•

• Credit Delivery System In Rural Areas

SAURABH JAIN
08 BS 000 3005
The Unfolding India Story

Rural
banking
Rural
banking
Financing
Rural India value chain

India –
The Economy

…a global giant in making

2
 The Rural Economy
GDP
(Rs. 28.3

Urban Rural
(Rs. 13.9 (Rs. 14.4

Non-Agri Agri
(Rs. 8.4 Tn) (Rs. 6.0 Tn)

Share of non-agricultural output has exceeded

agricultural output in the rural economy

Source: CERG (Consumer & Economic Research

Group – Based on research by Omkar Goswami
& Rama Bijapurkar)
 Increasing Rural & Agri Credit
Rural
Credit Agri Credit
(O/s)
(O/s) 1,44,23
3 Cr 64,972
Cr
6560 Cr
4940
Cr

1999- 2008- 1999- 2008-

00 09 00 09

Institutional Credit extended in rural India has

grown by
19% p.a. (compounded)

Source: RBI
The Unfolding India Story

Credit
Rural
Delivery
bankingin
System
Rural India Rural Areas

India –
The Economy

…a global giant in making

Rural Planning and Credit
Department
Credit Delivery Policy
NABARD
 NABARD
• Framing policy and guidelines for rural
financial institutions
• Providing credit facilities to issuing
organizations
• Preparation of potential-linked credit plans
annually for all districts for identification
of credit potential
• Monitoring the flow of ground level rural
credit
 NABARD
Credit Facilities
• Refinance  Facilities 
• Direct Credit 
• Investment Credit 
• Rural Infrastructure 
• Farm Sector Schemes 
• Rural Non Farm Sector 
• Rural Housing 
• Others
 Regional Rural Banks(RRB)
• The government of India set up Regional Rural Banks
(RRBs) on October 2, 1975. The banks provide credit to
the weaker sections of the rural areas, particularly the
small and marginal farmers, agricultural labourers,
artisans and small entrepreneurs.
– South Malabar Gramin Bank
– North Malabar Gramin Bank
– Pragathi Gramin Bank
– Shreyas Gramin Bank
And individual loans - both Farm and Non-Farm

Farmer Finance

Agriculture Agri Credit Line

(pre-harvest)
Farm Equipment

Agriculture Commodity Finance

(post-
harvest)
Irrigation facilities
Agriculture
(infrastructur Micro Warehouses
e)

Jewel Loans
Non - Farm
Microfinance
 The current rural banking has prohibitive cost

High Transaction Costs

H
ig
h

y
ri

lit
sk

bi
ch

ta
fi
ar

o
ge

pr
Lo

w
w

Lo
te sa
u
ch ge
no
lo
gy

lBranch
centric
lHigh
Manual
 … with varied risks

Price Risk Yield Risk

Risk
Elements
Crop Risk
Liquidity
Constraints
Corporate Payment
Risk
Farmer Payment No Sale Trans.
Risk by Farmer
Some Loan Products in Rural
Areas
 Canara Bank
• Kisan Credit Card
• Loans for Agri clinics / Agri
business Centres
• Minor Irrigation / Pumpset Loans
• Farm Machinery Loans
• Farm Development Loans
• Vehicle Loan for Agriculturists
• Loan for Cold Storage and Rural
Godown
• Canara Kisan OD
 State Bank of India
• CROP LOAN (ACC) • FARM MECHANISATION
• PRODUCE MARKETING SCHEMES
LOAN SCHEME • FINANCING OF COMBINE
• LOAN AGAINST HARVESTERS
WAREHOUSE RECEIPTS / • KISAN GOLD CARD
COLD STORAGE SCHEME
RECEIPTS • LAND PURCHASE
• KISAN CREDIT CARD SCHEME
SCHEME (KCC) • KRISHI PLUS SCHEME
• AGRICULTURAL TERM • ARTHIAS PLUS SCHEME
LOANS (ATL)
• DAIRY PLUS SCHEME
• LAND DEVELOPMENT
SCHEMES • FINANCE TO
HORTICULTURE
• MINOR IRRIGATION
SCHEMES • LEAD BANK SCHEME
• AGRI BUSINESS HEADS
 Co-Operative Bank(KSCARDB)
• Ordinary Loans
• OL - FS (Ordinary loan)
• Scheme Loans
• ARF-FS (Scheme Loan -
Farm Sector)
• ARF-FM (Scheme Loans -
Farm Mechanisation)
• ARF-BG (Scheme Loan - Bio
Gas)
• ARF-SGSY/IRDP
• ARF-FLEXI CREDIT
• ARF-Fin. TWO WHEELERS
• ARF-Agri. Clinics &
Business
• ARF-Land Purchase
• Non - Farm Loans
• NFS-CLS (Composite loan
scheme)
• NFS-SRWTOS (Small Road
and Water Transport
Operators Scheme)
• NFS-ILS (Integrated Loan
Scheme)
• NFS-SGSY/IRDP
• NFS-SEMFEX II
• NFS-NABARD HOUSING
• NFS- Education Loan
• Housing Loans
• NHB HOUSING
• HDFC HOUSING
References:-
• www.nabard.com
• www.sbi.co.in
• www.canarabank.com
• www.rbi.org

Thanks