To ensure availability of financial services to the weaker sections and low income groups, National Bank for Agriculture and Rural Development (NABARD) is working hard to achieve targets under the Union government scheme of financial inclusion in Uttar Pradesh.
Under the process, NABARD is concentrating primarily on its self help group (SHG) model, which is the most effective way of reaching the vulnerable sections.
Besides the SHGs, the share cropper and tenant farmers are also on the priority list of the Bank.
According to NABARD about 10 per cent cultivation in the state is being done by sharing the cultivated lands by the farmers. It has also made operational a Joint Liability Group (JLG) for the farmers to disseminate credit via formal financial institution.
Working upon its Village Development Plan, the bank proposes to deliver complete financial and advisory support to over 85 villages across the state.
Marking the beginning of the project, NABARD has identified five villages in UP to carry a pilot programme on the same. The districts covering the villages include Lakhimpur Kheri, Hardoi, Sultanpur, Unnao and Rae Barelli.
“We are working to tune this development programme as per the specific requirements of our state,” Sukhbir Singh, Chief General Manager, NABARD (Lucknow) told Business Standard and added that once the pilot is successful the initiative will be rolled in all 85 villages.
The new plan is expected to be launched next month.
Working aggressively on the financial inclusion front, the bank along with the Union Government has established two funds this fiscal.
The Financial Inclusion Promotion and Development Fund is constituted for meeting the cost of development and promotional intervention, while the Financial Inclusion Technology Fund is to meet the costs of technology adoption
Each fund will have an initial corpus of Rs 500 crore, with a start up funding of Rs 250 crore each, to be contributed equally by the Government of India, Reserve Bank of India and NABARD in 40:40:20 proportion and an annual accretion thereto.
The allocation and process in which these funds are to be used is still to be worked out.
The purpose behind this concept is to ensure the availability of a range of appropriate financial services to every individual and enabling them to understand and access those services.
“However, inclusive finance does not require that everyone who is eligible uses each of these services, but they should be able to choose between the services as per their requirement, if they so desired,” informed Singh.
Apart from the regular form of financial intermediation, the exercise may include opening of basic no frills bank account for making and receiving payments, a savings product suited to the pattern of cash flows of a poor household, money transfer facilities, small loans and overdrafts for productive, personal and other purposes, etc.
According to Singh access to finance will empower the vulnerable groups by giving them an opportunity to have a bank account, to save and invest, to insure their homes access to credit, thereby facilitating them to break the chain of poverty.
To achieve greater financial inclusion the bank proposed greater expansion of its branches in rural areas and there is increased stress on Information Technology enabled (IT) services to meet the challenges of financial inclusion.
According to NABARD, the target set for each branch include financing 250 additional accounts every year, 100 kisan credit cards (KCC), 100 general purpose credit card (GCC) and 100 micro insurance policies to be issued.
The bank is also taking few innovative measures like disseminating KCC for crop loans, GCC for non farm sector and cresting developing self help group for the poorest of the poor.
