This document summarizes a presentation on rural financial markets and agricultural credit in Pakistan. It discusses the differences between rural and urban areas, defines rural and agricultural finance, and outlines challenges in rural financing including lack of collateral, natural risks, and political interference. It also provides an overview of Pakistan's economy and agriculture sector, the history of rural financial institutions, and recent government initiatives to expand agricultural credit.
Trend and Growth of Flow of Credit to Agriculture after 1991 in Indiaiosrjce
Agriculture in India is at a crossroads and major challenge of the policy makers is to reverse the
trend of deceleration in agricultural growth which is directly associated with the declining of public investment
in agricultural research and development, fragmentation of holdings, lack of infrastructure and structured
markets, outdated technology and inappropriate input pricing policies of the government. The crisis of
agricultural stagnation needs immediate attention and treatment on the part of planners and policy makers.
Recognizing the continuous deceleration of agricultural growth, the present study attempts to analysis the trend
and growth of flow of credit to agriculture after 1991in India. The study based on secondary sources of data
compile from several sources, revealed that structure of credit outlets has witnessed a significant change and
commercial banks have emerged as the major source of institutional credit to agriculture in recent years, but
the declining share of investmental credit in total credit may constrain the sustainable growth of agriculture in
India. The situation calls for concrete efforts to augment the flow of credit to agriculture, alongside to exploring
the new innovations in the farming practices, product design and methods of delivery through better use of
technology and related processes. Facilitating credit through processor, NGO’s and input dealers that are
vertically integrated with farmers for providing them critical inputs or processing their produce, could increase
the credit flow to agriculture significantly.
This document provides an overview of the history and development of credit policy for agriculture in India. It discusses how rural indebtedness has long been a problem and the various steps taken over time to address this, including establishing co-operative credit societies in 1904, priority sector lending requirements for banks in 1972, establishing regional rural banks in 1975, and developing new programs like interest subvention, debt waiver schemes, self-help groups, and financial inclusion initiatives. It also analyzes trends in the sources and growth of agricultural credit over time from different institutional agencies.
Macroeconomics Role Of Institutional Credit For Economic GrowthSpartanski
The document discusses the importance of institutional credit for agricultural growth and economic development in India. It notes that historically, agriculture has relied on informal credit sources that charge very high interest rates. The document outlines the establishment of institutional credit for agriculture in India via programs like priority sector lending and the Kisan credit card scheme. It finds that increased access to institutional credit is linked to higher agricultural productivity, food production and reduced farmer debt. However, it also flags issues like declining credit to agriculture from commercial banks and a need for expanded access to affordable credit via microfinance and technological solutions.
Agri business financing in bangladesh, a case study on bangladesh krishi bankAlexander Decker
This document discusses agribusiness financing in Bangladesh, using Bangladesh Krishi Bank as a case study. It provides background on agribusiness and its role in Bangladesh's economy. The objectives are to study Krishi Bank's agribusiness financing activities and performance, identify problems faced by the bank and clients, and suggest improvements. Key findings include Krishi Bank disbursed over 50 billion taka for agribusiness in fiscal year 2011, recovering 50 billion, with outstanding loans of over 116 billion taka and non-performing loans of 14.17% of outstanding amounts.
The document discusses rural credit in India. It explains that rural economies depend on credit between agricultural seasons as there is a long gap between sowing seeds and generating income. It then outlines the history of rural credit in India, including exploitative moneylenders prior to independence and the establishment of institutions like NABARD to regulate rural financing. Today, rural credit is provided by various institutions at lower interest rates. The document also categorizes rural credit into short term loans (under 1 year), medium term loans (2-5 years), and long term loans (5-20 years) and explains their purposes. Finally, it lists reasons for rural credit needs like long gestation periods of crops and funds required for inputs and personal expenses
Rural Financial Markets and Agricultural CreditZain Khan
This document summarizes a presentation on rural finance and agricultural credit. It discusses the differences between rural and urban areas, defines rural finance and agricultural finance, and outlines challenges in rural lending such as lack of collateral and political interference. It also provides an overview of Pakistan's economy and agriculture sector, the history of rural financial institutions in Pakistan, and recommendations for best practices based on the Bank Rakyat Indonesia model.
This document discusses the need for and sources of credit in Indian agriculture. It notes that agricultural credit is a crucial input, and that the major historical source was private moneylenders who charged high interest rates. To address this, a multi-agency approach using cooperatives, commercial banks, and regional rural banks now provides cheaper and more adequate credit to farmers. It then outlines the various financial needs of Indian farmers and the roles of credit. Finally, it details the major institutional sources of agricultural credit in India, including cooperatives, commercial banks, land development banks, regional rural banks, government loan schemes, and NABARD.
Trend and Growth of Flow of Credit to Agriculture after 1991 in Indiaiosrjce
Agriculture in India is at a crossroads and major challenge of the policy makers is to reverse the
trend of deceleration in agricultural growth which is directly associated with the declining of public investment
in agricultural research and development, fragmentation of holdings, lack of infrastructure and structured
markets, outdated technology and inappropriate input pricing policies of the government. The crisis of
agricultural stagnation needs immediate attention and treatment on the part of planners and policy makers.
Recognizing the continuous deceleration of agricultural growth, the present study attempts to analysis the trend
and growth of flow of credit to agriculture after 1991in India. The study based on secondary sources of data
compile from several sources, revealed that structure of credit outlets has witnessed a significant change and
commercial banks have emerged as the major source of institutional credit to agriculture in recent years, but
the declining share of investmental credit in total credit may constrain the sustainable growth of agriculture in
India. The situation calls for concrete efforts to augment the flow of credit to agriculture, alongside to exploring
the new innovations in the farming practices, product design and methods of delivery through better use of
technology and related processes. Facilitating credit through processor, NGO’s and input dealers that are
vertically integrated with farmers for providing them critical inputs or processing their produce, could increase
the credit flow to agriculture significantly.
This document provides an overview of the history and development of credit policy for agriculture in India. It discusses how rural indebtedness has long been a problem and the various steps taken over time to address this, including establishing co-operative credit societies in 1904, priority sector lending requirements for banks in 1972, establishing regional rural banks in 1975, and developing new programs like interest subvention, debt waiver schemes, self-help groups, and financial inclusion initiatives. It also analyzes trends in the sources and growth of agricultural credit over time from different institutional agencies.
Macroeconomics Role Of Institutional Credit For Economic GrowthSpartanski
The document discusses the importance of institutional credit for agricultural growth and economic development in India. It notes that historically, agriculture has relied on informal credit sources that charge very high interest rates. The document outlines the establishment of institutional credit for agriculture in India via programs like priority sector lending and the Kisan credit card scheme. It finds that increased access to institutional credit is linked to higher agricultural productivity, food production and reduced farmer debt. However, it also flags issues like declining credit to agriculture from commercial banks and a need for expanded access to affordable credit via microfinance and technological solutions.
Agri business financing in bangladesh, a case study on bangladesh krishi bankAlexander Decker
This document discusses agribusiness financing in Bangladesh, using Bangladesh Krishi Bank as a case study. It provides background on agribusiness and its role in Bangladesh's economy. The objectives are to study Krishi Bank's agribusiness financing activities and performance, identify problems faced by the bank and clients, and suggest improvements. Key findings include Krishi Bank disbursed over 50 billion taka for agribusiness in fiscal year 2011, recovering 50 billion, with outstanding loans of over 116 billion taka and non-performing loans of 14.17% of outstanding amounts.
