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| But more alarming is that credit growth has been only Rs 2,785 crore in the same period, as against Rs 66,271 crore last year in the corresponding months. |
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| It is against this backdrop that micro-finance practitioners assembled in Delhi on the 12th of September for their annual conference under the aegis of Sa-Dhan, the Association of Community Development Finance Institutions. |
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| Strangely their concern was in complete contrast to that of mainstream financial players. The micro-finance institutions were complaining of a lack of funds, despite the availability of bankable assets. |
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| Estimates show that there are about 75 million poor households (of which 60 million are in the rural areas and 15 million in urban areas) and these have an annual credit requirement of about Rs 50,000 crore. |
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| Against this, disbursals last fiscal were less than even Rs 1,000 crore. Even this meagre portfolio of micro-credit has been declining sharply in recent years. |
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| At the end of 2001-2002, the share of agriculture in the outstanding credit of scheduled commercial banks was under 10 per cent, which is less than even personal loans (for housing and consumer durables). |
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| Going forward, the focus on financial performance will imply that the importance of small loans for farm and non-farm activities can only decline. In 2002, 45 per cent of the borrowers of scheduled commercial banks were from rural areas, but they accounted for only 13.4 per cent of their outstanding loans. |
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| For metros, the corresponding numbers were 15 per cent and 54 per cent, respectively. With their focus shifted to financial performance, the banks will naturally shift their portfolio to the low cost urban segment. |
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N.S. Sisodia, banking secretary, ministry of finance, who delivered the keynote address, did in fact own up to the government
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