Towards Inclusive Development

Over the last 42 years, NABARD has dedicated itself to promoting livelihoods, developing skills, establishing institutions, fostering entrepreneurship, expanding financial and digital inclusion, and assisting with research and information sharing to achieve inclusive development in India. These initiatives have produced excellent results locally, proving that NABARD’s strategy has been effective in creating a vibrant development ecosystem for rural India, enabling stakeholder growth and contributing handsomely to economic development at the national level.

NABARD created its first community institutions in the form of Vikas Volunteer Vahini in the 1980s. Subsequently, self-help groups (SHGs) in the early 1990s emerged as an important strategy for revolutionising community institutions and securing livelihoods for the marginalised and poor people, especially rural women. Later on, NABARD promoted joint liability groups (JLGs) to facilitate credit offtake by landless farmers cultivating land as tenant farmers, oral lessees, share croppers and small/marginal farmers, and other individuals for taking up farm, off farm, and non-farm activities.

In recent years, NABARD has been promoting farmer producers’ organisations (FPOs) and off-farm producers’ organisations (OFPOs) to enable small-scale farmers or artisans to benefit from economies of scale, improve their bargaining power, and access better market opportunities.

4.1 SCALING-UP MICROFINANCE INITIATIVES

4.1.1 Improving the self-help group–bank interface

NABARD has been at the forefront of rural banking innovations with its SHG–Bank Linkage Programme (SHG–BLP), reaching out to 17.8 crore rural households and providing access to affordable and sustainable credit and financial services through mainstream banks (Table 4.1).

Table 4.1: Performance of the Self-Help Group–Bank Linkage Programme up to FY2024

SHG = Self-Help Group.

This programme has improved the lives of rural women and assisted them to save, borrow, and build social capital, thus enabling them to earn better and reduce their dependence on private moneylenders.

Besides the SHG–BLP, NABARD also strives to improve the interface between bankers and SHGs by sponsoring village-level programmes (VLPs) conducted with the support of banks and the Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY-NRLM), Ministry of Rural Development, Government of India. The VLPs facilitate the opening of SHG accounts, establishment of their credit linkage, and the regularity of loan repayments, besides improving financial inclusion. During FY2024, NABARD supported 15,794 VLPs taking their cumulative number to 66,357.

NABARD has partnered with Anniyam Solutions to pilot the Money Purse Application (MP App) in collaboration with Odisha Gramya Bank (10 branches) and South Canara District Central Cooperative Bank (5 branches). Through the MP App, members can undertake various financial activities facilitated by business correspondents in digital mode—account opening (both group and individual), saving and loan collections, credit linkage, internal loan disbursement, real-time bookkeeping, grading, etc. The project aims to deliver efficient and real-time financial services to SHG members residing in rural areas.

4.1.2 Strengthening joint liability groups

NABARD incentivises banks to provide collateral-free credit to JLGs so that their members, who are poor and marginalised, can take up diverse farm and non-farm activities to improve livelihoods and spread their risks. During FY2024, 73.3 lakh JLGs were promoted and financed by banks, taking the total JLGs to 331.3 lakh (as on 31 March 2024). Also during the year, NABARD sanctioned ₹16.4 crore for the credit linkage of 6 lakh JLGs.

4.1.3 Building capacity for better programme implementation

Various training and capacity building programmes were undertaken for key stakeholders such as bankers, non-government organisations, government officials, SHGs and SHG federations, and trainers. During FY2024, 3.15 lakh participants were trained through various programmes. Cumulatively, 50.2 lakh participants under the Financial Inclusion Fund and 5.2 lakh participants under the Women SHG (WSHG) programme have been imparted training as on 31 March 2024, thus supporting the creation of strong, skilled, and experienced teams for implementation of microfinance programmes.

4.2 INTERVENTIONS FOR BETTER LIVELIHOODS

4.2.1 Skilling and entrepreneurship development programmes

Taking a demand- and outcome-based approach to support wage- or self-employment in rural India, NABARD runs micro-enterprise development programmes (MEDPs), livelihood and enterprise development programmes (LEDPs), and skill development programmes (SDP) (Table 4.2).