The document discusses rural credit in India. It explains that rural economies depend on credit between agricultural seasons as there is a long gap between sowing seeds and generating income. It then outlines the history of rural credit in India, including exploitative moneylenders prior to independence and the establishment of institutions like NABARD to regulate rural financing. Today, rural credit is provided by various institutions at lower interest rates. The document also categorizes rural credit into short term loans (under 1 year), medium term loans (2-5 years), and long term loans (5-20 years) and explains their purposes. Finally, it lists reasons for rural credit needs like long gestation periods of crops and funds required for inputs and personal expenses
Rural Financial Markets and Agricultural CreditZain Khan
This document summarizes a presentation on rural finance and agricultural credit. It discusses the differences between rural and urban areas, defines rural finance and agricultural finance, and outlines challenges in rural lending such as lack of collateral and political interference. It also provides an overview of Pakistan's economy and agriculture sector, the history of rural financial institutions in Pakistan, and recommendations for best practices based on the Bank Rakyat Indonesia model.
This document discusses the need for and sources of credit in Indian agriculture. It notes that agricultural credit is a crucial input, and that the major historical source was private moneylenders who charged high interest rates. To address this, a multi-agency approach using cooperatives, commercial banks, and regional rural banks now provides cheaper and more adequate credit to farmers. It then outlines the various financial needs of Indian farmers and the roles of credit. Finally, it details the major institutional sources of agricultural credit in India, including cooperatives, commercial banks, land development banks, regional rural banks, government loan schemes, and NABARD.
This document discusses agriculture credit and small and medium enterprises (SMEs) in Pakistan. It provides classifications and sources of agriculture credit, as well as current credit schemes. It also outlines problems faced by farmers and SMEs, including lack of financing, skilled labor, and marketing challenges. Additionally, it compares agriculture and credit systems between Pakistan and India.
Orrissa executive summary for finance, subsidy & project related support co...Radha Krishna Sahoo
NABARD prepares Potential Linked Credit Plans (PLPs) for each district of India to enable effective utilization of credit and rural development resources. The document discusses the PLP process in Orissa and provides an overview of the state's economy, banking profile, trends in ground level credit flow, and NABARD's development assistance to the state. Key points include increasing agricultural credit disbursements, a focus on improving credit in KBK regions, and NABARD sanctioning over Rs. 2,154 crores for rural infrastructure projects in Orissa through RIDF funds.
Analysis Report on Bangladesh Krishi BankAsif Islam
Bangladesh Krishi Bank (BKB) is a specialized bank established by the Bangladeshi government to provide financing support to farmers and develop the agricultural sector. As the primary occupation in Bangladesh is agriculture, BKB aims to boost crop and fisheries production through loans for activities like cultivation, pond excavation, and livestock rearing. It also supports agro-industries and poverty alleviation programs. However, BKB faces some limitations like insufficient capital that prevents it from achieving its objectives fully. Recommendations are made to address the bank's challenges.
The document discusses various aspects of agricultural finance in India, including sources and structures of credit for farmers. It notes that non-institutional sources like money lenders were the main source of agricultural credit historically but now account for only 25% of credit, while institutional sources like commercial banks, cooperatives, and regional rural banks provide most credit. It outlines credit needs of farmers based on time period and purpose, and describes the roles of major institutions in providing agricultural finance like NABARD, commercial banks, cooperatives, and regional rural banks.
Agriculture contributes around 15% to India's GDP but employs over 50% of the population. Rural areas are home to over 70% of India's population, many of whom are poor farmers dependent on agriculture. The government prioritizes raising agricultural productivity to reduce poverty. Formal agricultural financing through banks has grown over time from money lenders to include cooperative banks, nationalized banks, regional rural banks, and now a multi-agency approach including public, private, and foreign banks. Key agricultural financing products include crop loans and Kisan Credit Cards (KCC), which consolidate short and long-term credit needs. However, many small and marginal farmers still lack adequate access to agricultural credit.
1) The document analyzes the impact of credit from the Zarai Taraqiati Bank Ltd (ZTBL) on agricultural productivity in the Kashmore district of Sindh, Pakistan.
2) It finds that loanee farmers who received credit from ZTBL had higher cultivated areas, costs of production, and gross margins than non-loanee farmers.
3) However, the impact of credit on agricultural productivity was limited due to small farmers facing constraints in accessing credit and properly utilizing loan amounts for agricultural purposes.
The document provides an overview of the North East region of India. It notes that the region is extraordinarily diverse with various ethnic groups and rich in biodiversity and natural resources like forests, hydroelectric potential, oil, gas and coal. The region produces over 10% of India's forest products and 30% of India's hydroelectric potential. It is well suited for agriculture but faces issues like poor governance, infrastructure, unemployment and utilization of resources. The handloom sector is also unorganized. The document then provides recommendations and solutions to address these issues.
Agriculture sector is playing a significant role in the
development of rural areas in our country. Agriculture is the
main occupation and still is a strong means of livelihood and
there is necessity for ensuring sustainability in these
livelihoods. Agriculture and allied sectors contribute nearly
22% of GDP of India and further 9.93% contribution in total
export of India.
Rural indebtedness, agricultural distress,
dependency on private money lenders, and farmers suicides
are common features surrounding Indian Agriculture. For
more than 100 years RBI and Central Government have been
making efforts to enhance institutional credit in rural areas
particularly to assist agricultural operations. But economic
survey (GOI) 2010 shows that out of 27 public sector banks,
only 14 sector banks achieved the agricultural credit target of
18% agricultural credit and in case of private sector banks
only 8 achieved the target of 18% for lending to agriculture
in 2009.
The document evaluates financial inclusion in India by analyzing trends such as the spatial distribution of banking services, number of deposit and credit accounts, population coverage by region, agricultural credit coverage, and coverage of farmer households by social group and land holding. It finds that while the number of bank branches has increased across regions, the rise in credit accounts per population has not been significant. Coverage of farmer households and small/marginal farmers also remains low. The study recommends increasing priority on financial inclusion policies to better cover the poor through strategic credit provision, cooperative use, procedural changes, and government/technology initiatives.
The document outlines the major institutions that provide rural credit in India, including NABARD as the apex bank for rural credit and agriculture; commercial banks that were nationalized in 1969 and 1980 to prioritize agriculture credit; regional rural banks established in 1975 to provide credit to farmers at low interest rates; cooperative credit systems that provide short term loans to farmers; and development banks and self help groups that provide microcredit and long term loans for agriculture development and small scale investors.
The document provides historical background on regional rural banks (RRBs) in India. It notes that according to a 1951-52 survey, only 7.3% of rural credit came from institutional sources like cooperatives and banks, while 92.7% came from non-institutional sources like money lenders. RRBs were established in 1975 to provide credit and other facilities specifically to small and marginal farmers, agricultural laborers, artisans and small entrepreneurs to promote development in rural areas. Currently there are 82 RRBs operating across various states in India.
This document discusses the role of microcredit in poverty alleviation. It provides an overview of microcredit programs in Pakistan, including rural support programs like the Aga Khan Rural Support Programme and microfinance institutions. It finds that microcredit helps reduce poverty by providing the poor access to credit to start small businesses, which supports economic conditions and empowerment. While the full impact in Pakistan is still being evaluated, global studies have found microcredit significantly reduces poverty for many who participate in microcredit programs.
