Bangalore rural will get Rs 275 cr credit

Villagers in Bangalore rural district may get up to Rs 275 crore as credit from various banks. Two-thirds of the amount will go to agriculture, according to the district credit plan for fiscal 2005 released here on Monday.

Credit linking of self help groups, which worked well this year, will expand in the coming year. Lending to small scale industry will increase 25 per cent to Rs 17 crore, the banks said.

The plan is short, by over Rs 150 crore, of the potential for farm credit in 2005 as estimated by the National Bank for Agriculture and Rural Development (Nabard). It does, however, represent close to a 52 per cent increase over the outlay for fiscal 2004. Lending for "agriculture and allied activities" grew nearly 80 per cent over last year to Rs 192.41 crore.

Yet, there was a desperate need to promote farming as a combination of several activities that spread risks and improved farmers' ability to earn more, B P Kani Ram, deputy commissioner for Bangalore rural said at a function to release the plan. The district also held the dubious distinction of having "not one non-loan farmer with crop insurance".

Some way must be found to induce these farmers to get crop insurance too, Kani Ram said. "One reason could be, many of them grow ragi, a hardy crop. They often grow just enough to cross the minimum quantity over which crop insurance will not be available."

The 2001 census found there were some 3.7 lakh cultivators in the district, of which 2.7 lakh were small and marginal farmers. These may also be the people who have a greater need for loans, but find it difficult to get conventional credit.

Self help groups (SHGs) could be the answer, bank officials said.

There are some 5,600 "stree shakti" groups that Canara Bank has identified for credit linking under the scheme.

The bank, also the lead district bank for rural lending, has sanctioned some Rs 20 crore for these SHGs. By February, about 2,400 SHGs had been financed, Annappayya, a general manager said. The bank aimed to disburse some Rs 400 crore, "credit-linking" some 1 lakh SHGs by July 6 next year, when its centenary year ends.

Nabard has also identified a host of "infrastructure gaps" that will have to be reduced for farm credit to take off, says T Ramaswamy, Nabard's district development officer for the district.

They include the need for taking better techniques and cropping practices to farmers and getting them involved in watershed projects, he said. There are eight blocks/taluks in Bangalore rural district, each of which will get more money in the current fiscal.

They include Channapatna, Devanahalli, Doddaballapur, Hoskote, Kanakapura, Magadi, Nelamangala and Ramanagaram. Lenders include Canara Bank, which accounts for over a third of the outlay and other state-run banks and financial institutions.