Overview
The RBI and the Government have reinforced the flow of credit to the rural economy, especially to farmers, micro‑enterprises and Self‑Help Groups (SHGs). The measures aim to sustain liquidity, expand credit coverage and address regional imbalances.
Key Developments
- The Priority Sector Lending (PSL) guidelines mandate banks to allocate at least 18% of their Adjusted Net Bank Credit (ANBC) or CEOBSE, whichever is higher, to agriculture. Within this, a sub‑target of 10% is reserved for Small and Marginal Farmers (SMFs).
- Collateral‑free short‑term agricultural loans have been increased from ₹1.60 lakh to ₹2.00 lakh per borrower, effective 01 January 2025.
- Concessional refinance for eligible Rural Financial Institutions (RFIs) is channeled through funds such as the Short‑Term Cooperative Rural Credit Fund (STCRCF), Short‑Term RRB Credit Refinance Fund (STRRBF) and Long‑Term Rural Credit Fund (LTRCF).
- The NABARD has launched several programmes for SHGs, including training for e‑commerce onboarding, the “m‑Suwidha” skill‑upgradation scheme, capacity‑building via the Financial Inclusion Fund, and a Tribal Development Programme covering health, sanitation and micro‑enterprise training.
- Ground Level Agriculture Credit (GLC) targets set by the Government complement PSL, facilitating wider reach of the