The role of financial institution in agricultural developmemtExcellence Chuks
This document is a thesis submitted by Yvonne Onyekachi Paula Omeje to Caritas University in partial fulfillment of the requirements for a Bachelor of Science degree in Economics. The thesis examines the role of financial institutions in agricultural development in Nigeria from 1990-2010, using the Nigeria Agricultural Cooperative and Rural Development Bank as a case study. It includes an introduction outlining the background and objectives of the study, a literature review on topics related to agricultural financing, a methodology section, data presentation and analysis, and conclusions and recommendations. The overall aim is to evaluate the impact of financial institutions on Nigerian agriculture and provide suggestions to enhance the development of the agricultural sector.
Agriculture pricing policy and agriculture creditGhazanfar Abbasi
The document discusses several key topics regarding agriculture in Pakistan, including agricultural pricing policy (APP), issues in the 1950s and 1960s APP, measures taken to uplift the agriculture sector, structural adjustment programs, agriculture credit issues, arguments for and against agriculture taxation, and Pakistan's water crisis. In 3 sentences: The document outlines APP objectives and methods, issues with the 1950s-1960s policies that negatively impacted farmers, and subsequent efforts to support agriculture including subsidies, credit programs, and addressing the water crisis through irrigation improvements that were inadequate over time.
The detail classification of credit in agriculture and need of credit in agriculture to Indian farmers.
ECON-242 Agriculture finance and co-operation.
By, Miss. Raksha Anil Hingankar.
Agricultural credit is a vital input for Pakistan's economy, as the agricultural sector accounts for 25.3% of GDP. It is needed to purchase inputs, machinery, make improvements, and manage risks for farmers. The major sources of agricultural credit are non-institutional sources like money lenders and institutional sources like commercial banks and the Agricultural Development Bank. During 2013-14, banks disbursed Rs. 255.7 billion in agricultural credit, achieving 67.3% of the annual target of Rs. 380 billion. The share of credit going to the non-farm sector increased to 45.6% as banks diversified lending.
The document discusses different types of banks in India including cooperative banks, commercial banks, and regional rural banks (RRBs). It notes that cooperative banks are owned by their members and regulated by state laws as well as the Reserve Bank of India. Commercial banks include public sector banks, private banks, and foreign banks. RRBs were established to provide credit to rural areas and weaker sections of society. They are jointly owned by the central government, state government, and a sponsoring commercial bank.
The Integrated Rural Development Programme (IRDP) was the major self-employment scheme in India from 1980-1999, aiming to generate sustainable incomes for rural poor families and help them cross the poverty line. However, numerous studies found conceptual and implementation problems with IRDP, including a lack of coordination between programs, low and insufficient investment per family, and poor targeting that allowed non-poor families to participate. As a result, many IRDP beneficiaries failed to retain assets or generate enough income to escape poverty. The document discusses reforms needed to poverty alleviation programs like IRDP to make them more effective.
The document provides details on the PoP (Poorest of the Poor) Strategy being implemented by SERP (Society for Elimination of Rural Poverty) in Andhra Pradesh. Some key points:
1. The strategy aims to provide intensive support to identified PoP households over 5-10 years to help them increase their income and come out of poverty through livelihood interventions like sustainable agriculture, livestock, and wage employment.
2. PoP households will be identified in villages where NPM (Navajeevan Poorna Masthu) is being implemented, starting with 4000 villages in 2009-10. Community activists will provide close monitoring and support to 100 households each.
3. The core
The document discusses farm loan waivers in India. It provides background on agricultural issues like declining GDP share but high dependency, marginalization of land holdings, and monsoon dependence. It then summarizes the history of farm loan waivers in India since 1990, their large costs, and inclusion/exclusion errors. Critics argue waivers undermine credit culture and have adverse economic impacts. Alternatives proposed include risk mitigation measures, formalizing informal credit, and increasing investment in rural infrastructure and agriculture.
The document discusses the basics of supply chain management. It defines the supply chain as including suppliers, manufacturers, warehouses, distribution centers, and retail outlets, as well as the flow of raw materials, work-in-progress inventory, and finished products between these facilities. It also discusses supply chain management as a set of approaches to efficiently integrate these entities to minimize costs and satisfy demand requirements. Key challenges in supply chain management include uncertainty, complexity, and the bullwhip effect where demand variability increases as you move up the supply chain.
Application of Electronic Enablers for Supply Chain Management- Case Study ...Pouria Ghatrenabi
This document discusses the application of electronic enablers for supply chain management in the dairy industry. It begins with an overview of the global dairy industry and consumption trends. It then describes the upstream and downstream supply chain functions for milk, including collection from farms and processing into dairy products. It outlines key challenges for the dairy industry like seasonal fluctuations and changing consumer demands. The document discusses how radio-frequency identification (RFID) technology has been used for traceability by a large Finnish dairy cooperative. It provides an example case study of how Valio implemented RFID tagging of product carts to improve visibility and reduce errors in their supply chain.
This document discusses agriculture credit and small and medium enterprises (SMEs) in Pakistan. It provides classifications and sources of agriculture credit, as well as current credit schemes. It also outlines problems faced by farmers and SMEs, including lack of financing, skilled labor, and marketing challenges. Additionally, it compares agriculture and credit systems between Pakistan and India.
Orrissa executive summary for finance, subsidy & project related support co...Radha Krishna Sahoo
NABARD prepares Potential Linked Credit Plans (PLPs) for each district of India to enable effective utilization of credit and rural development resources. The document discusses the PLP process in Orissa and provides an overview of the state's economy, banking profile, trends in ground level credit flow, and NABARD's development assistance to the state. Key points include increasing agricultural credit disbursements, a focus on improving credit in KBK regions, and NABARD sanctioning over Rs. 2,154 crores for rural infrastructure projects in Orissa through RIDF funds.
Analysis Report on Bangladesh Krishi BankAsif Islam
Bangladesh Krishi Bank (BKB) is a specialized bank established by the Bangladeshi government to provide financing support to farmers and develop the agricultural sector. As the primary occupation in Bangladesh is agriculture, BKB aims to boost crop and fisheries production through loans for activities like cultivation, pond excavation, and livestock rearing. It also supports agro-industries and poverty alleviation programs. However, BKB faces some limitations like insufficient capital that prevents it from achieving its objectives fully. Recommendations are made to address the bank's challenges.
The document discusses various aspects of agricultural finance in India, including sources and structures of credit for farmers. It notes that non-institutional sources like money lenders were the main source of agricultural credit historically but now account for only 25% of credit, while institutional sources like commercial banks, cooperatives, and regional rural banks provide most credit. It outlines credit needs of farmers based on time period and purpose, and describes the roles of major institutions in providing agricultural finance like NABARD, commercial banks, cooperatives, and regional rural banks.
Agriculture contributes around 15% to India's GDP but employs over 50% of the population. Rural areas are home to over 70% of India's population, many of whom are poor farmers dependent on agriculture. The government prioritizes raising agricultural productivity to reduce poverty. Formal agricultural financing through banks has grown over time from money lenders to include cooperative banks, nationalized banks, regional rural banks, and now a multi-agency approach including public, private, and foreign banks. Key agricultural financing products include crop loans and Kisan Credit Cards (KCC), which consolidate short and long-term credit needs. However, many small and marginal farmers still lack adequate access to agricultural credit.
1) The document analyzes the impact of credit from the Zarai Taraqiati Bank Ltd (ZTBL) on agricultural productivity in the Kashmore district of Sindh, Pakistan.
2) It finds that loanee farmers who received credit from ZTBL had higher cultivated areas, costs of production, and gross margins than non-loanee farmers.
3) However, the impact of credit on agricultural productivity was limited due to small farmers facing constraints in accessing credit and properly utilizing loan amounts for agricultural purposes.
