(The Gist of Kurukshetra) Institutional Credit for Small Farmers [FEB-2018]
(The Gist of Kurukshetra) Institutional Credit for Small Farmers
Institutional Credit for Small Farmers
The Government has increased accessibility of credit for farmers with a record credit target of Rs 10 lakh crore. It has also taken several measures to increased institutional credit flow and to bring more farmers including small and marginal farmers within the institutional credit fold. Some of these measures are detailed below:
- Interest Subvention Scheme: Under the Interest Subvention Scheme (ISS), Short term Crop loans upto Rs.3 lakh are extended to farmers at a subvented interest rate of 7 per cent per annum for a period up to one year. In case of prompt repayment, the farmers can avail a prompt repayment incentive of 3 per cent per annum and thus the effective rate of interest on such loans is only 4 percent.
- Priority Sector Lending Guidelines: which mandate all Domestic Scheduled Commercial Banks to earmark 18 per cent of their Adjusted Net Bank Credit (ANBC) for lending to Agriculture.
- Kisan Credit Card: aimed at providing adequate and timely credit support from the banking system under a single window to the farmers for their cultivation and other needs. All the banks have been advised to implement the scheme.
- Joint Liability Groups: To bring small, marginal, tenant farmers oral lessees, etc. taking up farm activities, off-farm activities and non-farm activities, into the fold of institutional credit, joint Liability Groups (JLGs) have been promoted by banks.
- Relief measures during natural calamities: These include, restructuring/rescheduling of existing crop loans and term loans, extending fresh loans, relaxed security and margin norms, moratorium,etc.
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