Over 60% farmers have no access to bank loans: CM Devendra Fadnavis

Saying that the government’s policy reforms to restructure loans had helped bring 7 lakh farmers in the credit net, Fadnavis, speaking at the annual kharif meeting here, said, “I must admit the numbers should be at least three times more in the coming years.”

The government has already cut interest rate on loans from 12 per cent to 6 per cent coupled with extending the repayment period from three to five years. Moreover, farmers don’t have to pay interest in the first year for which the government stood as the guarantor.

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At the meeting, Fadnavis expressed concern over 60 per cent farmers failing to avail the institutional credit loans.

The biggest challenge for the government and financial institutions is to reach out to these farmers who have no access to bank loans. As a result, they are forced to depend on money lenders, who further push them into the debt trap.

“The RBI’s concern that banks cannot be coerced into giving loans is understandable. …banks are bound to be governed by norms of loan recovery. Yet, I believe national and commercial banks should reconsider loans to farmers beyond obligation or duty. The urgency to enhance loans to small farmers instead of concentrating on big and wealthy farmers needs to be adjusted through course corrections,” Fadnavis said.

“Let us not look at loan allocation to farmers as an obligation. While there are issues related to loan recovery, overall, statistics show bank loans to the agro-sector have increased every year. But it does not commensurate with more farmers availing the loans. Which means, a handful of big farmers are getting bigger loans,” he said.

While asserting that the state had already allocated more than Rs 18,000 crore to tackle the farm crisis in drought-hit Marathwada and Vidarbha, he said, “There is no paucity of funds.”

Referring to the Indian Meteorological Department (IMD)’s prediction of early monsoons, he said, “The 1.33 lakh works under the Jalyukta Shivar will give good results, even in moderate rains.”

The government has urged district officials to speed up the Jalyukta Shivar works in the next one-and-half months. The IMD has predicted monsoons in the state by June 10.

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