Improving Credit Access to India’s Agricultural Sector?

As part of its effort to increase credit flow to rural farmers, India’s National Bank for Agriculture and Rural Development (NABARD) will extend a pilot project, initially launched in eight states, to include the entire country this year.

The project is geared towards promoting and facilitating entrepreneurship among farmers. The project aims to educate farmers, who are encouraged to create "joint liability groups" which are akin to traditional self-help groups (SHGs) yet comprise a cross-section of farmers and participate in agri-business workshops. The number of such groups has grown by 49% in the past year. The workshops are meant to expose farmers to viable investment options such as minor irrigation and agricultural engineering.

For the past two decades, agriculture credit has grown by 15%. But with newly focused attention on the potential of this group, credit availability has increased by 40%. Sadly, the history of government-driven expansion of credit often creates more poverty, not less.

Additional Resources

1) Main article discussed in entry, Hindu Business Line: "NABARD to Extend Farm Credit to All States."

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