The document provides an overview of the North East region of India. It notes that the region is extraordinarily diverse with various ethnic groups and rich in biodiversity and natural resources like forests, hydroelectric potential, oil, gas and coal. The region produces over 10% of India's forest products and 30% of India's hydroelectric potential. It is well suited for agriculture but faces issues like poor governance, infrastructure, unemployment and utilization of resources. The handloom sector is also unorganized. The document then provides recommendations and solutions to address these issues.
Agriculture sector is playing a significant role in the
development of rural areas in our country. Agriculture is the
main occupation and still is a strong means of livelihood and
there is necessity for ensuring sustainability in these
livelihoods. Agriculture and allied sectors contribute nearly
22% of GDP of India and further 9.93% contribution in total
export of India.
Rural indebtedness, agricultural distress,
dependency on private money lenders, and farmers suicides
are common features surrounding Indian Agriculture. For
more than 100 years RBI and Central Government have been
making efforts to enhance institutional credit in rural areas
particularly to assist agricultural operations. But economic
survey (GOI) 2010 shows that out of 27 public sector banks,
only 14 sector banks achieved the agricultural credit target of
18% agricultural credit and in case of private sector banks
only 8 achieved the target of 18% for lending to agriculture
in 2009.
The document evaluates financial inclusion in India by analyzing trends such as the spatial distribution of banking services, number of deposit and credit accounts, population coverage by region, agricultural credit coverage, and coverage of farmer households by social group and land holding. It finds that while the number of bank branches has increased across regions, the rise in credit accounts per population has not been significant. Coverage of farmer households and small/marginal farmers also remains low. The study recommends increasing priority on financial inclusion policies to better cover the poor through strategic credit provision, cooperative use, procedural changes, and government/technology initiatives.
The document outlines the major institutions that provide rural credit in India, including NABARD as the apex bank for rural credit and agriculture; commercial banks that were nationalized in 1969 and 1980 to prioritize agriculture credit; regional rural banks established in 1975 to provide credit to farmers at low interest rates; cooperative credit systems that provide short term loans to farmers; and development banks and self help groups that provide microcredit and long term loans for agriculture development and small scale investors.
The document provides historical background on regional rural banks (RRBs) in India. It notes that according to a 1951-52 survey, only 7.3% of rural credit came from institutional sources like cooperatives and banks, while 92.7% came from non-institutional sources like money lenders. RRBs were established in 1975 to provide credit and other facilities specifically to small and marginal farmers, agricultural laborers, artisans and small entrepreneurs to promote development in rural areas. Currently there are 82 RRBs operating across various states in India.
This document discusses the role of microcredit in poverty alleviation. It provides an overview of microcredit programs in Pakistan, including rural support programs like the Aga Khan Rural Support Programme and microfinance institutions. It finds that microcredit helps reduce poverty by providing the poor access to credit to start small businesses, which supports economic conditions and empowerment. While the full impact in Pakistan is still being evaluated, global studies have found microcredit significantly reduces poverty for many who participate in microcredit programs.
The role of financial institution in agricultural developmemtExcellence Chuks
This document is a thesis submitted by Yvonne Onyekachi Paula Omeje to Caritas University in partial fulfillment of the requirements for a Bachelor of Science degree in Economics. The thesis examines the role of financial institutions in agricultural development in Nigeria from 1990-2010, using the Nigeria Agricultural Cooperative and Rural Development Bank as a case study. It includes an introduction outlining the background and objectives of the study, a literature review on topics related to agricultural financing, a methodology section, data presentation and analysis, and conclusions and recommendations. The overall aim is to evaluate the impact of financial institutions on Nigerian agriculture and provide suggestions to enhance the development of the agricultural sector.
Agriculture pricing policy and agriculture creditGhazanfar Abbasi
The document discusses several key topics regarding agriculture in Pakistan, including agricultural pricing policy (APP), issues in the 1950s and 1960s APP, measures taken to uplift the agriculture sector, structural adjustment programs, agriculture credit issues, arguments for and against agriculture taxation, and Pakistan's water crisis. In 3 sentences: The document outlines APP objectives and methods, issues with the 1950s-1960s policies that negatively impacted farmers, and subsequent efforts to support agriculture including subsidies, credit programs, and addressing the water crisis through irrigation improvements that were inadequate over time.
The detail classification of credit in agriculture and need of credit in agriculture to Indian farmers.
ECON-242 Agriculture finance and co-operation.
By, Miss. Raksha Anil Hingankar.
Agricultural credit is a vital input for Pakistan's economy, as the agricultural sector accounts for 25.3% of GDP. It is needed to purchase inputs, machinery, make improvements, and manage risks for farmers. The major sources of agricultural credit are non-institutional sources like money lenders and institutional sources like commercial banks and the Agricultural Development Bank. During 2013-14, banks disbursed Rs. 255.7 billion in agricultural credit, achieving 67.3% of the annual target of Rs. 380 billion. The share of credit going to the non-farm sector increased to 45.6% as banks diversified lending.
The document discusses different types of banks in India including cooperative banks, commercial banks, and regional rural banks (RRBs). It notes that cooperative banks are owned by their members and regulated by state laws as well as the Reserve Bank of India. Commercial banks include public sector banks, private banks, and foreign banks. RRBs were established to provide credit to rural areas and weaker sections of society. They are jointly owned by the central government, state government, and a sponsoring commercial bank.
The Integrated Rural Development Programme (IRDP) was the major self-employment scheme in India from 1980-1999, aiming to generate sustainable incomes for rural poor families and help them cross the poverty line. However, numerous studies found conceptual and implementation problems with IRDP, including a lack of coordination between programs, low and insufficient investment per family, and poor targeting that allowed non-poor families to participate. As a result, many IRDP beneficiaries failed to retain assets or generate enough income to escape poverty. The document discusses reforms needed to poverty alleviation programs like IRDP to make them more effective.
The document provides details on the PoP (Poorest of the Poor) Strategy being implemented by SERP (Society for Elimination of Rural Poverty) in Andhra Pradesh. Some key points:
1. The strategy aims to provide intensive support to identified PoP households over 5-10 years to help them increase their income and come out of poverty through livelihood interventions like sustainable agriculture, livestock, and wage employment.
2. PoP households will be identified in villages where NPM (Navajeevan Poorna Masthu) is being implemented, starting with 4000 villages in 2009-10. Community activists will provide close monitoring and support to 100 households each.
3. The core
The document discusses farm loan waivers in India. It provides background on agricultural issues like declining GDP share but high dependency, marginalization of land holdings, and monsoon dependence. It then summarizes the history of farm loan waivers in India since 1990, their large costs, and inclusion/exclusion errors. Critics argue waivers undermine credit culture and have adverse economic impacts. Alternatives proposed include risk mitigation measures, formalizing informal credit, and increasing investment in rural infrastructure and agriculture.
The document discusses the basics of supply chain management. It defines the supply chain as including suppliers, manufacturers, warehouses, distribution centers, and retail outlets, as well as the flow of raw materials, work-in-progress inventory, and finished products between these facilities. It also discusses supply chain management as a set of approaches to efficiently integrate these entities to minimize costs and satisfy demand requirements. Key challenges in supply chain management include uncertainty, complexity, and the bullwhip effect where demand variability increases as you move up the supply chain.
Application of Electronic Enablers for Supply Chain Management- Case Study ...Pouria Ghatrenabi
This document discusses the application of electronic enablers for supply chain management in the dairy industry. It begins with an overview of the global dairy industry and consumption trends. It then describes the upstream and downstream supply chain functions for milk, including collection from farms and processing into dairy products. It outlines key challenges for the dairy industry like seasonal fluctuations and changing consumer demands. The document discusses how radio-frequency identification (RFID) technology has been used for traceability by a large Finnish dairy cooperative. It provides an example case study of how Valio implemented RFID tagging of product carts to improve visibility and reduce errors in their supply chain.
