Microfinance Gateway>Accelerating Rural Financing Process by Banks in India: Need For Creating Enabling Environment

affiliate language sites: Français عربي Español

Home

Library

Jobs

Training and Events

Organizations

Consultants

Library » Accelerating Rural Financing Process by Banks in India: Need For Creating Enabling Environment

Accelerating Rural Financing Process by Banks in India: Need For Creating Enabling Environment
2006, Patel, A. & Kalkoti, G.

Can an enabling environment help rural banks perform better?

This paper analyzes the data on the performance of banks, especially public sector banks, and argues for need to create an enabling environment that can facilitate banks to:

Expand outreach especially in remote locations to cover small/marginal and tenant farmers, landless laborers and households residing in drought prone, hilly and tribal areas of the country.
Understand the demand for rural financial products and services in the changed rural socio-economic scenario and meet them.
Introduce improvements in management and training policy for rural areas, reducing transaction costs and mitigating portfolio risk.
Pursue rural finance research and development tasks.

The paper finds that in order to encourage Rural Financial Institutions (RFIs) to play a role in farm sector development and rural rejuvenation, an enabling environment needs to be created in the areas of:

Removal of urban-biased policies,
Sound agricultural and rural development policies,
Promotion of broad-based rural financial sector reforms;
Development of effective legal system to enforce contracts,
Sound interest rate policies,
Appropriate legal status and prudential regulation of Rural Financial Intermediaries etc.

The paper concludes by making recommendations for the financial sectors, investments in agriculture, land usage and rural banking

Add Review


*First Name:		*Last Name:
Organization:
*Email:
*Country:
(rollover stars to select rating)
Review Title:

Review Text:
I do not want my name, email, or organization to appear with my review. (Country will always appear with posted reviews.)

By clicking "Submit" you confirm that you have read and consent to our Privacy Policy and Terms and Conditions.

Download this Document