SAHAKARA SINDHU
Department Of Cooperation, Government of Karnataka

Agricultural Credit     ||    Non Agricultural credit    ||    Marketing     ||     Processing     ||     Consumer     ||     Dairy     ||     Housing


AGRICULTURAL CREDIT SECTOR

For more details contact :

A C DIWAKAR, Addl.RCS,(Credit) ,
Contact No :080-22256146 ,
Email : addlrcs-credit-ka@nic.in

ASHWINI Y T, ARCS (Credit-1) ,
Contact No :080-22269636/37 Ext : 215 ,
Email : arcs-credit-ka@nic.in

SARALA L, ARCS (Credit-2) Contact No :080-22269636/37 Ext : 218,
Email : arcs-credit-ka@nic.in

VASUDEVAMURTHY, ARCS (LDB)
Contact No :080-22269636/37 Ext : 216 ,
Email : arcs-ldb-ka@nic.in

SHORT TERM, MEDIUM TERM AND LONG TERM LOAN

     Economy of the State is mainly dependent on agriculture as more than 65% of the total population is engaged in this sector. Credit is an essential sinew for the progress of economic development. In a developing economy like ours Agriculture Credit assumes greater significance on account of the fact that it is a critical input to support and sustain crop production.

    • The Co-operative Credit system is the oldest sector of the co-operation movement and consists of short term credit, medium term credit and long term credit structure.

    • Short Term structure is a three tire structure with Primary Agricultural Credit societies in rural areas, Co-operative Central Banks at the district level and the Apex Bank at the state level.

    • The Short Term credit structure provides Short Term credit for crop production and Medium Term credit for small developments through Primary Agricultural Co-operative Societies. Out of 5546PACS in state 5355 PACS are functioning and are affiliated to 21 District Cooperative Banks (DCCB) with 744 branches. The Central Banks secure refinance facilities from NABARD through Karnataka state Co-operative Apex Bank.The average lending per farmer is Rs.45008 and average advance per PACS is Rs.180.34 lakhs.

    • Karnataka state cooperative Agriculture and rural development Bank (KSCARD) at the State level and Primary cooperative agriculture and 177Primary cooperative Agricultural and Rural Development banks at the taluk level cater to the long term credit needs in the two tier credit delivery system. The National bank for Agriculture and Rural Development (NABARD) provides refinance to the Apex bank and KASCARD Bank.

Agricultural Co-operative Credit Structure:

Plan for the year 2018-19

                It is proposed to disburse Rs 10500.00 crores of agricultural loans to  23.50 lakh farmers in the State @ 0% upto 3.00 lakhs through Cooperatives for the year 2015 –2016. Medium and Long term agricultural loans upto Rs.3.00 lakhs are being lent at 3%.

Disbursement of Loans :

Agricultural Loans ursement from 01-04-2018 to 31-03-2019

                                                                                                                                                                       (Rs in crores)

Sl.No

Particulars

Number

Amount

Out of which Loans for New members

Out of which Loans to SC/ST members

No

Amt

No

Amt

1

Short term loan

1972694

10585.97

214030

1112.55

264145

1203.12

2

Medium term loan

25522

530.78

19427

434.86

2481

46.67

3

Long term loan

16735

233.77

10024

134.15

1519

20.60

 

  Total

2014951

11350.52

243481

1681.56

268145

1270.39

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The funds involved by various institutions in the Short term  agricultural loans disbursed through PACS is as follows :

Sl.No

Name of the Institution

Funds Involved
(Rs.Crores)

1

NABARD

3500.00

2

APEX Bank

1838.96

3

DCC Banks

5227.14

4

PACS Own fund

19.87

6

Total

10585.97



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Performance of Short Term, Medium Term and Long Term Credit Structure in the Karnataka

     

       As on 31-3-2019, During the year 2018-19, the short term (ST), medium term (MT) and long term (LT) loans disbursed by the co-operative credit system in the State was Rs. 10585.97crores, Rs.530.78 crores and Rs. 233.77crores respectively, thereby achieving progress of 84.56% as against the annual target.

The scheme of disbursing loans to the farmers through Kissan Credit Cards was started from the year 1997-98. As on 31-03-2019, 2167215 KCC cards has been distributed of which 21,08,944 KCC cards holders are covered under Personnel accident insurance scheme.

Performance of ST, MT and LT Credit Structure in the Karnataka, from 2016-17- to 2018-19
                                                                                                                                                                                             ( Rs.In Crores)

Year

 Short term

Medium term

 Long term

 Total

Percentage (%)

Target

Achievement

Target

Achievement

Target

Achievement

Target

Achievement

2016-17

11000.00

10769.00

1000.00

692.78

600.00

440.41

12600.00

11902.19

94.46

2017-18

12000.00

10571.88

1000.00

848.73

500.00

198.27

13500.00

11618.88

86.06

2018-19

12000.00

10585.97

1000.00

530.78

423.26

233.77

13423.26

11350.52

84.56

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Recovery of loans

           The comparative position  of recovery of short, medium and long term loans under the cooperative credit system in the state for the years from 2016-17 to 2018-19 is presented in the following table.

