Page 82 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 6: NABARD

5. Farmers now enjoy hassle free access to credit and security through 714.68 lakh Kisan Notes
Credit Cards that have been issued through a vast rural banking network.
6. Under the Farmers' Club Programme, a total of 28226 clubs covering 61789 villages in 555
districts have been formed, helping farmers get access to credit, technology and extension
services.

Caselet NABARD to assist 10 lakh Small Farmers using
Self-help Group Model

he National Bank for Agriculture and Rural Development (NABARD), in a bid to
step up its focus on the farm sector, plans to bring together about 10 lakh small and
Tmarginal farmers across the country in 2010-11 along the lines of the self-help
group (SHG) model.
This will help farmers harness their collective bargaining power to access credit at
competitive rates, improve productivity using quality inputs, and realise better price for
their produce in the market, said Mr Umesh Chandra Sarangi, Chairman of NABARD.
The development bank, whose primary objective is to facilitate flow of credit for agriculture,
rural infrastructure and rural development, and supervision of rural financial
intermediaries, will organise joint liability groups (JLGs) comprising 7-10 farmers in the
small and marginal category, he said.
"We have set a target of forming one lakh joint liability groups in the current financial
year. About 10 lakh farmers will benefit by becoming members of the groups," said Mr
Sarangi.
In the last couple of years, NABARD had organised around 30,000 JLGs across the country.
Pointing out that most of the farmers in India owned less than 2 acres of land, the NABARD
chief said that by becoming a member of the JLG, small and marginal farmers who
generally depend on informal sources of financing at usurious interest rates, can get credit
from banks on competitive terms.
Ever since the SHG-Bank linkage programme was conceptualised and launched by NABARD
in 1992, about 47 lakh self-help groups (as of March-end 2009), predominantly comprising
poor women, have been able to access the formal banking sector in a sustainable and cost-
effective manner.
By handling savings and internal lending, the SHGs have matured, acquired
creditworthiness for themselves and earned the confidence of banks. As of March-end
2009, banks had an outstanding exposure of 22680 crores to 42 lakh odd members of
SHGs.

NABARD is not averse to setting up a bank provided this does not interfere with its
primary mandate of facilitating flow of credit for agriculture, rural infrastructure and
rural development, said Mr Sarangi.
In his reply to a question on whether NABARD would leverage its long-standing experience
in rural lending to get a banking license from RBI, the NABARD chief said, "Without
compromising our primary mandate, which is refinancing and supporting the needs of
the agriculture sector in the country, we will not be averse to any new ideas."
Contd...

LOVELY PROFESSIONAL UNIVERSITY 77