Recognising the criticality of rural skilling, especially of WSHG members, NABARD has revised MEDP and LEDP guidelines in FY2024 to enhance flexibility and improve scheme implementation at the grassroots. The total outlay under both the programmes has been enhanced and changes related to duration of the programme, number of participants, provision of exposure visits, handholding and management cost support, inclusion of new entities as implementing agencies, etc., have been incorporated.

Table 4.2: Skilling and Entrepreneurship Development Programmes (as on 31 March 2024)

LEDP = Livelihood and Enterprise Development Programme, MEDP = Micro-Enterprise Development Programme, SDP = Skill Development Programme.

4.2.2 Graduated Rural Income Generation Programme

To build capacities and enable asset generation by the ultra-poor, the Graduated Rural Income Generation Programme (GRIP) is being piloted in five districts across five states (Madhya Pradesh, Maharashtra, Odisha, Jharkhand, and Meghalaya) in three cohort sizes (250, 500, and 1,000 beneficiaries). Under GRIP, access to formal financial services will be facilitated for the ultra-poor through the innovative ‘returnable grant’ instrument. Under GRIP, up to a maximum of 50% grant-for-livelihood-options can be returned per beneficiary. NABARD’s partner for GRIP is Bandhan Konnagar, the corporate social responsibility arm of Bandhan Bank. With grant support from NABARD, Bandhan Konnagar will provide free assets (not cash) to the participants. It will then use the well-tried and evidence-based tools of Bandhan’s Targeting the Hardcore Poor Programme to provide time-bound, carefully-sequenced asset management training to the participants through intensive handholding by field cadres over a period of 30 months. Once the beneficiaries are able to generate income through the assets, Bandhan Konnagar will return up to a maximum of 50% of the grant (value) per beneficiary to NABARD.

4.2.3 M-Suvidha: Setting up microenterprises by upgrading skills of women

To promote sustainable rural livelihood solutions in the farm and off-farm sector, need-based and location-specific projects in the skilling of women are formulated under M-Suvidha. Strategised as end-to-end interventions, these projects first identify suitable occupations/entrepreneurial activities in the local context and assess the skill gap of the target population that needs to be bridged. Participating women are then imparted the skills to set up and run microenterprises through identified knowledge partners/resource agencies with marketing tie-ups and credit support from banks/financial institutions. The scheme is expected to be implemented in detailed project report mode.

4.2.4 Strategic alliance for skilling and entrepreneurship training

NABARD and DAY–NRLM inked a landmark memorandum of understanding (MoU) on 27 February 2024 under which DAY–NRLM will engage with rural livelihood missions at the state/Union Territory (UT) level to facilitate their participation as project implementing agencies with NABARD for

• niche development schemes for capacity building, skilling, and entrepreneurship training of matured WSHGs in the spirit of the Lakhpati Didi Yojana,¹
• physical and online marketing support schemes,
• graduation of SHG clusters to FPOs and OFPOs for sustainable economic activities,
• promotion of climate-resilient agriculture for WSHGs,
• livelihood interventions for WSHGs in NABARD’s wadi and watershed development project areas, and
• deepening of financial inclusion.

The MoU further aims to develop pilots in digital transactions of SHG federations to usher in transparency and efficiency to minimise turnaround time for members, besides exploring options for deployment of WSHG members as business correspondents of banks.

4.2.5 Activities funded by the Capacity Building Fund–Social Stock Exchange

The Capacity Building Fund–Social Stock Exchange (CBF-SSE) was setup as an administrative fund under NABARD. The CBF-SSE consists of a corpus of ₹100 crore with funding contributed by NABARD, Small Industries Development Bank of India (SIDBI), Bombay Stock Exchange (BSE), National Stock Exchange (NSE), and others. To kick-start the CBF-SSE, NABARD, SIDBI, and NSE have contributed ₹2.5 crore each and BSE has contributed ₹2 crore. The fund is meant for activities related to awareness creation and capacity building of stakeholders, such as not-for-profit organisations (NPOs), for-profit enterprises, investors, etc., regarding SSEs.