                                                                                                                                                                                                     Rs. in Crores

Year

Short term loan

Medium term loan

Long term loan

Demand

Collection

Balance

% of Recovery

Demand

Collection

Balance

% of Recovery

Demand

Collection

Balance

% of Recovery

2016-17

9954.19

9368.72

585.47

94.12

427.23

316.71

110.52

74.13

638.07

258.41

379.66

37.00

2017-18

10594.25

9647.08

947.17

91.06

539.54

424.30

115.24

78.64

852.33

429.71

422.62

50.42

2018-19

11307.30

10281.47

1025.83

90.93

583.73

478.66

105.07

82.00

843.28

326.36

516.92

38.70

 

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I. Interest subsidy on Agricultural Loans disbursed at 0 & 3%:

      The scheme of advancing agricultural short, medium and long term loans to the farmers at the rate of interest of 3% through Cooperative Credit Institutions has been implemented from 01.04.2008. The interest rate on loans upto Rs.3 lakhs has been reduced to 1% during 2011-12. Since 01.04.2012 the interest rate on loans disbursed uptoRs.1.00lakh is reduced to 0% and on entire loan above Rs.1.00lakhs upto Rs.3.00lakhs at 1%. The differential rate of interest is reimbursed by the Government to the Cooperative Institutions by way of interest subsidy.

       During the year 2013-14 the interest rate on loans disbursed upto Rs.2.00lakh has been reduced to 0% and the entire loan above Rs.2.00lakhs upto Rs.3.00lakhs is disbursed at the rate of 1%. Further during the year 2014-15 the limit of agricultural loans disbursed at 0% has been increased to Rs.3.00lakhs, which was continued in the years 2015-16,2016-17,2017-18 and 2018-19. In this regard Government has prescribed the fixed rate of interest to cooperative societies.

       In the year 2018-19, Rs.96300.00lakhs was provided for implementation of this scheme. The Government has released Rs.77749.64lakhs and the entire amount is released through DCC Banks towards the claims of 1989021 beneficiaries.

      During the said period, out of the amount released Rs.3233.38lakhs was spent under the special component plan towards the claims of 121100 SC beneficiaries and Rs.2759.00lakhs was spent under the Tribal Sub-Plan towards the claims of 105830 ST beneficiary members.

II. Loan Waiver -2017 Scheme:

      As the farmers were faced distress situation due to the occurrence of continuous drought for the last 3 years, Government of karnataka has announced loan waiver up to Rs.50,000/- for the farmers. For the implementation of scheme during 2017-18 budget allocation of Rs. 3907.99crores and with the infrastructure apex bank Rs.1064.00crores has been disbursed. This scheme will benefit 12.80lakhs farmers with Rs.4971.99crore of loan waiver amount. During the year 2018-19, Government has released Rs.2740.21cr for 8.23lakhs farmers.

III. Loan waiver up to maximum of Rs. 1.00lakhs-2018

      During the pre-budget discussion, all the legislative members opined that the farmers were not much benefitted through the loan waiver scheme. Due to this Hon’ble chief minister announced that the short term loan availed by the farmer in cooperative institutions which are outstanding as on 10.07.2018, maximum of loan up to 1.00lakhs waived off per family.

       The loan waive will come into effect as and when the due date is if the loan is outstanding as on 10.07.2018 is current principal amount above 1.00lakhs should be paid within the due date of repayment.

       If the outstanding is overdue as on 10.07.2018 the principal and interest should be paid within 31.03.2019 to avail the benefit.

      The person who is salaried / pensioner and the followings are not eligible for the scheme. Salaried / pensioner whose monthly income should not exceed Rs.20,000/-. In last 3 years any person who is paid income tax at least one year. It is to be estimated that 20.38laks farmers will be benefited with an amount of Rs.9448.00crores. During the year 2018-19, Rs.2600.00crores were released towards 410375 farmers.

 

SELF HELP GROUPS

IV. Interest subsidy to Self help groups :-

      The scheme of advancing loans at interest rate of 4% through primary agricultural credit societies to Self Help groups (SHGs) in Karnataka has been implemented from 01.04.2007. The differential rate of interest is being reimbursed as interest subsidy by the Government to the co-operative societies. Loan lend during the year 2017-18 through DCCB / PACS’s and recovered during 2018-19, based on the recovery by including NRLM and NULM scheme of central govt, differential rate of interest will be borne by the state govt. which is zero percent for women SHG’s and 4% for others.

