 "Self-help groups, farmers struggling to get loans : RBI Deputy Governor")
Nearly half of self-help groups (SHGs) in the country are not linked to the formal credit system as small and marginal farmers continue to lack access to bank financing, Swaminathan J, Deputy Governor at the Reserve Bank of India (RBI), has said.
Swaminathan spoke at the Conference for Lead District Managers of Maharashtra in Tadoba, Chandrapur on November 30. The speech was uploaded on the RBI's website on Tuesday.
Micro, small and medium enterprises (MSMEs), particularly those led by women, are another "underserved group" of potential borrowers. "By adopting an empirical approach, combined with on-the-ground insights, we can design effective credit plans tailored to these segments. This can be achieved through suitable Potential Linked Credit Plans and targeted credit strategies at the block and district levels," he said.
“About half of self-help groups (SHGs) are yet to be linked to formal credit, and a large proportion of small and marginal farmers still lack access to bank financing."
Another class of potential borrowers which has remained underserved are the “MSMEs and within that, those led by women. Therefore, when we adopt an empirical approach coupled with your on-ground experience for designing a credit plan, the credit requirements of such segments can be effectively addressed through suitable Potential Linked Credit Plans as well as in block and district-level credit strategies,” he said.
Swaminathan emphasised that credit planning should adopt a "bottom-up approach" to convey the needs of the centres and then design a plan best suited to address those. "It is also important to understand that, while the targets should strive to be aspirational in ideas, they should be realistic enough to translate into execution and reflect the local credit needs."