During FY2024, NABARD actively organised awareness and capacity building programmes for NPOs to enable them to onboard onto the CBF-SSE platform. With coordinated efforts of NABARD, NSE, BSE, and other experts, eight NPOs were listed on the SSE. NABARD has subscribed to the projects of two NPOs, namely, Eklavya Foundation and SGBS Unnati, at ₹30 lakh each.

SGBS Unnati was the first NPO to open its issue on the CBF-SSE. The agency sought to raise ₹2 crore through the SSE for training 10,000 youth across five states. NABARD was one of the very first subscribers of its Zero Coupon Zero Principal (ZCZP) instrument, subscribing to ZCZP worth ₹30 lakh. The NPO was successful in raising 90% of the total issue size before the closure of the issue and was listed on the SSE. NABARD organised an SSE cohort meeting wherein all the stakeholders of the CBF-SSE participated. A multi-stakeholder seminar on ‘SSE: Way Forward’, chaired by the Secretary, Department of Financial Services, Government of India, was also organised by NABARD.

4.3 FARMER PRODUCERS’ ORGANISATIONS

In FY2024, NABARD promoted 221 FPOs, of which 39 have been registered. Cumulatively, NABARD has promoted more than 7,000 FPOs with a membership of 25 lakh farmers, of which about 82% are small and marginal farmers and 30% are women (Table 4.3).

So far, 1,995 FPOs have availed credit from banks or other financial institutions. Details of over 4,500 FPOs promoted by NABARD have been onboarded and updated on the NABARD Farmer Producers’ Organisation portal. The database of central sector scheme FPOs has been updated on the integrated management information systems portal.

Table 4.3: Promotion of farmer producers’ organisations

^a FPOs registered in FY2024 include FPOs sanctioned earlier but registered in FY2024.
^bincludes interest on unutilised fund.
CSS = Central Sector Scheme, FPO = Farmer Producers’ Organisation, PODF-ID = Producers Organisation Development Fund-Interest Differential, PRODUCE = Producers Organisation Development and Upliftment Corpus.

4.3.1 Strategies adopted to strengthen FPOs

The key drivers of FPO success are member centrality, ownership, good governance, and business planning supported by timely and adequate credit. In this direction, the following strategies have been adopted by NABARD to strengthen FPOs:

• continued and intensified efforts towards handholding and capacity building of FPOs at the ground level;
• constant engagement with mainstream banks on extending credit to FPOs, leveraging the available credit guarantee, and sensitisation of bank officials through State Level Bankers’ Committees, Block Level Bankers’ Committees, District Consultative Committees, etc.;
• focusing on value addition, effective market linkages, convergence, etc., for making FPOs sustainable;
• collaboration with value chain players to leverage the FPO’s strength in aggregation and marketing (Showcase 4.1);
• linking FPOs with commodity markets to enable price discovery and enhance the level of connectivity with national and global markets;
• study and documentation of successful FPOs to understand issues of membership, feasible crops for value addition, scalability, functions, capacity building frameworks, etc.;
• consolidation of already promoted FPOs and promotion of new FPOs in animal husbandry, fisheries, and niche products through a graded approach; continued efforts to improve the grading of FPOs;
• digitisation of FPOs by encouraging them to subscribe to existing products or consider developing the digital tools; and
• customisation of an enterprise resource planning solution for FPOs by adapting the primary agricultural credit society (PACS) computerisation software.

