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Developing Rural Finance in India

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Developing Rural Finance in India
1. Abstract: Rural Finance is about providing financial services for people living in rural areas. It comprises credit, savings and insurance in rural areas, whether provided through formal or informal mechanisms. Financial Development can exert a significant influence on the distribution of Income. In this paper, using Indian rural financial programs implemented by various financial institutions like NABARD, IFAD, SHC, etc. we investigated the various reforms / developments in Indian rural financial system. The investigation shows that, despite positive economic development in India in recent years, the number of people living below the poverty line has decreased only slightly. 2. Keywords: Credit, Savings, Insurance, Rural Finance, Financial Development, Micro finance, Agricultural Credit, Gross Domestic Product, Economy, Nabard, Acronym: NABARD: IFAD: SDC: RBI: RRB: SIDBI: National Bank for Agricultural and Rural Development International Fund for Agriculture Development Swiss agency for development and Cooperation Reserve Bank of India Regional Rural Banks Small Industries Development Bank of India

3. Objective of Study: The main objective is to study importance of developing rural financial systems. To study the impact of various programmes and schemes implemented by Government as well as Non government bodies across rural areas, for financial development.

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4. Hypothesis: The Rural sector is one of the pillars to the overall economic development of India through its agricultural and non agricultural subsectors. However this sector has suffered adversely from misdirected policies of government. The importance of rural sector in Indian economy cannot be undermined. The government has taken many initiatives in the field of rural development. But the moot question is: Have these steps proven enough? The study has observed that the Government policy has created a `financial climate' that is not conducive to lending in general, and to rural banking in


References: Budget speech of Former Finance Minister P Chidambaram 's Budget 2008-09 Interim Budget 2009-10 The Economics Times Economic Survey 2003 Yale Global publication of the Yale Center for the Study of Globalization. Websites: www.ruralfinance.org www.ifad.org/ruralfinance www.nabard.org www.sidbi.com www.rural.nic.in 16
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