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b. Credit planning
Potential farm activity credit mapping is done annually for each of the sub provinces (Districts)
which aggregate into a credit plan for each province (State). Each district (sub-province) is further
divided into a few development blocks for the purpose of implementation of various
developmental schemes. Dedicated committees are set up at the levels of blocks, districts and
provinces. These committees comprise government ofcials, bankers & peoples' representatives
and meet at regular intervals to monitor progress of various government schemes and
achievement of rural credit targets. If required, the committees also undertake mid-term course
correction initiatives,
v. Delivery Infrastructure
No product or service can be delivered effectively and efciently without having a robust and
strong delivery infrastructure. With objective of purveying credit to millions of farmers and agri-
entrepreneurs scattered far and wide, nancial, technological, institutional and social
infrastructure need to be strengthened. South Asia being a region of small holder farmers'
majority, any rural credit innovation approach falls in the following areas.
a. Institutional infrastructure
I) Producers organizations
Innovative institutional infrastructure at farmers' level is required for addressing business
reality of small farmers. To this extent India has taken steps to create farmers collectives in the
name of ProducersOrganisations (POs). POs are registeredunder the local laws and are likely
to enhance farmers' bargaining power in inputs and produce markets. As a registered legal
entity under the provisions of the law, they can enter into legally valid agreements with
nancial institutions and banks. Themove helps POs in sourcing higher amount of credit and
for multiple purposes. They can now collectively join the value chain. The innovation here
has been the amendment of the Companies Act which now allows farmers' association (POs)
a legal valid entity for execution of agreements. This ensures applicability of contract act and
raises lenders condence.
ii) Crop insurance
In order to managing risks at the farm and household level (especially at a time of climate
change), India has recently introduced a new state sponsored Crop Insurance Policy. Using
remote sensing and smart phone technology, the new crop insurance policy allowsmanaging
variety of risks at localised level and even for a smallholder farm. The scheme is compulsory
for farmers availing bank loan and a nominal amount towards premium is deducted at
branch level. The coming years will be crucial to assess its success. Farmers' response to the
scheme is awaited.
b. Technological infrastructure
The modern communication technology can play an important role in overcoming distance and
information bottlenecks. To this effect India has taken big strides, more so after the ban of high
denomination currency notes inNovember 2016.
