To fulfill the changing needs of farmers and to uproot private moneylenders, there is a need for a radical change in the mindset of financial institutions, especially banks. The present model of Self Help Groups (SHGs) needs to be adapted to suit Indian villagers. Activities like project identification, technical assistance, financing the project, marketing the produce, etc., should be brought under one umbrella.
It is interesting to observe the revival of political interest in farmers in India. It is true though that the interest has arisen purely due to the jolt the NDA government got at the hands of farmers. The new UPA government has announced its first new deal for farmers. However, the government is yet to spell out the strategy and policy in detail.
To implement farm credit successfully it is necessary to understand that farmers are attuned to the facile systems and procedures of a money lender. It is not only difficult but almost impossible for share croppers and marginal farmers to comprehend and adopt the procedures insisted upon by the institutions developed to cater farm credit in India. It is not right to ask commercial banks or the so called rural banks to replace village money lenders as these institutions are manned by a totally different class of people.
We have to understand that our farmers own scattered and fragmented land and, therefore, forming a group without keeping in mind the holdings the farmers have and their suitability to develop a viable economic project will not yield the desired transformation. In India, until recently, SHGs were formed based on the ability of the people in the group to help each other in case of emergency and its main function was to provide group security for the loans given to them. This has totally failed both the institutions giving credit and also the farmers availing credit on this basis. |
