8/9/2019 Developing Rural Financial Sysytem

1/13

DEVELOPING

RURAL FINANCIAL

SYSTEM

PRESENTED BY

PARAG WAGHODE

8/9/2019 Developing Rural Financial Sysytem

2/13

Back Ground

Rural Finance is about providing financial

services for people living in rural areas.

It comprises credit, savings and insurance inrural areas

60% of the countrys population represents rural

sector Main occupation agriculture and allied business

8/9/2019 Developing Rural Financial Sysytem

3/13

Importance of Developing Rural

Finance:

Agriculture represents much more to India than a

mere slice of economic pie

Agriculture in India occupies a prime position in

terms of its contribution to GDP

60% of the countrys population represents rural

sector

People in the rural areas have no money and

often tend to go for high-cost borrowings

8/9/2019 Developing Rural Financial Sysytem

4/13

Share of agriculture in GDP falling

continuously

8/9/2019 Developing Rural Financial Sysytem

5/13

Rural Finance

It includes:

Agriculture Finance: financing agriculture-related activities, such as input supply,

production, distribution and wholesaling, and

marketing.

Microfinance: Financial services (savings,

credit, payment transfers, insurance) for the poor

and low-income people.

8/9/2019 Developing Rural Financial Sysytem

6/13

Rural finance comes in three

major forms

SemiFormal

Formal

Informal

8/9/2019 Developing Rural Financial Sysytem

7/13

NABARD

pioneer in microfinance programs in India

Providing refinance to lending institutions in rural

areas,

Bringing about or promoting institutional

development,

Evaluating, monitoring and inspecting the client

banks

Policies, planning and operations in the field of credit

for agriculture

8/9/2019 Developing Rural Financial Sysytem

8/13

Department of Rural Development

Department under the Ministry of Rural

Development

Provide of several services and programs few are:

Rashtriya Krishi Vikas Yojana

Pradhan Mantri Gram Sadak Yojana

IndiraAwaas Yojana (Rural Housing)

Kisan Credit Card Scheme

8/9/2019 Developing Rural Financial Sysytem

9/13

Are the Financial Services/

Programmes are effective enough? Finance is still biggest problem for

development of rural economy despite it being

innovative.

NABARD doesnt undertake direct financing.

SIDBIs lengthy and stringent procedures inhibit

the poor.

RRB is suffering immensely from lack of skills,

incentives and infrastructure support.

The services not reaching needy - Debt

Waiver and Debt Relief Scheme

8/9/2019 Developing Rural Financial Sysytem

10/13

Sectoral Share of Rural GDP

8/9/2019 Developing Rural Financial Sysytem

11/13

Conclusion

Rural sector is one of the pillars to overall economic

development.

Most of the rural development programmes undertaken thusfar have lacked focus and seem to be misdirected

The crisis of Indias farmers has the potential to derail thecountrys exceptional economic growth

Despite governments efforts over last 62 years, ruraldevelopment in India has not as it was envisaged.

Urgent need for shift in the overall strategy for rural

development.

8/9/2019 Developing Rural Financial Sysytem

12/13

REFERENCES

References:

Budget speech of Former Finance Minister P Chidambaram's

Budget 2008-09

Interim Budget 2009-10

The Economics

Times

Economic Survey 2003

Yale Global publication

Websites:

www.ruralfinance.orgwww.ifad.org/ruralfinance

www.nabard.org

www.sidbi.com

www.rural.nic.in

8/9/2019 Developing Rural Financial Sysytem

13/13

THANK YOU