At a time when a large number of debt-burdened farmers are committing suicide in the State, institutional loan arrangement is yet to be streamlined.
Despite the fact that there is huge scope for financing small and marginal farmers, who form self-help groups, banks and financial institutions have been consistently showing reluctance to provide loan to them.
As a result, farmers are forced to seek loan from private money lenders in the State. In most places, money lenders are charging monthly interest at 10 per cent of total loan amount.
In Odisha, more than 40 farmers have allegedly committed suicide during past two months. Invariably in most of the cases, family members blamed high debt burden for suicides.
“Under National Bank for Agriculture and Rural Development programme, Joint Liability Groups (JLGs) are being promoted. JLGs comprise of five or more small, marginal farmers, oral lessees and tenant farmers engaged in farming or non-farming activities who are provided loan from nationalised and commercial banks,” said J. B. Mohanty, Chairman of Favourable Organisation for Rural Welfare and Regional Development (FORWARD), a Balasore-based NGO.
Mr. Mohanty said: “We have been assigned to form JLGs and facilitate credit linkage to them. But we observe that bank authorities are often hesitant to provide loans to JLGs. As a result, the objective behind forming JLGs gets defeated.”
As against the target of 40,000, only 5,862 JLGs have been credit-linked as on September 30, 2014. NABARD study says lower per capita credit for SHGs, average credit for SHG being Rs.1,16,787 in the State as against national average of Rs.1,75,822 and inadequate and inconsistency in making bank loan available have been helping money lenders to thrive.
From 13 per cent in the year 2004-05, agriculture credit as a percentage of State agriculture production has increased to 26 per cent in the year 2013-14. “In spite of such an increase in credit for the agriculture sector, the credit off-take from institutional sources is much less in the State as compared to national average or that in several neighbouring States,” NABARD says.
Compared to neighbouring States, Odisha has the lowest average amount of loan per account by scheduled commercial banks. As many as 57,627 farmers had taken average loan of Rs.43,443 from different banks. In Bihar, 72,915 farmers have taken loan from banks while in West Bengal and Chhattisgarh 74,925 and 1,13,317 farmers respectively have secured loan from scheduled banks.
Agricultural credit flow during 2013-14 was Rs.12,581.65 crore as against Rs.10,45.15 crore during previous year, thereby recording growth of 20 per cent. However, total ground level credit flow during priority sector registered a decline of around 4 per cent and it was Rs.20,955.75 crore during 2013-14 as against Rs.21,910.93 crore during 2012-13.
Compared to neighbouring States, Odisha has the lowest average amount of loan per account by scheduled commercial banks
