abhishreshthaa
Abhijeet S
General: Access to credit has long been considered a major poverty alleviation strategy in India. A variety of credit-linked programmes supplemented by subsidies have been implemented.
The Integrated Rural Development Programme (IRDP) operating since 1978-79 has been a major national rural poverty alleviation programme with a large credit component. Under this programme, nearly 53 million families below poverty line were assisted with bank credit of Rs.31 billion and subsidy of Rs. 10.5 billion upto 31st March 1998, but its impact had not matched the resources spent.
This was due to reasons like provision of supply rather than demand-led credit, loans not tailored to meet needs of individual enterprises, lack of aftercare support, weak linkages lack of supervision over loan utilisation etc. Further, there was no effective involvement of the people at any stage of implementation of the programme.
As a result, the incidence of high overdues and high transaction cost for the banks in financing the rural poor became a matter of concern for the policy-makers.
The Integrated Rural Development Programme (IRDP) operating since 1978-79 has been a major national rural poverty alleviation programme with a large credit component. Under this programme, nearly 53 million families below poverty line were assisted with bank credit of Rs.31 billion and subsidy of Rs. 10.5 billion upto 31st March 1998, but its impact had not matched the resources spent.
This was due to reasons like provision of supply rather than demand-led credit, loans not tailored to meet needs of individual enterprises, lack of aftercare support, weak linkages lack of supervision over loan utilisation etc. Further, there was no effective involvement of the people at any stage of implementation of the programme.
As a result, the incidence of high overdues and high transaction cost for the banks in financing the rural poor became a matter of concern for the policy-makers.