DEVELOPMENT THROUGH SHG - NABARD

The 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 marginal 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 Rs 22680 crore 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."

Recently, Nabard appointed global management consultancy firm Boston Consulting Group (BCG) to prepare a report to restructure and diversify its operations to leverage its expertise in refinancing. The development bank is also seeking to implement a core banking solution

Nabard's business volume jumps 14% in FY10

The government-run National Bank for Agriculture and Rural Development (Nabard) did business worth a record Rs 1.36 lakh crore in 2009-10 (long-term and short-term refinancing, plus funding under Rural Infrastructure Development Fund), while its current loans crossed Rs 1 lakh crore.
The financial institution has appointed The Boston Consulting Group to prepare a roadmap for the future. A senior bank official told Business Standard, “Nabard has performed well despite the economic mayhem worldwide. This clearly proves the bank is gearing up to become a more effective organisation.”

The volume of business operations grew from Rs 81,220 crore in 2006-07 to Rs 98,700 crore in 2007-08, Rs 1.19 lakh crore in 2008-09 and Rs 1.36 lakh crore in 2009-10. The growth in 2009-10 was around 14 per cent over the previous year. According to the official, Nabard’s production credit department achieved the highest-ever disbursements of Rs 23,849 crore in 2009-10, while the investment credit department achieved its target of Rs 12,000 crore.

“Disbursements under Rural Infrastructure Development Fund (RIDF) have been Rs 18,888 crore. Our outstandings under RIDF have now crossed Rs 60,000 crore, which will ensure steady flow of income for the years to come,” he said. Managing Director KG Karmakar said the institution’s net surplus would exceed Rs 1,600 crore for 2009-10. He called upon employees to work hard to maintain growth, productivity and profitability in 2010-11.

NABARD’s funding to state agri rises 54%

National Bank for Agriculture and Rural Development (NABARD)'s financial support to agriculture activity, rural development and rural infrastructure development in the state of Gujarat has touched a new high during the financial year 2009-10. The body's total financial assistance reached Rs2,888.61 crore during the financial year 2009-10, 54% more than the previous year. Allocation to state involves Rs1,897.93 crore refinance support to banks and Rs990.68 crore support to the state gover...

Rs 2,385-cr Nabard grant for MP rural banking

National Bank for Agriculture and Rural Development (Nabard) has pumped into the rural banking sector of Madhya Pradesh a whopping Rs 2,385.39 crore as refinance, which is 5 per cent higher than the previous year.

Besides, it disbursed loans to the tune of Rs 602.79 crore to the MP government for bolstering rural infrastructure, taking the total disbursement in the state during the year to Rs 2,988.18 crore. Refinance assistance to banks for term lending in farm and non-farm sector during the current year stood at Rs 224.23 crore.

The refinance disbursed to various banks was mainly for farm mechanisation, minor irrigation, non-farm sector, rural housing, Swarnjayanti Gram Swarozgar Yojna, rural transport and dairy development. In addition, refinance assistance of Rs 2,161.16 crore, a growth of 22 per cent over the previous year, was provided for short-term credit operations to cooperative and regional rural banks during the year, a Nabard official said.