The National Bank for Agriculture and Rural Development (Nabard) on Wednesday said it would increase investment credit to the rural sector by 8 per cent and short-term credit by 14 per cent in 2010-11.
K G Karmakar, managing director, Nabard, said in 2009-10, the bank disbursed Rs 12,000 crore as investment credit and had set a target of Rs 18,000 crore for the current fiscal. Similarly, for short-term credit, such as crop loans, the target is Rs 24,000 crore, as compared to Rs 21,000 crore last year.
The bank had disbursed around Rs 18,088 crore for creation of rural infrastructure last year through Rural Infrastructure Development Fund (RIDF) as compared to the target of Rs 18,000 crore.
“Total disbursement, under RIDF currently stands at Rs 1.22 lakh crore,” he said. “Of this, 40 per cent was for road development, 40 per cent for irrigation and 20 per cent for agriculture and social sector projects.”
“Going forward the challenges are food security, eroding poverty, village infrastructure and financial independence,” he added. Karmakar said cluster development was essential in rural areas. “We (the banking sector) neglected rural services and now they have to be the focus.”
Credit still is a costly affair for the rural population and the industry should find a way to get cheaper resources so that they can lend at affordable rates, he said.
