Rural credit pegged at Rs 1.42 lakh crore

The total rural credit during the last financial year stood at Rs 1.15 lakh crore, registering a growth of 32 per cent as compared to the previous year.

This year's target for the same is fixed at Rs 1.42 lakh crore, said National Bank for Agriculture and Rural Development (Nabard) chairperson Ranjana Kumar, while complementing all the commercial banks for meeting the targets of agricultural credit for the year 2004-05.

Addressing a press conference, Ranjana Kumar observed that while the banks, both public sector and co-operative, are gearing up to double the agricultural credit as envisaged by the Union finance ministry, other important areas like extension and supply of quality seed to farmers too have to be taken care of by state governments to ensure positive results in the farm sector.

As part of the support required for commercial, regional, rural and co-operative banks to ensure credit flow to rural sector, Nabard has allowed the banks to prepay high-cost, long-term loans to the extent of Rs 3, 690 crore besides offering a special liquidity package amounting Rs 2,500 crore to banks for extending second line credit during the two-year moratorium period announced by the Prime Minister for the drought-hit farmers in the country, she said.

Terming that the linkage between the rural self-help groups (SHGs) with banks is another important responsibility undertaken by the apex rural development bank, Ranjana Kumar said that the average loan size of SHGs has also gone up from Rs 23,000 in the year 2003 to Rs 42,620 as on March 2005. Credit to SHGs has also been increased to Rs 2,995 crore during the year from Rs 1,855 crore in 2003-04.

Meanwhile, credit linkage to tenant farmers under the joint liability format would be implemented across the entire country this year, she said. This facility is currently being implemented in Andhra Pradesh and four other states on a pilot basis and over Rs 30 crore was disbursed to these groups.

Andhra Pradesh was the major beneficiary in sanctioning loans to various projects during 2004-05. Out of the Rs 8,283 crore sanctioned for various rural projects in the country, Andhra Pradesh alone received Rs 1,500 crore, she said.

Earlier, Ranjana Kumar met chief minister Y S Rajasekhara Reddy and assured full support in extending necessary sanctions to the state projects.