Ordinance soon to prevent pvt money lenders from charging high interest rates

The Andhra Pradesh government is planning to introduce a bill and implement it through an ordinance to prevent private money lenders from charging beyond 12 per cent interest on loans to farmers.

Disclosing this in an interview to a European news corporation, chief minister Y S Rajasekhara Reddy said that to ensure institutional credit to the farmers and reduce their debt burden, his government has already initiated steps which include a moratorium on the payments of amount borrowed by farmers from banks and private money lenders.

Terming lack of availability of institutional credit as one of the important reasons for farmers' suicides, the chief minister said that his government is planning to enhance credit facilities through banks to about 12 lakh farmers this year. Of the 1.10 crore farmers, 20 lakh farmers have never utilised crop loans.

Keeping this in view, the state government provided a loan of Rs 12,000 each to eight lakh farmers during 2004-05. During 2005-06, the government has decided to enhance the credit amount to around Rs 16,000 crore in order to provide them more relief, he said.

According to him, the state government is also planning to develop one 'seed village' in every mandal all over the state which would act as a nodal village for producing quality seeds to be supplied in the neighbouring villages and ensure good produce.