ANUJA KUMARI

5 1 .6 % o f th e ru ra l h ou seh o ld s a re exc lu d ed .

F in an c ia lly b y exc lu d ed4 0 .2 7 m illion

F in an c ia lly In c lu d ed3 4 .7 0 m illion

S m all an d M arg in a l F arm ers7 4 .9 7 m illion

F in an c ia lly exc lu d ed5 .6 6 m illion

F in an c ia lly in c lu d ed8 .7 2 m illion

O th er th an sm all an d m arg in a l fa rm ers1 4 .3 8 m illion

F arm ers8 9 .3 5 m illion h ou seh o ld s

N on F arm in g H ou seh o ld s5 8 .5 5 m illion

R u ra l H ou seh o ld s(1 4 7 .9 m illion )

Limited staff

Poor infrastructure like education/housing

Staff not oriented to “ marginal “ operations

Functional style not cost beneficial for generating viable operation.

Too much documentation; time taken for loan sanction

Lack of viable schemes for implementation

Opportunity costs for loans is perceived to be high.

Smart card

Hand held terminal

Central CPU

Low cost ATMs

Mobile Phone Banking

SMS Banking

Public Call Office (PCO) Connectivity.

5

Allows branchless doorstep banking in remote/low population density areas.

Usage of Biometric smart cards/Mobile

Reach the Last Mile Villages.

Transactions id Convenient & Hassle free manner

Cost Effective

Accessible

•

Smart Card (to be provided to every Customer) and Point of Sales Machines (PoS) for reading and writing Smart Cards for

transactionsLaptop with webcam, biometric devices - for capturing the

account opening details, thumb impression, photo and

account details

6

TECHNOLOGY : AN ENABLERTECHNOLOGY : AN ENABLER

Web Camera for Photograph

Optical Biometric scanner for Fingerprints

Pad for Signature capturing

Battery Power back-up for undisrupted enrolment

Gross Value of Output, Value of Input and Short-Term Credit Rs crore

Source: National Account Statistics 2005, [reproduced from Mohan, 2006]

Year

Gross Value

ofOutput

Value of

Input

Short TermCredit

Short Term Credit as a percentage

of

Value of input as a

percentage of

Outputs

Inputs

Outputs

1998-99 488731 93416 10821

11.58 2.21 19%

1999-2000 514718

103170 12610

12.22 2.45 20%

2000-01 518693

107020 15442

14.43 2.98 21%

2001-02 562024

112194 18882

16.83 3.36 20%

2002-03 557035

114613 23324

20.35 4.19 21%

2003-04 635104

127365 31972

25.10 5.03 20%

Recognise that there are no easy-quick fix solutions

Initiate exercise to understand the cost of delivering rural financial service products in a scientific manner

possibly examine activity based costing

Remove formal and informal interest rate caps

Allow banks to “exploit” rural areas

Leave operational decisions to the institutions

Continue to remove bottlenecks for microfinance to flourish

Continue to direct branch licensing towards rural areas

Continue to provide targets for rural lending

Changing technology – deskilling of farmer

Inputs moving out of farmer control

Seeds moving towards research intensity

Research and Extension services moving from public to private space

Pesticides being peddled as extended service of extension

No comprehensive risk mitigation products

Downside risks are unlimited, upside benefits seem to have a ceiling

Formulation of an agriculture credit policy with thrust on rain fed areas.

User friendly insurance instruments.

Spread of institutional arrangements Extend institutional credit to marginal and small farmers

Proper monitoring mechanism for productive use of loans. Linking of farming process to nearest agricultural experts for proper technical advice

Improving the credit absorption capacity of farmers

Friendly insurance instruments

Raise credit and insurance literacy

Linkage through Self Help Groups (SHG)

Implement Skill Development Programme

Marketing of Produce

Training and SensitisationProgramme for organised sector

Constitution of Task Force for Monitoring loan taken from un organised sector by farmers

Optimization

of Resource use

Output management

Increase in farm incomes

Widening of markets

Growth of agro-based industry

Addition

To

National

Income

BYvalue addition and

employment creation

Kisan Credit CardsGeneral Credit CardsLaghu Udyami CardBusiness correspondent and facilitators SGSY Scheme for poverty alleviation SHG - Bank Linkage Programme MFI - Bank Linkage Women Entrepreneurs Development

ProgrammesRural Entreprenurship programme Development Programmes in clusters skills upgradation and capacity buildingFarmers’ ClubsJ. L. G. of Farmers

Employment Assurance Scheme

Rural Housing

Credit-Cum-Subsidy Scheme for Rural Housing

Wastelands Development

Project Golden Thread

Jawahar Gram Samridhi Yojana

Production Credit without Floor Limits

Given to Farmers

Revolving Cash Credit valid for 5 years

Primarily for crop production

Also given for Capital for purchase of equipment such as Tractor & equipments& also personal expenses.

Amount as per eligibility criteria- Asset value of farmer

Attracts saving interest on credit balance

Crop Insurance on the basis of scale of finance of crops raised during the seasons.

GCC Scheme implemented by SCBs & RRBs

Given to individuals in rural/ Semi Urban areas

Credit without insistence of security

Maximum amount Rs25000/-

Revolving Cash Credit limit.

Valid for 3 years

LUC Given for 5 yrsTraders, Artisans,

Small businessmen, small Ind. unit.

Max. amount Rs10.00lacs. Validity for 3 years.

Purpose: Bring rural Poor over Poverty Line.

Applicable : Rural Area

Nature : Revolving funds/ Cash Credit

Eligibility : SHGs to be in existence for 6 months .