The document discusses push and pull strategies in supply chain management. It describes push strategies as relying on production decisions based on forecasts, while pull strategies are demand-driven based on customer orders. A push-pull hybrid combines the advantages of both by using forecasts for early supply chain stages and customer demand for later stages. The bullwhip effect and benefits of postponement are also covered. Finally, factors for determining the optimal push-pull boundary based on demand uncertainty and economies of scale are presented.
The document summarizes the role, functions, products, and funding facilities of SME Bank. It outlines SME Bank's vision to become the SME hub in Malaysia by 2010, focusing on financing and growing Malaysian SMEs, especially Bumiputera companies. It provides details on SME Bank's target customers, eligible business sectors, types of financing facilities available, margins of financing, funding sources and their criteria.
Small and medium enterprises (SMEs) make up over 99% of business units in Pakistan and contribute significantly to employment, GDP, and exports. However, SMEs face numerous barriers to growth, including lack of access to finance. Most SMEs rely on self-financing rather than bank loans, which account for only 7-8% of working capital and investment. Loan disbursement is strongly correlated with firm size and age. International best practices show that countries support SMEs through credit guarantee systems, specialized SME banks, and laws promoting the SME sector.
Zarai Taraqiati Bank Ltd. (ZTBL) was established in 1961 to promote agricultural development in Pakistan. It has since become the largest agricultural bank, with over 400 branches across Pakistan. ZTBL provides farmers with loans, technical assistance, and other financial products and services. It aims to enhance rural incomes and economic growth through sustainable financing and development programs. While ZTBL has strong brand recognition and a large customer base, it faces challenges from natural disasters affecting agriculture and needs to continue improving operations through technology and staff training.
This document discusses various business models and strategies that banks use to effectively serve small and medium enterprises (SMEs). It provides examples of relationship-based strategies from Standard Chartered Bank and Wells Fargo, an advisory-based model from TEB Bank in Turkey, a segment-based model from Garanti Bank in Turkey, a niche model targeting women entrepreneurs, a supply-chain linked model from Citibank in India, and an alternative financing model using online factoring from NAFIN in Mexico. The models demonstrate different approaches to positioning, segmentation, products, and partnerships that banks employ to better meet the needs of SME customers.
This presentation includes Agriculture of Pakistan,its crops, its factors of production,seasons,regions of production,problems and solution of agriculture of Pakistan.
The document provides information about Zarai Taraqiati Bank Limited (ZTBL), which was previously known as the Agricultural Development Bank of Pakistan. It discusses ZTBL's history, mission, vision, objectives, organizational structure, products/services, and subsidiaries. Key points include that ZTBL is Pakistan's largest agricultural bank, it aims to provide financial services and technical assistance to farmers, and one of its subsidiaries is Kissan Support Services Limited which handles non-core activities like security and sports.
The document describes a project to design an automatic robot for pest controlling in agriculture. It aims to reduce the manual work and health hazards farmers face when spraying pesticides. The proposed solution is an autonomous robot that can be remotely controlled to spray pesticides on crops. It is expected to minimize the workload on farmers and reduce the risks of breathing problems associated with pesticide spraying. The robot would use sensors, motors and a remote control system to spray liquids at a distance across fields and varied surfaces.
Technology helps in allieviating the concerns of a distribution manager. One of the key concerns of the distribution manager includes the fate of a consignment after it has left the base. Some of the prominent technologies that can be used in logistics include Global Positioning System (GPS), Swipe Cards, Bar Codes, Radio Frequency Identification. Of these technologies RFID holds a great potential in transforming logistics management for Indian corporate.
Top technology trends in supply chain & logistics industryArindam Bakshi
Technology plays a very important part in determining the success of a supply chain. This e-book is primarily meant to inform you about the present day technologies that are heavily involved in determining the efficiency and productivity of the logistics and supply chain industry.
The document discusses e-agribusiness, which refers to conducting agricultural business transactions electronically over the internet. E-agribusiness can help farmers access information on commodity prices, cultivation practices, and find buyers for their produce online. It allows for organized trading between dispersed buyers and sellers. While e-agribusiness has potential benefits, its adoption in India still faces challenges like computer illiteracy, internet connectivity issues, and electricity outages. The document advocates that India's agricultural industry needs to embrace e-agribusiness to tap into its opportunities.
The document discusses supply chain management. It defines supply chain management as the integration of business processes from original suppliers to end users to add value for customers. A supply chain is a network of facilities that procures materials, transforms them into products, and distributes the products to customers. The essential features of supply chain management include integrated behavior across stakeholders, mutually sharing information and risks/rewards, cooperation, focusing on serving customers, integrating processes, and building long-term relationships. The objectives, components, factors influencing, and functions of supply chain management at the strategic, tactical, and operational levels are described.
The document discusses supply chain management (SCM). It defines SCM as the management of relationships between suppliers, manufacturers, warehouses, distribution centers, and customers to deliver value to customers at a low cost. The goal of SCM is to optimize efficiency through integrating these entities. The document also describes how SCM has evolved from a "push" model driven by forecasts to a "pull" model driven by actual customer demand.
This document discusses logistics management strategies and their formulation and implementation. It covers linking a firm's strategy to its logistics strategy, setting logistics goals and making decisions, analyzing logistics networks, formulating logistics strategies including different channel strategies, and implementing and measuring performance of logistics strategies. Key aspects covered include aligning business and logistics strategies, common logistics challenges, and key performance indicators for evaluating service and inventory management.
1. A supply chain involves all parties involved in fulfilling a customer request, including suppliers, manufacturers, distributors, and retailers. Materials and products flow between these entities.
2. Supply chain management (SCM) aims to efficiently integrate these entities so that the right products are delivered to the right place at the right time while minimizing costs.
3. Uncertainty is inherent in supply chains and can cause fluctuations in inventory levels and backorders, even if customer demand remains steady. SCM strategies aim to reduce this uncertainty and its negative effects.
The document discusses supply chain and logistics concepts including:
1) Physical distribution involves choosing warehouses and transportation carriers to deliver goods in the desired time at lowest cost. Physical distribution has expanded into supply chain management.
2) Supply chain management involves procuring inputs, efficiently converting them into finished products, and dispatching them to customers.
3) Market logistics planning involves four stages - deciding on a value proposition, developing operational excellence, implementing solutions, and deciding on a channel/network strategy.
A supply chain is the network of organizations involved in producing and delivering a product, from raw materials to the end customer. It includes upstream suppliers, internal production and packaging, and downstream distribution centers and retailers. Effective supply chain management coordinates activities across this network to optimize material, information and financial flows. Key goals are reducing costs and uncertainties while improving customer service. Modern supply chains leverage information technology to facilitate coordination and information sharing among partners.
The document discusses the role of banks in providing agricultural credit in India. It notes that while India's economy has grown rapidly, its dependence on agricultural performance remains high. Access to banking services in rural and agricultural areas remains limited. The document then outlines various agricultural credit schemes provided by banks in India, including short term crop loans, term loans, and the Kisan Credit Card scheme. It also discusses the challenges in expanding rural and agricultural credit like lack of infrastructure and focus on urban sectors.