4.3.2 Initiatives in FY2024 for FPO promotion and development

For the promotion and development of FPOs in FY2024, NABARD has

• onboarded 93 eligible lending institutions with NABSanrakshan under Credit Guarantee Fund Trust for Farmer Producer Organisations and sanctioned credit guarantee cover of ₹278.2 crore to 1,195 FPOs (1,561 guarantees);
• conducted FPOs melas (Tarang: Celebrating Collectivisation) in partnership with Small Farmers Agribusiness Consortium and Open Network for Digital Commerce (ONDC) at 24 locations across 24 states/UTs to demonstrate the products of FPOs and OFPOs to enable the marketing and branding of FPO products and increase sales through e-commerce;
• conducted conclaves on the sustainability of FPOs at Bankers Institute of Rural Development (BIRD), Lucknow and BIRD, Kolkata (exclusively for FPOs of east and northeast region);
• sanctioned ₹25 crore to National Commodity & Derivatives Exchange Limited for a period of one year for a price protection programme for FPOs to encourage farmers to
  • avail themselves of a ‘put option’ in the commodity market to receive assured strike price and avail
  • credit at reasonable cost from bank/financing institution by realising minimum price through hedging mechanism in commodity market;
• undertaken activities under an MoU signed with Agricultural and Processed Food Products Export Development Authority (APEDA) that include
  • promotion of agri-exports;
  • capacity building of farmers in good agricultural practices, packaging, branding, and exporting protocol;
  • convergence of schemes of the respective institutions, etc.; and
  • promotion of FPOs in identified agri-export clusters, which enabled
    • registration of 80 FPOs with APEDA during FY2024 and 307 FPOs cumulatively;
    • 25 FPOs (of cumulative 307) from across 12 states to export spices, fruits, baby corn, etc.;
• conducted training programmes for FPO representatives in collaboration with ONDC to create awareness regarding ONDC, process of FPO onboarding, product catalogue preparation, etc.;
• provided grant support for the development of product catalogue which enabled about 470 FPOs to be onboarded and 150 FPOs to prepare product catalogues;
• sanctioned ₹9.9 lakh to Akashmala Solutions (Brand: Unnati) for the training and digitisation of eight FPOs and one PACS and onboarding on uStore in Bihar, Uttar Pradesh, and Maharashtra to create a model on agri-value chain financing;
• supported FPO accelerator initiatives through which:
  • FPOs availed of specialised training, mentorship, and resources;
  • FPOs could enhance operational efficiency, adopt modern agricultural techniques, and navigate market complexities;
  • networking among FPOs was facilitated, thus,
    • creating a collaborative ecosystem that encouraged knowledge-sharing and collective problem solving and
    • connecting them with leading agri-start-ups.

4.4 PROMOTING FARM SECTOR DEVELOPMENT

The cumulative disbursements under FSPF are at ₹246.7 crore as on 31 March 2024. Activities supported under FSPF are listed below.

4.4.1 Projects implemented under detailed project report mode

Projects in agriculture and allied sectors promoting innovations, productivity enhancement and market access, value chain development, climate-resilient agriculture in vulnerable districts, farmers’ collectives, and hi-tech agriculture-focused projects on internet of things, information communication technology, artificial intelligence, and machine learning are supported under the

detailed project report (DPR) mode (Showcase 4.2). These projects are sanctioned normally for a period of 2–3 years. Since the inception of the fund, 1,969 projects have been sanctioned under the DPR mode and a grant assistance of ₹126.2 crore has been disbursed. Of these, 159 projects were sanctioned with grant assistance of ₹32.8 crore during FY2024.

4.4.2 CAT—Capacity Building for Adoption of Technology

The CAT programme provides grant support for the capacity building of farmers through exposure visits and training for the adoption of new technology/best practices in agriculture and allied sectors.

Since the inception of FSPF, 2,774 exposure visits have been supported with grant assistance of ₹22.3 crore for the benefit of 82,060 farmers. During FY2024, 182 exposure visits were undertaken for the benefit of 4,735 farmers with grant assistance of ₹2.8 crore.

4.5 STRENGTHENING THE OFF-FARM SECTOR

NABARD has steadfastly supported off-farm activities in handloom, handicraft, and agro-processing sectors, which generate local employment through value addition, design innovation and development, brand-building, warehousing, mechanisation, etc., and build strong market linkages (Showcase 4.3).

