Demand for credit might dip in Coimbatore

Canara Bank general manager U. Ramesh Kumar said that Coimbatore district had crossed the credit target in most of the Government schemes so far in 2013-14.

Collector Archana Patnaik releasing the Annual Credit Plan for 2014-15 at the Coimbatore Collectorate on Thursday. Photo:M.Periasamy.

The impact of the slowdown on the economic activities in Coimbatore district during the last few months is likely to soften slightly the demand for credit next year.

According to the Annual Credit Plan for the district that was released here on Thursday by District Collector Archana Patnaik, lending to various sectors in 2014-15 is expected to be Rs. 10,226 crore and it is 21.26 per cent more than the credit outlay proposed for the current year (2013-14).

This is against the projection of 25 per cent higher lending (Rs.8,433 crore) in the plan for 2013-14, over the previous financial year (Rs. 6,707 crore).

District Lead Manager K. Krishnamoorthi told

The Hindu that the demand for loans was slightly higher in the current financial year. Further, the plan for the next financial year was prepared based on the potential-linked credit plan of the National Bank for Agriculture and Rural Development (NABARD) and the NABARD had conducted a study.

Target

Canara Bank general manager U. Ramesh Kumar said that Coimbatore district had crossed the credit target in most of the Government schemes so far in 2013-14.

For instance, the credit target till December for agriculture and allied activities this year is Rs. 2,687 crore and Rs. 2,750 crore has been disbursed so far. For the MSMEs, it is Rs. 2,566 crore and the amount given is Rs. 2,600 crore.

The plan outlay for 2014-15 for agricultural and allied activities is Rs. 4,336 crore and it is 21 per cent higher than the outlay for the sector for 2013-14.

For the non-farm sector (MSMEs), it is Rs. 4,168 crore, which is 23 per cent higher than the proposed lending to the sector this year. The credit to be given in other priority sectors (education loan, housing loan, etc) is envisaged to be Rs. 1,722 crore.

In the agricultural sector, the focus is on horticultural crops such as cut flowers, agricultural infrastructure, farm mechanisation, minor irrigation activities and food processing.

In the case of MSMEs, the district has a large number of small and medium-scale enterprises and hence, the outlay has been increased. Apart from new enterprises, banks continue to lend to the existing units for expansion.

Details of the Annual Credit Plan would be released in June, Mr. Krishnamoorthi said.