This document provides a historical overview of microfinance initiatives in India since independence. It discusses early committees and surveys that examined rural credit needs and access. Major initiatives are described, including self-help groups, programs through NABARD and SIDBI, and the SHG-Bank linkage model. The document also outlines the current status and infrastructure of microfinance provision in India, noting that while access to formal credit has increased, the majority of marginal farmers and landless laborers still rely on informal sources. Overall it traces the evolution of microfinance policy and models in India over several decades.
Effective Utilization of Banking Credit: A bird’s eye viewRHIMRJ Journal
India is an agricultural country and it plays a significant role in the development of our economy. Approximately two
third of the Indian Population is depend on agriculture sector. According to the data released by National Sample Survey
(NSS) reflects that about 65 to 70 per cent of all agricultural holdings belonged to the smaller size groups of families. These
small and marginal farmers required credit facility. Agricultural credit appears to be an essential input to take the advantage
of modern technology in agriculture sector for enhancing productivity. That is the reason credit has been taking a crucial role
in designing strategies for the development of agriculture. This paper put emphasis on proper planning for effective utilization
of credit facilities.
Rural development is focused on developing rural areas that are lagging in overall development. It includes improving literacy, education, health, infrastructure like roads and electricity, land reforms, poverty alleviation, and increasing productivity and income opportunities through agriculture, non-farm activities, and access to markets and credit. While India's banking system has expanded rural credit access, many farmers still rely on moneylenders due to inadequate and unsustainable credit from formal institutions. Self-help groups aim to address this by promoting thrift and providing loans at reasonable rates to members. However, issues remain around loan repayment and ensuring credit is used productively.
The document evaluates financial inclusion in India by analyzing metrics like the spatial distribution of banking services, number of deposit and credit accounts, population coverage by region, agricultural credit coverage, and coverage of farmer households by social group and land holding. It finds that while the number of bank branches has increased across India, the rise in credit accounts per population has not been significant. Coverage of small and marginal farmers also remains low, though the proportion of non-indebted households is highest among marginal farmers. The study recommends expanding access to banking services for the poor through cooperation between banks, government, and other institutions.
Agricultural credit is an important input for agricultural development programs in India. It is needed to purchase seeds, fertilizers, equipment and manage risks. However, small and marginal farmers often do not receive enough institutional credit. Some reasons for this are loose definitions that allow large companies access to subsidized loans, and non-compliance by banks with targets for lending to small farmers. Reforms are needed to streamline the system and better facilitate credit to small farmers through organizations and technology.
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
The farmers development in credit structure vis à-vis indianfirosfebinf
This document discusses the credit structure for farmers and the Indian economy. It outlines several formal and informal sources of rural credit, including self-help groups, National Bank for Agriculture and Rural Development (NABARD), and microfinance institutions. NABARD was established to regulate cooperative banks and regional rural banks to increase credit flow to rural areas. While self-help groups are village-based organizations that provide small loans to members, microfinance institutions give loans to small businesses and entrepreneurs lacking access to traditional banks. The document concludes with suggestions to increase credit availability and reduce risks such as contract farming and involving NGOs to organize loan disbursement.
1) The document discusses the history and sources of agricultural financing in India. It notes that historically farmers relied on moneylenders but financing expanded with the establishment of cooperative banks and nationalization of commercial banks in the 20th century.
2) Today agricultural financing comes from multiple sources including cooperative societies, commercial banks, land development banks, regional rural banks, and government loan schemes. NABARD also plays a key role in refinancing agricultural loans.
3) The document analyzes the productive and unproductive needs for agricultural financing, as well as the short, medium, and long term loan needs of farmers. Overall it provides an overview of the development and current state of agricultural financing systems in India.
This document provides information about Development Finance Institutions (DFIs) in Pakistan and focuses on two specific DFIs - Zarai Taraqiati Bank Limited (ZTBL) and House Building Finance Company (HBFC). It outlines the roles and functions of DFIs, describes some challenges faced by DFIs in Pakistan, and then provides detailed information about the services, deposit schemes, loan schemes and operations of ZTBL.
The document summarizes priority sector lending in India. It defines priority sectors as areas of the economy that are prioritized for funding by the government and central bank. Banks are directed to provide loans to these sectors at reduced interest rates to promote their development. The priority sectors include agriculture, small businesses, education and housing. The document outlines the sectors and challenges they face, as well as the role of priority sector lending in addressing issues like unemployment and poverty. It discusses targets for priority sector lending and how the Reserve Bank of India monitors compliance.
1. The document discusses the role of Regional Rural Banks (RRBs) in providing credit to rural areas in India, specifically Jammu and Kashmir. RRBs were established to fulfill credit needs that commercial banks and cooperatives were not addressing.
2. It provides background on the rural credit system in India and need for institutional credit among farmers. RRBs aim to provide financial assistance to small and marginal farmers.
3. The document examines the progress of three RRBs operating in Jammu and Kashmir - Jammu Rural Bank, Kamraj Rural Bank, and Ellaquai Dehati Bank. It explores trends in RRB development and constraints they face like non-performing assets.
NABARD is India's apex development bank that focuses on rural development. It provides refinancing support and develops rural infrastructure to promote agriculture and rural development. NABARD also regulates cooperative banks and rural banks. It works to expand financial inclusion through programs like self-help groups and credit cards for farmers. While NABARD has significantly contributed to rural development, it faces challenges in adequately financing some regions and maintaining its link to the central bank.
Agricultural credit from institutional sources such as cooperative societies, commercial banks, and regional rural banks has become increasingly important in India to provide affordable credit to farmers and curtail exploitative moneylenders. Farmers use credit for inputs, supporting their families, land acquisition, improvements, machinery, and irrigation. The major institutional agencies that provide agricultural credit are cooperative credit societies at the primary, central and state levels, commercial banks, land development banks, regional rural banks, and the National Bank for Agriculture and Rural Development, which was established to plan and guide agricultural credit efforts.
Banking played a vital role in India's development by financing large industries and promoting investment. Nationalization of banks in 1969 defined India's banking system by expanding reach and increasing savings mobilization and access. Studies show that rural branch expansion from 1970-1990 significantly reduced poverty and increased non-farm output. However, reforms in the 1990s led banks to prioritize large borrowers over small farmers and businesses, reducing credit to rural areas and priority sectors like agriculture.
The document summarizes the origins and functions of the National Bank for Agriculture and Rural Development (NABARD) in India. It was established in 1982 to provide credit and other support services to promote rural and agricultural development. Key points include that NABARD provides refinancing to rural banks, coordinates rural development programs, and promotes initiatives like microfinance and support for farmers through training centers.
Relationship of agricultural credit with agricultural growth and economic dev...RashidLatief3
The document analyzes the relationship between agricultural credit and regional agricultural growth and economic development in Jiangsu Province, China using data from 51 rural commercial banks from 2012-2016. Regression models show that overall agricultural loans and loans to farmers have a positive significant impact on regional agricultural growth. Loans to rural organizations also have a positive significant impact. Additional models find agricultural loans positively impact regional economic development as well.
Impact of Credit on Agricultural Producitivity:A Case Study of Zarai Taraqiat...sanaullah noonari
Agricultural sector is the largest contribution to Pakistan’s GDP. Agricultural credit plays an important role in
enhancing the agricultural productivity in developing countries like Pakistan. The government of Pakistan
introduced several agricultural credit loans through ZTBL and other commercial banks and institutional sources.
This study estimated constrains faced by the farmers in acquisitioned source. This study also estimated the
impact of credit on agricultural productivity. Data were collected randomly from 30 loanee farmers to three
selected ZTBL branches and 30 non loanee farmers in the same villages. It found that the credit has a positive
impact on the agricultural productivity and loanee farmers have more gross margins than non loanee farmers.