As on 31 March 2024, NABARD has sanctioned a grant assistance of ₹42.7 crore for the promotion and development of 81 OFPOs in 27 states covering 25,922 beneficiaries, of which 18 are all-women organisations with a total of 6,890 members. During the FY2024, a total of nine OFPOs in five states (two each in West Bengal, Bihar, Uttar Pradesh, and Odisha and one in Kerala) have been sanctioned with a grant assistance of ₹4.4 crore, with the expectation of benefitting 2,520 artisans and weavers (Showcase 4.4).

4.6 SUPPORTING RURAL ENTREPRENEURS, START-UPS, MARKETING, AND BRANDING

4.6.1 Rural/Agri-business incubation centres

NABARD provides end-to-end technical assistance for setting up rural business incubation centres (RBICs) at agriculture universities/similar institutions to provide business support services and resources to agri-start-ups and agri-entrepreneurs (Figure 4.1).

Figure 4.1: Promotion of RBICs as of 31 March 2024

FPO = Farmer Producers’ Organisation, RBIC = Rural Business Incubation Centre.

Note: Start-ups are registered with the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India

4.6.2 Catalytic Capital Fund to support agri/rural start-ups

NABARD established CCF to support rural and agri-start-ups through incubation centres and NABARD subsidiaries. Under CCF, an amount of ₹18 crore has been sanctioned to NABKISAN Finance Limited and three incubation centres (MABIF, a-IDEA, and AgHub). Of these, till date

• NABSKISAN has supported six start-ups with a funding of ₹4.8 crore;
• Madurai Agri Business Incubation Forum (MABIF) has supported 15 start-ups with a cumulative funding of ₹2.7 crore;
• a-IDEA has supported five start-ups with funding of ₹94.5 lakh; and
• AgHub has supported three start-ups with funding of ₹1 crore.

During FY2024, ₹3 crore was disbursed under CCF to MABIF, a-IDEA, and AgHub to support 20 start-ups.

4.6.3 Marketing initiatives

To help producers with better marketing and improve price realisation, NABARD has been extending support for setting up rural haats and marts and increasing the participation of artisans and craftspersons in national and regional exhibitions and melas (Figure 4.2, Showcase 4.5).

Figure 4.2: Progress of marketing initiatives

During FY2024, eight ‘Stalls in Malls’ were supported with grant assistance of ₹84.6 lakh in West Bengal, Rajasthan, Madhya Pradesh, Tripura, Haryana, Punjab, Telangana, and Andhra Pradesh.²

4.6.4 Promotion of geographical indications products

As on 31 March 2024, NABARD has supported geographical indications (GI) registration and post-GI registration activities of 300 products, of which 138 products have been GI-registered. Products GI-tagged in FY2024 include Sambal Horn Craft (Uttar Pradesh), Tangsa Textile Products (Arunachal Pradesh), Basohli Pashmina Woollen Products (Jammu & Kashmir), Majuli Mask (Assam), Bikaner Kashidakari Craft (Rajasthan), and Risa Textiles (Tripura).

4.6.5 New initiatives taken during FY 2024 to promote marketing

• Drawing from the feedback and learning from pilots, a ‘Scheme for Grant Support to SHGs/ JLGs/producer organisations (POs)/microentrepreneurs for training, onboarding and marketing of products on online/digital marketplaces e-commerce, social media platforms and ONDC’ was introduced during the year. Support under the scheme was provided to anchor agencies and technical training partners for (i) training SHGs/JLGs/POs on online marketing platforms and (ii) onboarding support for a period of 6 months for marketing of products on online/digital marketplaces, viz., e-commerce, social media platforms such as Instagram, Facebook, WhatsApp, etc., and ONDC. During the year, under 78 training programmes, 1,435 SHGs/JLGs/POs were trained and 387 SHGs/JLGs/POs onboarded onto e-commerce platforms. NABARD’s Mystore page for the online sale of products of rural collectives and micorentrepreneurs has been live since 22 November 2023 and as on date, 689 products are available on the page.³
• A new ‘Scheme for Grant Support to SHGs/JLGs/POs for Physical Marketing of Products’ was introduced during FY2024 in rural, semi-urban, and urban centres to maximise access to markets. Under the scheme, support is available for (i) setting-up of gram dukans by SHGs/POs, (ii) moveable carts in individual capacity, (iii) stalls/movable carts near bus stands/railway stations/shopping areas in Tier I/Tier II/Tier III cities and semi-urban centre/kasba/taluka/block and district headquarters, major cities and state capitals/State Secretariat/Collectorate/district collector’s office and other appropriate government offices, and (iv) outlets at airports run by the Airports Authority of India under the government’s AVSAR (Airport as Venue for Skilled Artisans of the Region) scheme. During the year, 31 gram dukans, 5 moveable carts, and 9 stalls were sanctioned to support 7,812 members of SHGs/JLGs/POs.

