1 / 29

Financial Inclusion -Credit Policies

Financial Inclusion -Credit Policies. ANUJA KUMARI. Measuring financial Exclusion. Limitations of Rural Area. Limited staff Poor infrastructure like education/housing Staff not oriented to “ marginal “ operations Functional style not cost beneficial for generating viable operation.

alodie
Download Presentation

Financial Inclusion -Credit Policies

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Financial Inclusion -Credit Policies ANUJA KUMARI

  2. Measuring financial Exclusion

  3. Limitations of Rural Area • 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.

  4. technology upgradation • Smart card • Hand held terminal • Central CPU • Low cost ATMs • Mobile Phone Banking • SMS Banking • Public Call Office (PCO) Connectivity.

  5. Technological Upgradation • 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 5

  6. TECHNOLOGY : AN ENABLER Web Camera forPhotograph • Optical Biometric scanner for Fingerprints Pad for Signature capturing • Smart Card (to be provided to every Customer) and Point of Sales Machines (PoS) for reading and writing Smart Cards for transactions • Laptop with webcam, biometric devices - for capturing the account opening details, thumb impression, photo and account details Battery Power back-up for undisrupted enrolment 6

  7. value of output vis-a-vis Credit

  8. Desireable Non Intervention Policy • 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

  9. Agriculture Productivity-Issues • 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

  10. Agriculture Credit Policy • 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

  11. Agriculture Credit Policy cont... • Friendly insurance instruments • Raise credit and insurance literacy • Linkage through Self Help Groups (SHG) • Implement Skill Development Programme • Marketing of Produce • Training and Sensitisation • Programme for organised sector • Constitution of Task Force for Monitoring loan taken from un organised sector by farmers

  12. Marketing helps... • Optimization • of • Resource use • Output management • Increase in farm incomes • Widening of markets • Growth of agro-based industry Addition To National Income BY value addition and employment creation

  13. Credit Schemes • Kisan Credit Cards • General Credit Cards • Laghu Udyami Card • Business correspondent and facilitators • SGSY Scheme for poverty alleviation • SHG - Bank Linkage Programme • MFI - Bank Linkage • Women Entrepreneurs Development Programmes • Rural Entreprenurship programme • Development Programmes in clusters • skills upgradation and capacity building • Farmers’ Clubs • J. L. G. of Farmers

  14. Schemes cont.... • Jawahar Gram Samridhi Yojana • Employment Assurance Scheme • Rural Housing • Credit-Cum-Subsidy Scheme for Rural Housing • Wastelands Development • Project Golden Thread

  15. KISAN CREDIT CARD • 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.

  16. General Credit Card & Laghu udyami Card • LUCGiven for 5 yrs • Traders, Artisans, • Small businessmen, small Ind. • unit. • Max. amount Rs10.00lacs. • Validity for 3 years. • GCCScheme 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

  17. SGSY Scheme for Poverty Aleviation • 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

  18. Farmer's Club • Mission: Dev. Through • credit, technology transfer • Awareness & Capacity Building • Size Of club: Min. 10 members • Max. no limit. • Membership :Farmers & Non Farmers • Operational 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/-

  19. Joint Liability Group 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 activities Membership 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 FI 100% Refinance available from NABARD. Personal & crop insurance available.

  20. Self Help Group • Concept floated by Prof. Yunus of Bangladesh • Through Gramin Bank, Bangladesh. • Micro Credit to poor like landless traders, • Petty tradersartisans & 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 byNABARD. • 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

  21. Technological upgradation Fund scheme • 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.

  22. Credit linked Capital Subsidy Sch. for Tech. Upgradation • 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.

  23. 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 Entrepreneurship Assistence & development Scheme

  24. Project Golden Thread • 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

  25. Rural Housing • 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 • NonSC/ST rural poor below • poverty line • Aid granted

  26. Credit Cum Subsidy Scheme For Rural Housing • Operative since 01/04/1999 • Aegis “Ministry Of Rural • Development • Target Group: • Rural household with • annual Incomeupto Rs32000/- • min. 60% of fund toSC/ST • Purpose: Consruction of New houses • Target 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

  27. Pradhan Mantri Gram Sadak Yojna • 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

  28. Source of fund Financial Inclusion Fund (FIF) – Rs 5000 million Financial Inclusion Technology Fund (FITF) – Rs 5000 million Govt. of India : RBI : NABARD (40:40:20) FIF to support Developmental and Promotional activities To secure greater financial inclusion in hitherto unbanked areas. FITF to enhance investment in: • Information Communication Technology (ICT) • Stimulate the transfer of research and technology in financial inclusion • Increase the technological absorption capacity • Encourage an environment of innovation .

  29. THANK YOU

More Related