Now the problem is to remove the constraints which small farmers are facing in this regard and then improve the
utilization of the credit amount as planned at the time of disbursement in agriculture production process
following findings were found. A major proportion i.e.40.8% of the farmers belonged to young age group (36-45
years). It was found that majority of the respondents had low level of education in the selected area. More than
51.7% of the respondents had 6-10 acres of the land holding. A huge majority 95% of the respondents had
knowledge about the agricultural credit scheme of the ZTBL Bank. More than 56.75 of the loanees’ farmers
avail credit facilities for the first time from the ZTBL bank. A large majority 63.3 of the farmers were not
satisfied with the interest rate charged by the banks. It was found that a large number of farmers mutualized the
credit amount. About 66.7% farmers got agricultural credit facility from bank without facing any problem.
Result indicates that average cultivated area in case of loanee farmers is higher than non-loanee farmers. It was
conclude that the loanee farmers had more cost of production as compare to non loanee farmers. Results of
regression analysis indicate that credit had very normal impact on agricultural productivity as limiting factors is
the proper utilization of loan mount in agricultural sector. The most common utilization of credit amount as
construction, repair and renovation of the houses by the loanee farmers.
The document discusses rural banking in India, including its objectives of poverty alleviation and financial intermediation. It outlines the limited banking presence pre-independence, nationalization of banks post-independence, and the rural branch expansion program of the 1970s. The establishment of NABARD to provide credit facilities to farmers is also mentioned. Challenges in rural markets include a lack of adequate financial markets and infrastructure, though opportunities exist in agribusiness and untapped markets. Marketing strategies proposed include developmental marketing, customized products and delivery models, and partnerships with cooperatives and NGOs.
140301050136 igidr poor financial inclusion in rural areas of chhattisgarhgudu123
Poor financial inclusion persists in rural areas of Chhattisgarh, India despite government efforts over decades. While nationalized banks and microfinance programs have expanded access, the majority of rural poor still rely on expensive informal lenders due to a lack of suitable financial products and physical access to banks. Barriers to inclusion include irregular incomes, lack of collateral for loans, and remoteness of many villages. Improving access will require new products tailored to the needs and cash flows of rural households as well as expanding infrastructure and outreach of formal institutions.
A Free 200-Page eBook ~ Brain and Mind Exercise.pptxOH TEIK BIN
(A Free eBook comprising 3 Sets of Presentation of a selection of Puzzles, Brain Teasers and Thinking Problems to exercise both the mind and the Right and Left Brain. To help keep the mind and brain fit and healthy. Good for both the young and old alike.
Answers are given for all the puzzles and problems.)
With Metta,
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The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
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A Visual Guide to 1 Samuel | A Tale of Two HeartsSteve Thomason
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The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
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2. Rural Financial Markets and
Agricultural Credit
Presented by:
Zain ul Arfeen Khan
Ubaid Farooq
3. Difference between Rural
and
Urban Area?
Open swath of land that has few homes or
other buildings (Rural Area)
Mostly people are associated with agriculture
and livestock
An area surrounding a city. People mostly
associated with non-agricultural work(Urban)
High population density
4. What is Rural Finance?
Comprises of full range financial services loans,
savings, insurance used in rural area by household
and enterprises.
What is Agricultural Finance?
Refers to financial services ranging from short,
medium and long-term loans to crop and livestock
insurance, covering the entire agricultural value
chain, input supply, production, distribution, whole-selling,
processing and marketing.
5. Old Paradigm vs. New Paradigm
Under the old paradigm(1960-1980), lending quota was fixed for
DFIs, schemes were refinanced and targeted lending was done by
lending institutions. But it failed to achieve desired objectives
because it was costly and failed to reach majority of the agricultural
HHs.
Subsidized interest rated didn’t cover the cost
The focus on lending to agriculture sector, for farming purposes
only
Huge build up of non-performing loans
Borrowers defaulted
Financial discipline was damaged and intermediaries weakened.
Several development finance institutions became insolvent and
were closed or had to be reorganized.
6. • Under the new paradigm(1980 and onwards),
unbanked poor were targeted.
• Focused on integrated markets
• Promotion of asset creation
• Enabling policies made by the Government.
7. Why Rural Finance?
• Rural financing is important in in any of the
agrarian economy. People in rural areas are
generally deprived of capital needed take care
of their precious crops. So Rural Finance is
needed to give farmers relief in terms of cash
without giving them extra burden.
8. Challenges in Rural Financing and
Agricultural Credit?
Provision of credit for farming activities is seen
as the primary objective of institutional credit
policy. The host of non-farm activities such as
trade, processing, storage, transportation and
provision of other support services are
neglected.
The ability of the financial sector to mobilize
rural resources and provide financial
intermediation is generally ignored.
9. The rural sector is largely/generally un banked
all over the world. Issues of relative
profitability, information constraints,
transaction costs, inadequate collateral etc.
are well known.
Politically driven.
10. Pakistan's Economic Survey
• The economy of Pakistan during the last five years grew on
average at the rate of 2.9 percent per annum.
• GDP $232 billion(2013).
GDP growth 3.7% (2012), GDP per capita $2,900
• Population : 183 million approx.
• GDP contribution by sector, agriculture: 21.4%, industry:
20.9%, services: 57.7%.
• Inflation (CPI) 9.6% (Jan 2013)
• Labor force: 45.1% Agriculture, 34.2 % services and 20.7%
Industry.
11. Agriculture Survey
• Agriculture sector consists of sub-sectors which include crops,
livestock, fisheries, and forestry. The crop sub-sector is further
divided into important crops, other crops and cotton and
ginning.
• The agriculture growth this year stood at 3.3 percent as
compared to 3.5 percent during the last year. The Livestock
sector which has a 55.4 percent share in the agriculture grew
by 3.7 percent in 2012-13. The Fishing sector having a share of
2.0 percent in agriculture grew by 0.7 percent as against last
year’s positive growth of 3.8 percent. Forestry sector having a
share of 2.0 percent in agriculture posted a nominal growth of
0.1 percent this year as compared to positive growth of 1.7
percent last year.
12. Agriculture Survey
• Agriculture credit disbursement of Rs. 231.0
billion during July-March 2012-13 is increased by
17.0 percent, as compared to Rs. 197.4 billion
over the same period last year. Out of which Rs.
123.7 billion is disbursed by Commercial Banks,
Rs. 38.0 billion by Zarai Taraqiati Bank Limited
(ZTBL), Rs. 51.0 billion by Domestic Private Banks,
Rs. 13.0 billion by Microfinance Banks (MFBs) and
Rs. 5.4 billion by Punjab Provincial Cooperative
Bank Limited (PPCBL).
13. Rural Financial Institutions in Pakistan
History
• In Pakistan, agriculture credit market consists of formal and
informal providers of credit. Formal lenders are: specialized banks
like Zarai Taraqiati Bank Ltd. (ZTBL) and Punjab Provincial
Cooperative Bank Ltd. (PPCBL) and commercial banks, while the
later comprises of illegal money lenders, friends and relatives,
village shopkeepers and commission agents etc. the predominant
share of credit is provided by the informal sources of credit in the
country.
• In order to overcome this inadequacy, two specialized institutions
i.e. Agricultural Development Finance Corporation and the
Agricultural Bank were establish in 1950s. Subsequently these
institutions were merged to form the Agriculture Development
Bank of Pakistan (ADBP) in 1961 (now called ZTBL).