4.7 SUPPORTING RESEARCH AND SHARING KNOWLEDGE

NABARD leverages a dedicated Research and Development (R&D) Fund for applied socioeconomic studies, seminars, publications, student engagement schemes, and trainings to expand the knowledge base in agriculture and rural development and share insights with policy makers, stakeholders, and the public.

4.7.1 NAFIS 2.0

The NABARD All India Rural Financial Inclusion Survey (NAFIS) 2.0, covering one lakh households, was conducted to collect primary data on livelihood and financial inclusion aspects of rural and semi-urban households. The household survey exercise has been completed in its entirety in 28 states and UTs of Jammu & Kashmir and Ladakh.

4.7.2 Supporting research studies, seminars, and conferences

Of the 26 in-house and collaborative research studies ongoing currently under the aegis of NABARD, 8 were sanctioned in FY2024. Also, in the year, 117 seminars and conferences were sanctioned on topics such as strengthening of value chain of millets, sustainable natural resource management under global climate change, innovations in agriculture for sustainable food systems and farmers’ income, and enhancing market linkages.

4.7.3 Student engagement schemes

NABARD continues to engage with the student community through the NABARD Student Internship Scheme and the NABARD Citation for Outstanding Ph.D. Thesis.

4.7.4 Publications

• In FY2024, NABARD published policy briefs for the first time, highlighting major findings and recommendations that emerged from its research work. So far, six issues of the NAB Policy Brief have been published on diverse themes.
• Periodic research bulletins like EcoThink (monthly) and EcoWatch (fortnightly) continue to provide inputs for meetings held by NABARD’s Asset Liability Committee, Investment Committee, and other user departments.
• This year, a new series titled Eco Focus presents thematic notes on contemporary issues of significance such as price rise and volatility of essentials like milk, tomatoes, onions, potatoes, etc.
• As on 31 March 2024, 13 authoritative papers by eminent scholars and domain experts have been published under NABARD’s Research and Policy series on relevant issues making policy prescriptions and suggestions for future research.
• NABARD documented the ground level impact of its interventions, initiatives, and innovations within the triple bottomline approach of People, Planet and Profit, in its first Impact Report for FY2023. The report meets the Global Reporting Initiatives standards of reporting, linking impact assessment to the United Nations Sustainable Development Goals.

4.8 INCLUSIVE DEVELOPMENT THROUGH SUSTAINABLE LIVELIHOODS

Institution building, skilling, entrepreneurship, farm and off-farm research, and knowledge dissemination thereof are critical for promoting sustainable and inclusive development in rural India.

Community institutions such as SHGs, JLGs, FPOs, and OFPOs are key contributors to inclusive rural prosperity fostering financial inclusion, establishing market links, building capacity, promoting sustainable agriculture, developing rural infrastructure, and empowering women. Building these institutions is essential to creating sustainable livelihoods in rural India, as they play an important role in supporting entrepreneurship, consolidating traditional industries, and concentrating on non-agricultural activities. NABARD, in the coming years, will support FPOs, OFPOs, as well as rural and agrifood start-ups to grow and widen their market reach, especially through technology and e-commerce development.

NOTES

• https://lakhpatididi.gov.in/.
• https://www.nabskillnabard.org/off-farm-sector.html/1000#:~:text=Stall%2DIn%2DMall&text=The%20stalls%20are%20to%20be,by%20NABARD%20   under%20various%20interventions.
• https://www.mystore.in/en/collection/nabard?section=product.