Fund : From DRDA & Banks.

Rev. Fund : Min. Rs 5000/-; Max. Rs.10000/-

Subsidy : 30% Project cost Mx. Rs7500/- 50%Project cost Mx.Rs10000/- SC /ST 50% Project cost Mx.1.25 lacs group loan. max. Rs.10000/- per capita

Mission: Dev. Through credit, technology transfer Awareness & Capacity Building

Size Of club: Min. 10 members Max. no limit.

Membership :Farmers & Non FarmersOperational Area: 2-3 villages in

contiguous basis.Bank Linkage: Saving account must.Role: to enroll farmers

inform agricultural events Hold 2-3 meetings a month. Coordinate with Bank for Credit flow

Expenses:NABARD assist agencies @ Rs10000/- perannum for 3 years

Mandatory Expenses: Formation & maintenance: RS2000/- Awareness &Orientation : Rs5000/- Meeting with experts : Rs3000/-

Short Term Working capital loan for agri.Loan also given for allied activities in the

farm, other domestic requirement, education, consumable items, medical expenses, credit against debt from non institutional lenders, marketing and other productive purposes.

Given to Tenant farmers, Oral Lessees, share croppers.

JLG Min 4 & Max. 10 Members.JLG members to indulge in similar activitiesMembership primarily of tenant/ small

farmers.Members to have same socio-economic

background.Members to be engaged in agri. Activity for

min one year.

Group members not to be defaulters of FI100% Refinance available from NABARD.Personal & crop insurance available.

Concept floated by Prof. Yunus of Bangladesh Through Gramin Bank, Bangladesh.Micro Credit to poor like landless traders,

Petty traders artisans & other people of small means.SHG on basis of Kalia Committee recommendation Banks to finance SHG & SHG to give funds to memb.Fin. to SHG which show group dynamics, financial

management capabilities & behavioural discipline.

Broad Criteria for selection of SHG laid down by NABARD.

SHG to be in Existence for at least 6 months & should have:

(i) Homogeneity (ii) Successful Saving from own resources (iii) Democratic working (iv) Maintenance of proper accounts (v) support from NGOs

Scheme Operated by Ministry Of Textile

For technology Up-gradation in Textile

SIDBI & IDBI are nodal agencies.

Scheme in operation since 01.10.2005

Units availing bank Finance are entitled interest subsidy @ 5%

Capital Subsidy of 10% of purchase Price of machinery for up-gradation of technology.

Provided to SSI going for GTAB approved Technological Up-gradation

For significant up gradation Of Technology

For Installation of improved environmental condition.

Installation of anti pollution measures

Installation of Energy Conversion Machinery

Subsidy is @15% of purchase price of Machinery

Maximum Amount of loan Rs100lacs

Maximum amount of subsidy is Rs15 lacs

Scheme will be in operation during 11th plan period of 2007-12.

Nodal Agency is SIDBI.

Extension of loan Facility to NGOs for on lending to women.

For setting up small & micro enterprise in non-farm sector.

Banks to give loan upto 70% of project cost

Ministry of MSME gives grant upto 30% of project cost.

Eligible Activities : (i) Training in credit usage (ii) Skill development training (iii) Equity/margin money for acquiring infrasructure (iv) Exhibitions & marketing arrangements

Rural Development Project

Focuses Sericulture Activity

Improves Livelihood of Poor

Involves development of non-mulberry silk namely Eri (Endi) & Muga

Department of Panchayat & Rural Development

Project is under the special SGSY

Covering all aspects from plantation to spinning with modern machines

Presently implemented in Eight states

Essential for socio-economic development

Indira Awaas Yojana

Started in may 1985

A sub-scheme of Jawahar Rozgar

Primarily to help construction of dwelling units .

Upgradation of existing unserviceable kutcha house

SC/ ST freed bounded labourers

Non SC/ST rural poor below poverty line

Aid granted

Operative since 01/04/1999Aegis “Ministry Of Rural

DevelopmentTarget Group:

Rural household with annual Income upto Rs32000/- min. 60% of fund toSC/ST

Purpose: Consruction of New housesTarget Area:

Rural 20 KM from Metro/large Town 5 KM from Medium/ Small Town

Loan Amt: Max. Rs. 40000/-Subsidy : Max. Rs 10000/- Cost Of subsidy borne by

Centre: State 75:25 Repayment:

Max. 7 years

Rural Road Connectivity

Good all-weather roads

Effective poverty reduction programme

Roads for Rural Habitations with a population of more than 500 persons

surfaced roads (black topped/ cement concrete)

necessary cross-drainage

Financial Inclusion Fund (FIF) – Rs 5000 millionFinancial Inclusion Fund (FIF) – Rs 5000 millionFinancial Inclusion Technology Fund (FITF) – Rs 5000 Financial Inclusion Technology Fund (FITF) – Rs 5000 millionmillionGovt. of India : RBI : NABARD (40:40:20)Govt. of India : RBI : NABARD (40:40:20)

FIF to support FIF to support Developmental and Promotional

activities To secure greater financial inclusionTo secure greater financial inclusionin hitherto unbanked areas.in hitherto unbanked areas.

FITF to enhance investment in:FITF to enhance investment in: Information Communication Technology Information Communication Technology (ICT)(ICT) Stimulate the transfer of research and Stimulate the transfer of research and technology in financial inclusiontechnology in financial inclusion Increase the technological absorption Increase the technological absorption capacitycapacity Encourage an environment of Encourage an environment of innovation .innovation .