MUMBAI: Nabard, the country’s apex development financial institution, said it will raise Rs 32,000 crore this fiscal. After surpassing the government target of Rs 9 lakh crore agricultural credit, it hopes to meet and even cross the Rs 10 lakh crore target set for the current fiscal.
“We have seen an uptick in ground level credit flow to agriculture by banks, primarily because of the government push and demand for loans for allied activities,” said Harsh Kumar Bhanwala, chairman, Nabard.
Speaking to reporters here on Tuesday, he said agriculture saw a jump in repayments initially during demonetisation, but credit flow fell subsequently. Terming farm loan waivers a moral hazard, Harsh said, “Loan waivers create a moral hazard from a credit repayment perspective and we cannot have omnibus waivers.”
According to him, Nabard’s outstanding borrowing increased to Rs 80,000 crore from Rs 60,000 crore last year and there will be an increase of Rs 15,000 crore in the outstanding borrowing this fiscal.
Of the Rs 32,000 crore to be raised, Rs 25,000 crore is earmarked for long-term irrigation, Rs 5,000 crore for micro-irrigation and Rs 2,000 crore for dairy projects. About one-third of the total loans were towards long-term (over 18 months and more) irrigation projects, while the rest were short-term crop loans. The lender has seen a rise in demand for agricultural loans even as banks have been struggling to see any loan demand in general.
Meanwhile, Nabard reported a 4.24 per cent increase in FY17 net profit at Rs 2,631 crore and a 16.27 per cent expansion in outstanding loans at Rs 3.08 lakh crore.
To facilitate digitalisation, Nabard’s financial inclusion fund sanctioned installation of 2.07 lakh point of sale machines in just three months, with financial support of Rs 6,000 per machine.
“There are discussions in the government to have an SPV and we will finance the SPV meeting the government’s capital shortfall,” an official said.
Although Nabard has been refinancing rural housing projects even now, this is considered a direct approach and a first for the institution in terms of size.