V. Formation, Fresh Finance and Repeat Finance of Self help groups :-

      During the year 2015-16 Rs. 6262.75lakhs and during the year 2016-17 Rs. 2089.50lakhs interest subsidy is released through DCCB/Credit cooperative societies in favour of SHG’s. In the year 2017-18, Women SHG’s have been disbursed loans at 0% . During 2018-19 loan lend to 13820 SHG’s amounting to 428.04crores and for this state govt has been released Rs.60.00crores.

                                                                                                                                                                                                 Rs. in crores

Year

Group Formation

Fresh Finance

Repeat Finance

Total Loans

Target

Achievement

Target

Achievement

Target

Achievement

Target

Achievement

No

Amt

No

Amt

No

Amt

No

Amt

No

Amt

No

Amt

2016-17

12000

11419

12000

130.00

8834

169.44

32000

630.00

24046

547.12

44000

760.00

32880

716.56

2017-18

12000

23862

9500

184.00

13689

418.67

26500

606.00

25083

682.75

36001

790.00

38772

101.92

2018-19

16400

12889

9700

200.00

5528

171.22

30300

800.00

8292

256.82

40000

1000.00

13820

428.04

#

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VI. Construction and maintenance of PCARD Banks, TAPCMS and Primary Agricultural Credit Co-Op Societies :-

      Under the said Scheme, Rs.3crores has been released to 26 co-operative societies in the year 2013-14, Rs.5.25crores is released to 96 co-operative societies during the year 2014-15 and Rs.24.24crores is released to 407 co-operative societies during the year 2015-16. Further Rs.24.24crores has been released. During the year 2016-17 Rs.10.00 crores is released to 108 co-operative societies. In the year of 2017-18, Rs. 125.00lakhs has been released to 13 co-operative societies.

VII. Scheme for providing assistance to Primary Agricultural credit cooperative societies for construction of godown :-

       Under the said Scheme, Rs.5.00crores has been released for 115 Primary Agricultural credit cooperative societies to construct their own minimum 100tonnes capacity godowns involving financial contribution in the ratio of 70:30 from PACS and the Government. For 18 cooperative societies Rs 80.00lakhs has been released for the year 2016-17. No amount is disbursed during the year 2017-18 and 2018-19.

       During the year 2018-19 on completion of century the Karnataka Central cooperative bank n., Dharwad and District Central Cooperative Bank, Vijayapura the Govt has sactioned Rs. 2.50crores towards constrction of building.

VIII. During the year 2018-19 on completion of century the Karnataka Central cooperative bank n., Dharwad and District Central Cooperative Bank, Vijayapura the Govt has sactioned Rs. 2.50crores towards constrction of building.

In order to give relief to farmers suffering due to severe drought during 2015-16 and 2016-17, Govt has announced two schemes to help the farmers in reducing tier financial burden:-

IX. Interest waiver on Overdue ST, MT and LT Agricultural loans:-

       Under the said scheme, Government has waived the interest on Over due principal of Short term, Medium term and long term Agricultural loans as on 30-9-2015 , provided that farmers repay the principal amount within 31-03-2017.

       During the year 2016-17 Rs. 124.69 crores has been released to cooperative institutions on behalf of 72583 farmers. During the year 2017-18 an amount of Rs 5000.00lakhs is released to 28400 farmers..

X.Loan waiver of failed wells of farmers borrowed loan from Primary Agricultural and Rural Development Banks. :-

      During the year 2016-17 Rs. 124.69 crores has been released to cooperative institutions on behalf of 72583 farmers. During the year 2017-18 an amount of Rs 5000.00lakhs is released to 28400 farmers.

XI. Kayaka Scheme :-

      In the year 2018-19, It is announced in the budget to implement a new scheme called ‘Kayaka’ to enhance skill development and entrepreneurship quality in self help groups to encourage taking up self employment to increase their income. Loan upto a maximum of Rs.10.00lakh under this scheme for self help groups on cluster model or individually.

      Under Kayaka scheme, loan availed by SHG members through cooperative banks at zero interest rate for loan upto Rs.5.00lakh and 4% interest for loan between Rs.5.00lakh to Rs.10.00lakhs. As on March-2019 around 232 SHG groups availed loan amount of Rs.12.50crores.

XII. Badavara Bandhu:-

      Street vendors/ small vendors are at the lowest economic strata, who are subjected to exploitation without institutional finance system. Government has responded to the difficulties and micro finance facility to street vendors/small vendors in the State under “Badavara Bandu” mobile service scheme, which is announced in 2018-19 budget. Through cooperative banks at zero interest rate for loan upto Rs.10,000 is lend to Street vendors/ small vendors. As on March-2019 around 18344 Street vendors/ small vendors availed loan amount of Rs.10.57crores.