NABARD

NABARD is set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.

It also has the mandate to support all other allied economic activities in rural areas, promote integrated and sustainable rural development and secure prosperity of rural areas. In discharging its role as a facilitator for rural prosperity NABARD is entrusted with

1.Providing refinance to lending institutions in rural areas

2.Bringing about or promoting institutional development and

3.Evaluating, monitoring and inspecting the client banks

Besides this pivotal role, NABARD also:

•Acts as a coordinator in the operations of rural credit institutions

•Extends assistance to the government, the Reserve Bank of India and other organizations in matters relating to rural development

•Offers training and research facilities for banks, cooperatives and organizations working in the field of rural development

•Helps the state governments in reaching their targets of providing assistance to eligible institutions in agriculture and rural development

Acts as regulator for cooperative banks and RRBs


NABARD's functions can be classified into 4 major categories viz. Credit Planning, Financial Services, Promotion and Development, and Supervision. Under Credit Planning NABARD prepares Potential Linked Credit Plan (PLP) annually for each district of the country by assessing potential available in agriculture and rural sector. This serves as a guide for banks and Government agencies to prepare their own investment and credit plans in the district and state. Under its Financial services, it refinances commercial, co-operative and regional rural banks for lending to on farm and non-farm activities. This includes farm activities like minor irrigation, animal husbandry, farm mechanization, forestry, fisheries, land development, horticulture, plantation and medicinal crops and non-farm like rural industries, artisans, handicrafts, handlooms, rural housing, rural tourism and agro processing. Refinance is provided by NABARD for both long term investment credit as well as short term production credit for crop loans and working capital for non-farm activities. A nationwide network of 28 regional offices at the state capitals, a sub-office at Port Blair and 391 district development offices are at hand to cater to this awesome task.




Self Help Groups (SHGs):
One of the major success stories of NABARD, the SHG Bank linkage programme started as a pilot project in 1992 with 500 SHGs. SHGs comprise homogeneous groups of poor people who have voluntarily come together mainly with the idea of overcoming their common problems of low social and economic status. SHGs enable the poor, especially the women from the poor households, to collectively identify, prioritize and tackle the problems they face in their socio economic environment. By pooling their meager resources and using them for lending among themselves, they develop the habit of thrift and the skill of credit appraisal, before getting mature enough to access a loan from banks, which is called credit linkage. Starting with small loans for consumption they soon graduate to bigger loans for setting up of income generating micro-enterprises. Today, NABARD's SHG Bank Linkage Programme boasts of over 26 lakh SHGs and 3.9 crore households influencing the lives of over 16 crore poor population. During the year 2006-07 alone, as many as 458591 groups were credit linked.


Rural Infrastructure Development Fund (RIDF):
Deficient Rural infrastructure hinders both social and economic development. Economists have explicitly emphasized on the direct correlation between the index of infrastructure development and rural development. NABARD's support to State Governments through RIDF since 1995-96 has brought about a sea change in the shape of upgraded infrastructure in rural areas. Rural roads and bridges under RIDF have improved market access to farmers; check dams and irrigation structures have augmented their water resources. Even drinking water projects and health centres have been supported under the Fund. NABARD so far has sanctioned Rs. 61539 crore for 2,44,025 projects under the Fund. A cumulative position of sector-wise sanctions as on 31 st March 2007 : Irrigation: Rs. 20637 crore, Rural connectivity: Rs. 26935 crore for rural road network and bridges, Power: Rs. 1434 crore Social Sector: Rs. 6988 crore Others: Rs. 5547 crore. A separate window has been created for rural connectivity with villages of population less than 500, with a corpus of Rs. 4,000 crore to support the Bharat Nirman project.