The National Bank for Agriculture and Rural Development (Nabard) is getting into micro finance in a major way this year.
KOLKATA: The National Bank for Agriculture and Rural Development (Nabard) is getting into micro finance in a major way this year. It will set up a separate non-bank finance company, christened NabFins, for the purpose.
NabFins will have a number of stakeholders, including scheduled commercial banks and other financial institutions. While the authorised capital will be around Rs 100 crore, Nabard’s stake in the venture will be 51%.
Nabard is in talks with a host of banks, including Corporation Bank, for the venture. This is likely to unleash competition in rural areas, where micro finance is picking up in a big way, with 8-10 big players in the field.
Y S P Thorat, chairman, Nabard, said: “We are in talks with many banks for the partnership and will finalise the details soon. Disbursements are expected to grow by Rs 100-150 crore every year. Unlike many other micro finance institutions, NabFins will offer extremely competitive rates”.
According to the chairman, many micro finance institutions offer credit at very high interest rates, sometimes at 30%, because of high transaction costs. “The new micro credit company will give credit at affordable rates, with coercive methods of recovery and bring in transparent systems,” he said.
Thorat was addressing a seminar on ‘Financial Inclusion’ organised by Ficci on Wednesday.As per the recommendation of the Rangarajan Committee, two funds -financial inclusion fund and financial inclusion technology fund — each of Rs 500 crore have been established with Nabard.
Nabard, along with different state governments, has taken part in aggregate agricultural development to identify the detailed “yield gaps” in the country.
This is been conducted with central government’s assistance of Rs 25,000 crore, along with an equal contribution from the state government.
Credit flow to the agricultural sector has grown to Rs 2 lakh crore from Rs 87,000 crore two years back. According to Thorat, while there has been an increase in agricultural credit and direct finance, there has been no significant impact as far as financial inclusion is concerned.
In the rural areas, over 50% of marginal farmers are not indebted as yet. The need of the hour is to upgrade the financial machinery, IT solutions for furthering outreach and delivery and increase awareness among poor.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}