Thiruvananthapuram: The National Bank for Agriculture and Rural Development (NABARD) will pay greater focus on financing through 'Joint Liability Groups' (JLGs) in Kerala as it is found more effective way of priority sector lending, reports PTI.
JLGs are informal groups of even 4-10 individuals joining together for the purpose of availing bank loans through group mechanisms against mutual guarantee.
According to NABARD's State Credit Plan 2011-12, financial inclusion through JLGs would be deepened in partnerships with neighbourhood groups like 'Kudumbasree', non-governmental organisations (NGOs) and banks.
Over 21,000 JLGs had been promoted by the bank in the last year in Kerala alone. It also gives promotional assistance for formation and nurturing of JLGs by banks and NGOs, sources said.
Through JLGs, the bank could "reach the rural masses including the tribals, fisherfolk and farmers in a better way," a NABARD document quoting Dr Prakash Bakshi, executive director, said.
NABARD's 'State Credit Plan' for 2011-12, an aggregation of potential linked credit plans of the 14 districts of Kerala, envisaged an outlay of Rs58,159 crore.
While the 'primary sector' comprising agriculture and allied activities would get Rs25,872 crore, the 'secondary sector' with small and micro enterprises would get a credit share of Rs4,130 crore.
The 'tertiary sector' including small road transport, tourism, housing and educational loans would get an outlay of Rs28,155 crore under the Credit Plan.
To help farmers meet growing expenses, the bank would ensure 100% coverage of Kisan Credit Cards (KCC) to all eligible farmers in the state. Efforts will also be done to make KCCs smart and linking to ATMs, it says.
The plan has laid focus on adequate credit estimate for crop production, organic farming, land development, soil and water conservation, rural tourism and traditional industries like coir, handlooms and handicrafts.
NABARD's annual financial assistance to Kerala for various economic activities in rural sector and rural infrastructure creation is in tune of over Rs2,100 crore.
While it had provided an assistance of Rs913 crore to banks for agriculture lending and non-farming activities, Rs837 crore was outlayed under short-term credit during 2009-10.
For creation of rural infrastructure, loans to the tune of Rs382 crore was provided to the government of Kerala during the same period, sources said.
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