Farmers not keen on availing bank loans


One out of every 10 farmers in the state is the holder of the Kisan Credit Card which allows him to avail of loans up to ` 3 lakh at a nominal rate of 4 per cent.

A study carried out by The Navhind Times has revealed that most farmers are not availing bank loan because they contend that the paperwork is too much and instead put in their own money for farming.

This has been happening despite the continuous efforts of the government to promote the scheme by providing subsidy on the interest incurred on the loan amount. In fact, recently the agriculture department issued a fresh notification on additional rebate of 1 per cent of the interest for repaying the loan amount in time.

There are around 50,000 farmers in the state with around 30,000 as fulltime farmers and the rest part-time farmers. At least farmers 6,446 have been issued credit cards.

It is learnt that since 2006-07 the central government has been providing interest rebate to banks to ensure that crop loans upto Rs 3 lakh are made available to farmers at 7 per cent per annum.

The fresh notification states that the farmers who availed crop loans upto Rs 3 lakh during 2009-10 and repaid them on time were eligible for additional rebate of 1 per cent, which has been increased to 2 per cent for 2010-2011.

The notification states that the short-term crop credit would be available to prompt repaying farmers at just 5 per cent for loans upto Rs 3 lakh under the government of India scheme. But in Goa interest subsidy on loans for agriculture and allied activities the farmers are provided an additional 1 per cent subsidy making the effective interest rate at just 4 per cent per annum. The farmers who will avail loans of above Rs 3 lakh but upto Rs 5 lakh will get subsidy on interest charged over and above 4 per cent.

Highly placed sources in the agriculture department informed that the KCCs are basically provided through the banks. However, the department has been promoting the scheme with farmers at meets of farmers’ club. He said the bank officials are invited at such meetings who in turn explain the scheme to the farmers and encourage them to register for the cards.

Informing that the farmers show reluctance to approach the banks due to the cumbersome paperwork, the sources said the farmers are informed to report any problems created by the bankers to process the loans. He said the issues related to the farmers are also taken up during the state-level meetings between the department and bank officials.

The sources informed that at present around 12 per cent of the farmers in the state have benefited from the scheme with 6446 farmers registered with various banks and added that 5276 farmers have been covered under the personal accident assurance scheme as per the data available upto June 2010. The banks had issued 5602 cards in 2007, 5892 in 2008 and 6221 in 2009.


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