,974 23,781HP 5,069 8,875 13,228 16,158Jharkhand 4,198 7,765 12,647 19,946Maharashtra 19,619 28,065 38,535 55,397MP 7,981 15,271 27,095 38,943Orissa 20,553 42,272 77,588 1,10,364Rajasthan 12,56 22,742 33,846 53,739UP 33,14 53,696 79,210 1,08,315Uttaranchal 3,323 5,853 10,908 13,117West Bengal 1,143 32,647 51,685 77,201Total 1,41,804 2,49,462 3,97,464 5,81,986