14. Rural Financial Institutions in Pakistan
History
• 1972, SBP started assigning mandatory agricultural credit targets to
five big banks viz ABL, HBL, MCB, NBP and UBL with provision for
penalizing institutions that do not meet the targets.
• In 1976, with enactment of Co-operative Banking Ordinance, the
“Federal Bank for Cooperatives” (FBC) was established to finance
provincial cooperative banks for further lending to cooperative
societies. Subsequently, provincial cooperative banks were
amalgamated to provide agricultural credit at gross root level and to
encourage the cooperative societies ‘structure in the country.
However, the system did not achieve its goals due to default of the
provincial cooperative banks and a number of fake cooperative
societies.
• Resultantly, FBC was liquidated in 2001 followed by liquidation of
provincial cooperative banks’ except PPCBL. After liquation of FBC,
financing to PPCBL was diverted to SBP under the guarantee of
Punjab Government.
15. Agriculture in Pakistan
• About 68% of the population is engaged in farming directly or
indirectly through production, processing and distribution of major
agricultural commodities.
• About 68 percent people living in rural areas and employs about 45
percent of the total national labor force.
• Major contributor in the overall export earnings of Pakistan. The
share of Food Group alone in the total export of Pakistan for the
year 2010-11 stood at 17.5 percent.
• Agriculture is equally important for industrial development. Out of
about 5000 industrial establishments in Pakistan, about 60 percent
are agro-based.
• The agriculture provides raw material for domestic industries like
rugs and carpets, sugar, leather, foot ware and food products etc.
16. Problems in Agri/Rural Financing
• The sharp increase in agri. credit disbursement, banks are meeting
only around 45-50% of the agri. credit requirements and the
number of borrowers are around 2 million out of 6.6 million
farmers in the country.
• Banks do not seem keen on accepting agri. finance as a viable
business due to intrinsic risks and weird nature of agriculture, non-viability
of farmers, non availability of collateral with most of the
farmers, subsidized credit, frequent announcement of write-offs &
waivers by the Government etc.
• No automation of land record and the existing manual system of
revenue authorities.
• The ratio of non-performing agri. loans is terribly high due to the
culture of write-offs/ waivers. In case of defaults, the sale of agri.
land for realization of banks’ outstanding loans almost become
impossible for banks.
17. Problems in Agri/Rural Financing
• Risks on account of natural hazards, unreliable infrastructure, poor pricing
policies, insufficient & improper marketing mechanism, low quality of
seed, low yield per acre and lack of coordination among government
agencies which dampen down banks’ interest in expansion of credit to the
farming community.
• Political Interference
18. Government’s Role
Initiatives
The major initiatives taken during last 7-8 years are briefly described as under:
• Inducted 14 Domestic Private Banks into Agri Credit Scheme apart from 7 Banks (5
Major & 2 Specialized)
• Introduced three years revolving credit scheme, with one time documentation and
automatic renewal on annual cleanup of principal plus mark-up for production loans to
farmers.
• Strategy in place to Expand Agri Finance to 3.3 Million Borrowers from the Existing 2
Million Borrowers, to Meet 75% of the Credit Needs (from Existing 45%) in next 3-4
years.
• To mitigate the risk of losses to farmers due to natural calamities and risk of
nonpayment to banks in such cases, Crop Loan Insurance Scheme (CLIS) has been
introduced from Rabi Crop 2008-09. This scheme will not only safeguard the interests of
banks and farmers, but it will also save huge amount of funds spent by the Government
of Pakistan in the shape of frequent write-offs / waivers of agri. loans of ZTBL’s
borrowers.
19. Government’s Role
Initiatives
• Compiled and released district wise data of agri. credit for the first time to
facilitate the policy makers.
• For effective implementation of SBP’s initiatives, a separate Development Finance
Support Department (DFSD) and its subsequent units were established at SBP BSC
Offices. These units would focus on developing a network in collaboration with
local banks and farming community.
• In order to increase the rural branch net-work, SBP has made it mandatory for
banks to open at least 20% rural branches while opening their new ones.
• To reduce operational / administrative costs of agri/ rural financing and increasing
outreach of financial services to rural community, SBP has allowed banks to adopt
concepts of branch-less banking and open sub branches, special booths and
service centers in remote areas.
• Special Training and Awareness Programs underway for farmers and bankers.
20. Government’s Role
Impacts
• Credit disbursements to Rs. 212 billion in FY08 from Rs. 39 billion in FY01. The
target for FY09 has been fixed at Rs. 250 Billion.
• The number of borrowers has also increased to 2 million from 1.3 million.
• With the induction of 14 domestic private banks into the agricultural credit
scheme in 2002 and the removal of mandatory credit targets for five big banks, viz.
Allied Bank Ltd, Habib Bank Ltd, MCB Bank Ltd, National Bank of Pakistan, United
Bank Ltd, from 2005, the share of commercial banks has shown significant rise in
the overall agri. Credit disbursement.
• The share of specialized banks, viz. ZTBL & PPCBL in agri. credit has declined from
73% in FY01 to 38% in FY07.
21. Recommendations (Best Practice
Internationally)
Bank Rakyat Indonesia
• BRI is one of the largest commercial banks in Indonesia, and the most
profitable and efficient bank. Its repayment rate has been over 99%.
Nonperforming loans level is less than 6%, while for microcredit, it is less
than 3 %.
• BRI is divided into four Strategic Business Units: Micro Banking, Retail
Banking, Corporate Banking and Investment Banking.
• BRI has only one micro-loan product, KUPEDES, designed for working
capital or investment purposes. Carefully selected, the borrowers are
given loans whose amount depends on the borrower's current income
flow and always require some form of collateral. The minimum amount is
Rp.25,000 (US$3), and the maximum is Rp.50,000,000 (US$5,000). The
minimum loan term period is one month and the maximum is 24 months
for working capital loans or 36 months for investment loans. Loans can be
repaid in monthly, quarterly or bi-annually installments. The interest rate
increases by 0.5% if the repayment is not made on time. The repayment
rate is very high: 98.34%.
22. Recommendations (Best Practice
Internationally)
Distinctive Features
• Effective Management
• Incentive for repayment
• Savings Mobilization
• Sustainability & Profitability
• Poverty Focus
• Autonomy of Village Bank System
• Operations Standards
• Wide Network
• Full Range of Financial Services in Rural Areas
23. Measures can be taken to Solve Problems
• Supply of Agriculture Credit
• Water Logging and Salinity Control
• Construction of Dames
• Provision of HYV Seed
• Mechanization Farm
• Agricultural Research
• Agro-based Industries
• Tax Concessions
• Training of Farmers
• Prices of Agricultural Productivities
24. Conclusion
Some lessons can be drawn which will perhaps work as useful
input in future policies undertaken by banks and other
financial institutions. These are;
• A decentralized structure enables broad client coverage.
• Qualified, well trained and highly motivated field staff has a positive
impact on the lending productivity.
• Simplified loan appraisal procedures reduce the time required for
loan processing, loan approval and loan disbursements. Effective
management information systems provide crucial information.
• Diversification of the rural loan portfolio in terms of location and
lending purposes helps to balance the un even staff work load due
to the seasonality in agricultural lending.
25. Conclusion
• Agricultural lending should start in production zones that present
low risks; operations can then gradually be expanded to more risky
areas.
• Managing of external risks through loan rescheduling, agricultural
insurance and emergency assistance can assist both the farmer-borrower
and the agricultural lender.
• Agricultural lending institutions should be free of political
interference in their daily management.
• New information technologies provide significant scope for the
adoption of innovations in bank automation, electronic data
processing and development of new agricultural loan products.