Hyderabad, April 02: With reduction in MFI lending to self-help groups (SHGs), the National Bank for Agriculture and Rural Development (NABARD) is ready to provide refinance even to commercial banks to enable them fill the credit gap to SHGs.
According to P. Mohanaiah, Chief General Manager, NABARD AP Regional Office, the MFIs were financing to the tune of Rs.5,000 crore annually and the gap was estimated to be around Rs.1,000 crore.
He said NABARD, which normally provides refinance to Cooperative and Regional Rural Banks (RRBs), advocated the banking system to fill the credit gap arising out of reduction in MFI lending.
Rs. 9,600 crore
It had provided refinance to the tune of Rs.9,600 crore to RRBs last year and the entire amount went to SHGs. This year, the requirement might be for Rs.1500 crore, he added.
Giving details of the credit support and funds sanctioned for various projects during 2010-11 and the plan for 2011-12 at a press conference here on Friday, he said the bank planned to provide Rs.4,000 crore credit support under crop loan during 2011-12. It extended a total credit support of Rs.6758.20 crore last year, including Rs.3569.64 crore as short-term credit.
He said the total outstanding business of the AP regional office had increased from Rs.9,424.19 crore in 2010 to Rs.1,1140.48 crore on March 31, 2011.
With NABARD facilitating formation and nurturing more than 5,300 ‘Farmers’ Clubs’ over the years, he said around 1,500 such clubs would be promoted this year. He expressed confidence the proposed ordinance giving certain rights to tenant farmers would facilitate them to get lending through Joint Liability Groups (JLG) programme.
In order to provide sustainable tribal development through family-based approach, NABARD has implemented 50 projects under ‘Maa thota’ programme in 17 districts, benefiting 37,657 families. Another 20 projects would be taken in 2011-12 to cover 15,000 families.
Mr. Mohanaiah said that NABARD would adopt 40 villages for their holistic development and promote the setting up of 100 new ‘Rural Marts’ and 40 ‘Rural Haat’ projects this year.
–Agencies