The Hindu : Andhra Pradesh News : Rangarajan favours micro credit for poor

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Thursday, Aug 21, 2008
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Andhra Pradesh

Andhra Pradesh

Rangarajan favours micro credit for poor

Special Correspondent

‘Vulnerable persons should have access to credit’

Need for timely credit, financial services at affordable cost stressed
Institutional changes favoured to ensure proper credit delivery by banks

Photo: K.V. Poornachandra Kumar

Inspiring leader: C. Rangarajan, Chairman, Economic Advisory Council to Prime Minister, receiving the leadership award from SVU Vice-Chancellor C. Rathnam in Tirupati on Wednesday. —

TIRUPATI: C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister, regrets that out of 89.3 million farmer households in the country, 45.9 million constituting 51.4 per cent do not access credit either from institutional or from non-institutional sources.

He says the phenomenon is far too acute in the North-Eastern, Eastern and the Central regions. Quoting from NSSO data, he says that despite the vast network of banks, barely 27 per cent of total farm households borrow from formal sources (of which one-third also borrow from informal sources). The poorer the group, the greater is the exclusion, he says.

In this context, he strongly pitches in for ‘financial inclusion’ to enable access to timely and adequate credit and other financial services for the vulnerable groups at an affordable cost.

The former RBI Governor was delivering the 7th ‘Rajiv Gandhi Memorial Lecture’ at a programme organised here on Wednesday under the aegis of the Tirupati-based NGO Academy of Grassroots Studies and Research of India and the Rajiv Rural Development Foundation. He dwelt at length on the role micro finance could play in bringing about a greater inclusion.

He wanted institutional changes to ensure appropriate credit delivery system by the commercial banks having a large outreach with 33,500 branches in the country.

Award presented

Dr. Rangarajan was presented the ‘Rajiv Gandhi Outstanding Leadership Award’ at the function. Vice-Chancellor of Sri Venkateswara University C. Rathnam presided.

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