The present study was undertaken to examine the health and sustainability of Rural Non Farm Sector units and the remedial measures required for the same.

A sample of 47 borrowers included manufacturing (power looms, brick making, furniture making, plastic granules making, plastic pipes making, RCC pipes making, bangles making and card board making), service (tent house, hydraulic crane, boring machine and construction material), small business and agro-based units with 2002-03 as the reference year. A majority of these activities were traditional in nature.

Owing to indifferent attitude of the extension/promotional agencies and the funds crunch, the borrowers had not received any technical guidance in setting up the unit.

A total of 18 borrowers of BoB and BAKGB had got their applications sponsored by KVIC.

None of the financing banks had prepared/were keeping any project profiles for any Non Farm Sector activity financed by them. In case of BoB and BAKGB, sponsored cases were appraised in detail by KVIC only.

Since the PLDB did not have the requisite expertise for appraising the Rural Non Farm Sector activities, there was no real pre sanction appraisal of the loan applications.

CBs and RRB were financing the large-scale units based on their past experience while PLDB was financing the small-scale units on the basis of unit cost fixed for the activity.

PLDB took only 1 to 2 weeks time for sanction of loans while BAKGB and BoB, generally, took 29-78 days