West Bengal banks providing loans to SHGs

KOLKATA: Banks operating in West Bengal have provided a fresh loan of Rs 175.5 crore to local self help groups (SHG), taking the total outstanding SHG loan to Rs 726 crore till February 2009. Yet, on an average basis, banks offered merely Rs 26,286 per group as loan, which is significantly lower than the national average of Rs 65,000 a group. Banks’ average lending to SHGs in the state have grown by a modest Rs 2,000 from last year.

National Bank of Agriculture & Rural Development chief general manager P. Mohanaiah attributed this smaller size of loans largely to banks’ indifference to SHG development in the state. "In states like Andhra Pradesh, banks’ average lending to SHG is around Rs 1 lakh." Under Nabard’s SHG-bank linkage programme, nearly 60,000 groups have been formed in West Bengal during 2008-09. This is, however, a provisional data. Banks are yet to furnish the latest annual data to Nabard. Of these new groups, nearly 47,600 received financing support from banks. Cumulatively, a whopping 4.13 lakh groups exist in the state and 2.76 lakh groups received bank credit. "In 2009-10, we intend to focus more on micro-financing activities. This area needs renewed focus as the momentum seems to be losing steam,"

Mr Mohanaiah said here on Thursday as he announced Nabard’s future annual plan for the state. According to the executive, focus would also be given in creating 1,000 new farmers’ clubs which act as catalysts between banks and villagers. In 2008-09, 351 such clubs has been formed taking the total tally to 2,081. During the period under review, Nabard’s refinanced investment credit for agri development, worth Rs 522 crore, surpassed its annual target of Rs 485 crore. It disbursed production credit of around Rs 350 crore.

Mr Mohanaiah informed that West Bengal is expected to get Rs 1,500 crore of financial assistance under the Centre’s Rural Infrastructure Development Fund (RIDF) in 2009-01, if the Centre okays the state’s proposal to include rural electrification projects under the ambit of RIDF. The state has sought loans worth Rs 300 crore for rural electrification. In 2008-09, Nabard sanctioned projects worth Rs 801 crore under RIDF, surpassing the normative allocation of Rs 761 crore. ends